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Category snapshot: Health and Beauty

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PrintCanada’s convenience retailers sold almost $64.5 million worth of Health and Beauty products (HABA) last year (AC Nielsen). While this represents a lot of headache remedies and toothpaste, the category only represents 1.2% of dollar volume and is trending flat over the last 52 weeks. More, the category actually fell during the first quarter of last year, a fact that has Carman Allison, VP, Consumer Insights with Nielsen suggest HABA is not currently a growing segment, with no HABA categories making the list of gainers.

Despite these numbers Health and Beauty products are ‘must haves’ for every c-store. In my neighbourhood 7-Eleven merchandises a three-foot section of shelf for as much as 100 SKUs of a wide range of HABA goods. The clerk informs me that sales are typically slow with only one tube of toothpaste and a box of analgesics sold over his last four shifts.

Here, Mark Rusk, Strategic Project Manager at Calgary-based distributor and logistics firm Wallace and Carey, suggests consumers expect to find things such as bandages and razor blades at a convenience outlet. “These are just the types of thing people often need unexpectedly. This is where convenience stores shine by having the goods that help make life easier. Yes, sales are not huge in HABA, but customers will come in for a health or hair care product and may well pick up a beverage and a lottery ticket as well. HABA is a vital part of the mix in a well stocked and merchandised c-store,” he says.

Important is to consider seasonality as well as location of the store when stocking shelves. When cold and flu season hits, be ready with an assortment of patent remedies. The same is true for warmer months when sunscreen is a must for outdoor activities. For locations in high tourist areas and close to airports, its important to stock travel size products.

“Don’t assume the only size you can sell is the “single serve” packets,” says Steven J. Montgomery President b2b Solutions, a Chicago-based retail consultant. ”However, if you are going to carry the larger sizes price reasonably. Don’t expect to make the same percentage margin you with the single serve sizes. Those are ‘I need it now and don’t care what it cost’ type items. The cost is small compared to the issue the SKU is designed to address. Smaller take home sizes may be for now but also may be for later. Price them too high and you may get the single-serve sale, but not the larger one with more penny profit.”

Condoms stand out as a good source of profits for retailers, says Tom Schoettle, Vice-president Go Live, an e-commerce site that offers Condom Depot among its stable of specialty products. He suggests the embarrassment some customers feel regarding the purchase of a condom has meant big gains for Internet sales over the last few years. Still, he points out that these safe sex items can earn stores $3.00 to $4.00 per item but must be merchandised properly. “Given the ease with which condoms can be pocketed most retailers like to keep them in view or behind the counter to limit theft,” he says, noting that end cap, counter display and on the wall by the till are best places to show these products where leaders include Crown, Trojan, Durex and Lifestyle.

Schoettle suggests that retailers need to understand their customers’ needs and who they are to best serve them with the right mix of health and beauty goods. Mark Rusk agrees. “Don’t hide health and beauty away from customers. Let them know you have what they need when they need it,” he says concluding that when customers have a headache or a hairstyle malfunction a c-store should be thought of a place where solutions are found.

Four tips for better HABA sales:

  1. Make the selections visible. Even if people are not in the market for a health and beauty product at the time, they will know where to go when an issue pops up
  2. Price reasonably. When a customer needs a remedy for nausea or head cold, don’t have them leave the store feeling gouged by high prices.
  3. Check best-before dates. on slow turning HABA stock. Don’t let customers buy wear-dated analgesics
  4. Stock with seasonality in mind. Sunscreen doesn’t make much sense in the dead of winter, so keep shelves stocked with what customers will be looking for during that season.