Healthy sales for cough and cold
If consumers suffering from a severe cold or flu want one thing, it’s relief — and they it want fast. So a trip to a store’s over-the-counter (OTC) cough and cold section is likely to result in a purchase.
The good news for retailers is that more people are choosing store brand products when they make that purchase. According to “Cold, Flu, and Allergy — US,” an April 2013 report from global market research firm Mintel, private label OTC sales are giving brand names a run for their money, thanks to both name-brand recalls and a desire on the part of consumers to save money.
Go natural
Consumers aren’t just looking for cough and cold products that are effective — they also want products that are safe. One way retailers could respond to safety concerns is by offering not just traditional store brand OTC treatments, but also homeopathic remedies.
Do consider extending store brand cough and cold products into the growing homeopathic space.
The United States has lagged somewhat behind the rest of the world when it comes to the popularity of homeopathic medicine, but sales numbers prove that is changing. According to David Marder, divisional sales manager at Boca Raton, Fla.-based Homeolab U.S.A., homeopathy has grown from a $200 million category to a $1.5 billion category over the last decade.
“Sales are doing really well for homeopathic and herbal,” says Emily Krol, health and wellness analyst for Mintel. “Reported consumer usage is still pretty low, and I think overall awareness and trust in these brands is low, but it is growing. Any brand should keep their eye on the segment.”
For retailers wanting to extend store brand cough and cold offerings into natural versions, they should concentrate on children first. While adults in need of cold relief aren’t necessarily as concerned about what they are putting in their own bodies, “no one wants to give their young child anything that is potentially harmful or has contraindications,” Marder says, adding that Homeolab’s line of Kids Relief brand products are some of the company’s bestsellers. “With homeopathy, mom is able to give her child something that is safe and effective, without additives such as sugar, dyes or gluten.”
Think outside the box
When it comes to category innovations, Mintel’s data show that combination packs targeting both daytime and nighttime symptoms are doing well, as are products that treat allergy symptoms, due to progressively worse allergy seasons.
Nasacort Allergy 24HR, manufactured by Bridgewater, N.J.-based Sanofi U.S. and formerly available by prescription only, just became the first nasal steroid spray available over the counter. While the Mintel report shows a decline in the sales of nasal remedies and strips, that development could be a game changer.
“We’re not sure how that will shape the market yet, but it could pave the way for more prescription-only nasal steroids to go OTC, and it could increase sales in the nasal remedy category,” Krol says.
Fort Washington, Pa.-based McNeil Consumer Healthcare’s Zyrtec Dissolve Tabs, which melt in your mouth and don’t require water, are another new allergy product on the market, seemingly aimed at appealing to consumers’ desire for convenience.
And GoGargle! — an effervescent salt gargle for soothing sore throats, produced by Scottsdale, Ariz.-based O’Connor Companies — is another example of a new cough treatment that is different from what has traditionally been on the market.
Don't be afraid to innovate ahead of the national brands.
Marder points out that this is a great time for store brands, since they can create innovative products of their own without having to wait for a name brand version to appear first.
Whatever type of new cough or cold products retailers might be considering, the packaging needs to be clear about all consumer benefits.
“One thing people really look for is a product that treats their specific ailment,” Krol says. “When people are shopping the aisle, they are thinking about what they have and looking for callouts to those symptoms,” she says, adding that messaging about how quickly a product will work is also going to grab shoppers’ attention.
Build trust
Despite strong private label growth, “CPG Qualitative Research: Exploring Private Label vs. Branded OTC,” a study released in 2013 by Livonia, Mich.-based Market Strategies International, notes that the OTC drug category can still be a tricky one for store brands. Many consumers, when particularly desperate for relief or shopping in unfamiliar locations, are more likely to choose the product they already have experience with — oftentimes, the national brand product.
Do market the store brand cough or cold product as the trusted local brand.
“When there is an urgent need, consumers are willing to spend more for national brands,” notes Barbara Deradorian, senior vice president in the consumer and retail division at Market Strategies International, in a blog post about the study’s findings.
But retailers could engage in strategies that are effective in getting shoppers to choose the private label OTC product over the name-brand version. One strategy calls for stressing the store brand version as the local and trusted choice.
“Despite being a national chain, a consumer may view their CVS around the corner as a ‘local’ store and might, therefore, be more open and trusting of CVS brands,” Deradorian notes.
But the report notes that probably the best way for retailers to gain store brand loyalty is by making sure that all store brand products, the entire umbrella of them, offer consumers a good experience.
According to Marder, one way of promoting those good experiences is via the Internet.
“Consumer-to-consumer word of mouth is one of the strongest recommendations that a product can get,” he says. “The best forum for this is online through social media, websites and blogs. Getting people to interact with each other about your product is a powerful marketing tool.”