Looking good
For many women, walking out the door without their favorite beauty products on their face is akin to leaving the house naked. But at the same time, the price of some of those products can really sting, especially in the midst of a down economy. So it should come as no surprise that private labels have done relatively well in the personal care market over the last several years.
However, there is always room for growth, and as recently reported in the Private Label => Store Brands 2013 State of the Industry Research Study, health and beauty care is one of the top areas of interest for retailers that want to expand their store brand programs. And the good news for retailers is that they will find some particularly bright spots on the market for private label beauty care products: with one being nail care items.
"Nail polish offers women an affordable way to experiment with new colors and stay current with fashion trends, often for less than $10 a bottle," says Shannon Romanowski, beauty and personal care analyst at Mintel, a global market research company.
Sales of nail care products in the United States increased by 72 percent from 2007 to 2012, Mintel notes, with sales hitting an estimated $2.5 billion by the end of 2012. By 2017, sales are expected to reach more than $4 billion.
Think beyond polish
While Mintels data indicate that the most prevalent buyers of nail care products are women with children, younger women are also huge buyers, with those aged 18-24 being the biggest users of colored polish. However, retailers looking to drive sales of store brand products should keep in mind that they might have difficulty competing against brand names when it comes to nail polish or artificial nails. According to data from Chicago-based IRI, during the 52 weeks ending March 24, private label sales for both of those segments were down.
But as anyone who has ever painted her nails knows, most nail care buyers dont stop with a bottle of polish. They also buy related products such as nail polish remover, topcoats, primers and strengtheners – and thats where store brands could up their game in the market. Sales of private label nail polish remover jumped 10.4 percent, while private label nail treatments increased by a very healthy 187.2 percent.
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Tom Hill, senior vice president and general sales manager at Chino, Calif.-based Diamond Wipes International, says while the acetone nail polish removers have been selling well, its the non-acetone formulations that have been "hero" items for his company.
"We think the market is hungry and eager to welcome nail care innovation that is more conscientious towards consumers health [and] safety, as well as [a] pleasant experience during the use of these products," he says.
Offer a suds-free alternative
Another on-trend beauty care segment that retailers might want to pursue for store brands is dry shampoo. Gone are the days when dry shampoo was considered an inferior product better suited to travel than everyday use. In fact, some experts suggest that dry shampoo might be even better than liquid.
"The benefits of daily shampooing continue to be questioned, as many have argued that too-frequent washing can actually strip the hair of its natural oils, creating an opportunity for these waterless shampoos to shine," says Amy Ziegler, a beauty and personal care analyst for Mintel.
Dry shampoo – which comes in powder, foam and spray forms – made up just 1 percent of all shampoos introduced globally in 2008, Mintel notes, but by the end of 2012, that number had jumped to 3 percent and is expected to grow. And Vogue Daily reported last year that dry shampoo was the most requested item from the magazines beauty closet.
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So how could retailers effectively add this hot beauty item to their store brand hair care lines? Since it is a product that many have never tried, emphasize the extra benefits it can provide that arent normally considered when purchasing shampoo, including the speed of use and ability to provide shine. Infuse it with natural or botanical ingredients. The claim that a product is natural is a top one when it comes to selling hair care products, but according to Mintel, its not one that consumers necessarily are willing to pay more for, making it a promising promotional message for store brands. Perhaps most important, though, market dry versions much the way that regular shampoo is marketed.
"Consumers shop the hair care aisle with their individual needs in mind, preferring to buy products that directly speak to their hair type, condition and style. Dry shampoo is no different and is selected based on the same criteria," Ziegler says.
In addition to formulas that work for a variety of hair types, scent is also important, according to Mintel, with more than half of American women considering the fragrance of their hair products to be an important attribute.
Dont forget men
Women are only half of the market, though – while mens personal care products might once have been more of an afterthought, they now are one of the most promising segments of the market.
"We recommend that our retail partners breathe new life into their mens grooming portfolio," Hill says. "Our research partners forecast healthy growth in this super-category in the coming years."
The key to success here is to develop products that specifically speak to men, something that Hill says he has seen some brands struggle with.
"Having just the right mix of brand personality and attitude that resonates with men is critical," he says.
Men might not have the same passion for shopping that many women do, but they care about packaging. And considering the number of super-stylish products inundating the market over the last several years – everything from skincare items packaged in recycled cigar boxes to concealers disguised as lip balm – they have lots of choices available to them. So retailers shouldnt be afraid to create products that stand out but, at the same time, are also practical and portable.
"Men are less concerned with natural, opting for performance, efficiency and ease of use," says J. Castellano, director of development at Valencia, Calif.-based IBG Labs/Cosmetic House International. "Well-designed branded packaging that speaks to this sector is key in the premium market."
But while the need for innovation is definitely important, retailers need to make sure that they dont take the creativity so far that the resulting product is priced higher than what the stores customer base is willing to pay.
"There is a tendency to upsell by promoting a higher-end product assuming that it will be perceived as exclusive, when in fact value is the real driver," Castellano warns.
For retailers interested in boosting sales of store brand mens grooming products, though, the question of where to sell might be just as important as what to sell. According to new research from Mintel, the "ultimate shopping channel" when it comes to selling certain mens grooming products might not be the store shelf at all, but online instead. While consumers of both genders still mostly are buying personal care items in-store, around 60 percent of men in the web-savvy 18-34 age bracket think that Internet shopping is the easier option given the time it saves.
"Additionally, the Internet allows for a level of anonymity when shopping for products that may be a bit embarrassing to shop for in person, like anti-aging or hair-thinning products, particularly for men," Romanowski says.
