Health and Beauty Product Sales Soar
As the era of donning face masks and relying heavily on hand sanitizer recedes, individuals are returning to their usual habits of utilizing self-care items and non-prescription drugs as required. As the need for self-care products and medicines surges, retailers are exploring novel strategies to reorganize their store displays in response to these demands.
According to the 2023 Markets Insight Report by Statista, the beauty and personal care industry is projected to achieve a revenue of $92.79 billion by the year 2023. This market is anticipated to experience a steady growth of 2.52% annually from 2023 to 2028. Interestingly, the report highlights that personal care dominates this market segment, with a significant value of $42.18 billion in 2023.
"This year, we have observed a notable increase in the health and beauty category. Rotten Robbie, a company running 37 stores in northern California, has witnessed a significant rise in both dollar and unit sales. The dollar sales have escalated by 16.92%, while the unit sales have surged by 7.75%," mentioned Jennifer Whitman, the category manager at Rotten Robbie. She further added, "Except for a few discontinuities, the majority of our center of store categories have experienced a decline in unit sales this year. However, it is worth mentioning that health and beauty products have been flourishing across all our locations."
The Army and Air Force Exchange, which manages over 580 Express stores, has also observed a surge in sales of health and beauty items.
Kye Corn, the divisional merchandising manager at the Army and Air Force Exchange Service, further noted that products focused on personal well-being have been a major contributor to sales growth in their stores.
"We have observed a positive sales trend since the beginning of this year. The Exchange anticipates a significant growth of health and beauty product sales, reaching high single digits for the entire year," Corn remarked. "Self-care items, products that boost immunity, and treatments for respiratory health are the leading categories showing substantial gains so far in 2023."
Retailers have observed that smaller sample sizes are selling rapidly and quickly disappearing from the shelves.
According to Whitman, it appears that customers are now postponing their purchases until they absolutely require a particular item. They are not making the most of discounts offered on bigger quantities with higher prices to ensure they have enough supplies. Instead, there is a noticeable increase in the purchase of small trial-sized products. On the other hand, the sales of regular-sized items such as lotions, medications, and deodorants have witnessed a decline.
Whitman also pointed out that she expects this pattern to persist in part because of the volatile economy and consumers' hesitancy to splash out a large sum of money.
The difficulties in the supply chain that emerged during the peak of the COVID-19 crisis have mostly been resolved. Consequently, the primary obstacle that retailers face today is ensuring they possess the appropriate merchandise and adequate shelf capacity.
"The true difficulty lies in discovering room for growth," stated Whitman. "Given the unpredictable economy, it is crucial to thoroughly assess your range of products in the main section of the store and refine it accordingly. It remains uncertain if there will be additional space allocated for health and beauty care. As for us, we will likely make that decision around mid-2024."
Both the military retail organization, Army and Air Force Exchange, as well as the popular gasoline station chain, Rotten Robbie, have decided to reevaluate their health and beauty department in order to adapt to shifting consumer needs.
Corn stated that the Exchange provides a wide range of items in various health and beauty sectors. Not only do we offer popular national brands, but we also have Exchange Select, a private-label brand that usually helps customers save money. Corn emphasized that the Exchange constantly updates its product selection with new items, all while still providing well-known brands that sell exceptionally well.
Rotten Robbie provides a wide range of health and beauty items in smaller sizes for individuals to try out. These include products like stomach-related items, hand sanitizers, and mouthwash. Additionally, the convenience store offers a variety of cough drops, which are highly popular among customers, as per Whitman.
"We make adjustments to our product range annually, taking into account sales and current trends," she explained. "During 2023, we didn't make many changes, but for our upcoming 2024 planogram in the spring, I'm contemplating removing or significantly reducing the number of vitamins and supplements we offer. Unfortunately, they haven't been selling well. On the other hand, I'm planning to increase the selection of cough drops and feminine hygiene products."
However, it is important for retailers to remain vigilant about current patterns and ensure that they adjust their inventory accordingly in order to witness an increase in sales for health and beauty products.
"According to Whitman, I expect that the increase in sales of health and beauty products will persist throughout the year until the economy becomes steady again, enabling retailers to resume stocking bigger quantities. In my opinion, the growth in this category could reach up to 10% compared to the previous year."
