Global Market Development Center research suggests that supermarkets are well positioned to capture this lucrative consumer.
By Craig Levitt
In their infancy, organic and natural products, particularly those in nonfoods categories, were met with resistance from mainstream consumers. The negative feedback and overall lack of consumer interest led traditional retailers to avoid the category.
Fast forward to 2010 and retailers—especially grocery retailers—that neglect organic/natural health, beauty and wellness products do so at their own peril. Many of these products not only have a devout following, but plenty of consumers who have ignored the category in the past are dipping their toes into the organic/natural waters as well.
As such, in an effort to help its members understand consumer buying behaviors, the Colorado Springs, Colo.-based Global Market Development Center (GMDC) is taking a leadership role in understanding consumer concerns, priorities and shopping habits as well as identifying new retail opportunities.
As part of that commitment, last year GMDC partnered with the Hartman Group and launched a multi-year research project that incorporates qualitative and quantitative techniques, attempting to uncover actionable items that will offer members ideas on how to generate sales with this growing consumer base. In-person research was done in three markets, Seattle, Charlotte, N.C. and Edison, N.J. Surveyors shopped with consumers and conducted in-home interviews. An online 30-minute survey was also distributed to shoppers in five regions.
The results were tallied and in December the GMDC presented its Consumer Shopping Habits for Wellness and Environmentally Conscious Lifestyles report, illustrating the findings from phase I of the research to GMDC members and select media. Based on the research, GMDC concludes that supermarkets devoting proper time and energy to the category have the ability to fare nicely in many of the burgeoning nonfoods health and wellness categories.
“Some of the best opportunity is in the grocery channel,” says Chris DePetris, director of wellness programs for GMDC. “So far grocery has had good growth, but most importantly for grocery the foundation of health and wellness products is in food—that’s where it starts. That’s what gives grocery such a unique opportunity, the food they carry and their ability to draw in that consumer.”
Findings suggest there are three key segments of health and wellness consumers: core; mid-level and periphery. For core consumers (13% of the population) health and wellness products are a major life focus and they serve as trendsetters for other consumers. Periphery consumers (25%) are at entry-level when it comes to health and wellness. They have aspirations to be more involved but typically are not at the stage where their behaviors follow their aspirations. These consumers are mostly reactive rather that proactive when it comes to matters of health and wellness. Mid-level consumers (62%) are moderately involved, tend to follow the core trend but have periphery behavior as well. They tend to purchase large amounts of health and wellness and traditional products, are concerned about price and convenience but are also driven by knowledge and experience. As the largest segment meeting their needs are critical.
To complicate matters, DePetris says mid-level and periphery consumers often look to retailers to edit product choices.
“Consumers expect that if retailers can get product choices down to the ones that are most important to them, that retailer is authentic and an expert,” he says. “If you are authentic and an expert the consumer will come back to you.”
Retail findings reveal that channel use varies by health/wellness orientation. Periphery consumers tend to shop mainstream (drug, mass, club and grocery) channels for the majority of their purchases. Mid-level consumers will visit mainstream channels for most of their shopping but also make fairly frequent stops at specialty drug and grocery channels. Core consumers tend to use specialty channels as often as possible.
Retailers should also not discount the value of store environment and aesthetics. For health/wellness shoppers much of their purchasing decisions are based on lifestyle quality. Retailers that want to succeed in the category need to create a healthy atmosphere in the store. DePetris says that oftentimes even the simplest things such as smiling helpful employees and clean and tidy shelves and floors can position a store better in the health/wellness shoppers’ eyes.