Here’s to good health… and beauty

Grocers are giving their HBC aisles a makeover and sharpening their product mix to win in this ultra- competitive category.

By Craig Levitt

In a category as large and diverse as HBC, it is no wonder that many grocery retailers develop a headache when trying to figure out how to merchandise this area, often viewing these aisles as a necessary evil instead of ones that can drive sales. Observers say that if they don’t adjust their thinking soon, it will be increasingly difficult for them to compete with mass retailers, drug stores, dollar stores and even beauty supply and specialty stores for consumers’ HBC dollar.

There are some grocers putting forth a greater effort to compete with the other classes of trade in the HBC area, experts say.

Keith Wypyszynski, vice president, business development/CMO for the Colorado Springs, Colo.-based Global Market Development Center (GMDC), has noticed improved signage and lower profile shelving that almost creates a store-within-a-store feel.

“This not only draws in consumers, during their weekly shopping trips, but more importantly creates destinations for consumer HBC needs,” says Wypyszynski. “By doing this they are also letting consumers know that they have the selection, price and variety—which consumers may not give food retailers credit for.”

It is becoming increasingly more important to grab consumers’ attention quickly because they are becoming more savvy when shopping the category. Observers say more and more shoppers today know which retailers offer a particular item at the best price and they are making special trips for those purchases.

“The mentality of today’s shopper is to go from one store to another to purchase the most inexpensive items,” says Puneet Nanda, president and CEO of Dr. Fresh, based in Buena Park, Calif. “By not having price-comparable HBC products, grocers are allowing people to go to another store to make those purchases. You don’t ever want to let a person leave your store; that is the worst thing you can do. Look at Walmart. They did exactly the opposite. They saw that shoppers were coming in for razors and toothbrushes, so what did they do? They opened supercenters.”

Observers say that retailers doing well have a strong handle on consumer preferences, which include products that continue to help consumers lead a healthy lifestyle and look and feel their best. Some of the HBC segments that grocers should pay particular attention to include specialty supplements, natural skin care, hair care and children’s products.

Among Dr. Fresh’s new offerings are battery-operated FireFly toothbrushes, designed to help children brush properly. Nanda says the toothbrush lights up during brushing; turning off to indicate the child has brushed long enough. He adds that most grocers have an opportunity to expand their toothbrush offerings with more inexpensive products.

“[Grocers] are doing a good job of placing the toothpaste at the right price, but their toothbrush prices are extremely expensive,” says Nanda. “There aren’t many cheaper options and retailers seem to be focused on only one or two brands.”

Missed opportunities
He says Dr. Fresh’s FireFly products sell 15 to 20 pieces a week in Target and that grocery is “missing out big time” by carrying similar items at higher price-points. Dr. Fresh also recently launched Orazyme dry mouth relief formula and re-launched Binaca breath drops.

In fact, observers say it is HBC products like the Binaca breath drops that have now become in vogue and provide a growth opportunity for retailers. “What have become popular are legacy brands,” says Roger DeFrang, vice president of sales for East Hampton, Conn.-based Dickinson Brands. “Shoppers want good old-fashioned brands that mom and grandma used to use.”

DeFrang says that sales of Dickinson’s witch hazel are up dramatically, even in the struggling economy. He credits smart­er consumers that better understand product labeling and the importance of ingredients. He says smarter shoppers are saying to themselves, “I’ve been buying this toner and paying $15 for a 7-ounce bottle and the No. 2 ingredient is witch hazel. Why would I not want to pay $3.49 for a 16-ounce bottle of witch hazel?”

He says it also helps that consumers are trending toward all-natural products with simple ingredients, which is increasing their confidence in legacy brands.

“Our legacy witch hazel brand gets a prime location right in the middle of the set in Walgreens,” DeFrang says. “There are brand new acne products right above and below us, yet Walgreens still feels it is important to feature this legacy brand right in the middle.”

Many consumers are not quite sure of the uses for witch hazel, so Dickinson is reacquainting consumers with the benefits of the product. In doing so they are introducing a 4-ounce pain relief spray, predominantly geared towards children, that is designed to numb pain immediately then allow the witch hazel to further ease pain and reduce swelling.

Of course the ultimate children’s product—and one in which observers say grocers seem to be losing a bit of traction in—is diapers. According to Chris Ferdock, vice president of marketing for Duluth, Ga.-based Associated Hygienic Products (AHP), manufacturers and marketers of disposable baby diapers and training pants, there are two significant trends emerging when it comes to diaper sales—buying on deal and a greater reliance on social media and technology.

“When you put these two trends together, you get a very powerful consumer who is using technology to find the best deals and take advantage of them,” says Ferdock. “This creates both challenges and opportunities for retailers. They need to embrace the technology and also figure out the best ways that they can differentiate and add value to consumers.”

Differentiation can come is many ways, including product offerings. AHP recently partnered with Fisher-Price on a new line of diapers which Ferdock says is the only diaper on the market to offer a size-right indicator to help parents correctly size the diaper.

He adds that the innovation goes beyond sizing as the Fisher-Price diapers come in a combination pack with both day and night diapers.

One-on-one with… Bruce Lifka

The vice president of Miami-based Kramer Consumer Healthcare, a division of Kramer Laboratories, Inc., helps sort out the cough/cold category.

Grocery Headquarters: What are the latest trends in the cough/cold category at supermarkets?
Bruce Lifka:
There continues to be a variety of formats in food stores, with HBC shopper strategy ranging from convenience to destination purchase. Cough/cold is a core HBC category regardless of the shopper strategy, as colds are a frequent household ailment and relatively easy to self diagnose and treat. Convenience oriented stores will have smaller sets with narrow selection, lower sales but good margins. Destination strategy stores frequently have pharmacies and will carry a full range of products to compete more directly with drug and mass merchandise outlets. Pricing may be more competitive in these outlets, but margins are typically much stronger than average food store profitability.

Tell us about your new product. What makes it better and different than the competition?
Safetussin cough syrup was developed over 20 years ago by a pharmacist who recognized the special needs of his customers with health afflictions. While the diabetic formula was the category innovator, population demographics and consumer health issues have evolved. High blood pressure (HBP) affects roughly 75 million adults in the U.S. and frequently precedes adult diabetes. Safetussin has been reformulated without decongestants, focusing on daytime and nighttime treatment of coughs. It provides adult strength cough relief free of alcohol, sugar, dyes, gluten, and decongestants that aren’t needed for safe, effective cough treatment. Safetussin is the brand that appeals to those afflicted with HBP, diabetes, or those who simply want safe cough relief, pure and simple. Safetussin is available in a DM and PM formula.

How are you promoting the product and helping to educate consumers?
For the upcoming cough/cold season we are planning national TV, print, online and direct to consumer marketing campaigns, the same approach we successfully used in regional test marketing this past cold season. Additionally we will launch a new website which will not only provide information about our products, but also information for those with HBP and diabetes, tips on healthy living and money saving offers. This mix of marketing efforts will help build our brand presence and educate consumers on all the features and benefits of Safetussin.

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