Retailers that are not prepared for the flu season are sure to suffer sickly cough/cold OTC sales.
By Craig Levitt
Hot summer days are turning to brisk autumn nights. Kids are going back to school and football is on TV. That means the cold and flu season is right around the corner.
There is almost no avoiding it; consumers are going to get sick. When they do, most head straight for retailers’ OTC aisle looking for relief. Industry observers say that for retailers, one of the most challenging aspects of managing the cough/cold category is understanding its seasonality.
Sales during the October-to-March season are consistently strong. However, the increased volume during peak cold and flu periods can be dramatic and can generate high out-of-stocks if retailers are not prepared. “When peak season hits, retailers merchandising attention needs to increase proportionally to ensure the shelf is neat and adequately stocked,” says Bruce Lifka, vice president of Miami-based Kramer Consumer Healthcare, a division of Kramer Laboratories. “Secondary displays may be used to flex out store level stock.”
Understanding the shopper can also be tricky. Most observers say there are basically two types of consumers shopping the cough/cold aisle. The first is the one who is “sick now,” and has an immediate need. Observers say this is the perfect shopper for supermarkets as they are usually in the store two times a week and supermarkets provide the convenience and immediacy they are looking for.
“Providing the right assortment and speaking to these consumers on the shelf is very important,” says Tony Sommer, senior director of sales, customer marketing and operations for Marietta, Ga.-based Meda Consumer Healthcare.
The other consumer type is what Sommer calls a planner. “I don’t want to call them chronically ill, but they get more colds than normal and they plan for that,” he says. “They know they are going to get sick and they stock up. To win with them retailers need the right display and ad activity and be visible for them with the right assortment so.”
No matter which group a consumer falls under, one thing is certain—while consumers will look for relief from tried and true remedies, a sick consumer is always on the lookout for new products that can help them feel better.
“Innovation drives growth in all categories and cough/cold is no different,” says Lifka. “Recently the innovation has been coming less and less from the larger brands that often add knock-off SKUs to build shelf presence. The smaller brands have to create the unique approaches that enable them to compete against the well-funded players.”
As consumer health issues have evolved, so to has Kramer Consumer Healthcare’s Safetussin cough syrup. Safetussin has been reformulated without decongestants, focusing on daytime and nighttime treatment of coughs.
Since coughs are generally most problematic at night, Kramer Labs has also developed Safetussin PM. Safetussin PM has the same benefits of as the daytime formula, while providing up to eight hours of cough relief. Kramer is supporting Safetussin with national TV, print, online and direct-to-consumer marketing campaigns.
Listening to consumers
Meda Consumer Healthcare is taking what was old and making it new again. This past March, the company acquired the Contact brand and is focused on innovation. Much of that innovation will come as a result of the company’s ongoing consumer research.
“We are actively engaged in consumer research and diving deep into the business,” says Sommer. “We commissioned an attitude and usage study immediately upon acquiring Contact. Our brand manager and brand research teams and our market research group are tearing them apart to find out the deep insights that make sense and then we will bring them to the trade.”
One insight that Meda Consumer Healthcare’s research uncovered is that while price plays an underlying factor, most consumers have a consideration set of about three or four brands that they are loyal too. For these “loyalists,” Sommer says while they will shift back and forth, the shifting is usually driven by symptom rather than price.
Trust is also a big issue for consumers, especially when health is concerned. Amid some of the recent Food and Drug Administration ingredient side affect warnings and product recalls, consumers’ interest in safe and effective self-medication options continues to rise. As such they are taking a closer look at homeopathic remedies.
That sits perfectly well with Dave Lesiak, director of sales for Hyland’s, a 108 year-old company that develops homeopathic medicines. “Whether they be prescription-to-OTC conversions or entirely new OTC launches, new, innovative products are an extremely important category growth component,” says Lesiak.
To meet this burgeoning need, Los Angeles-based Hyland’s now offers four children and three adult positioned homeopathic cough/cold/allergy OTC products. Adult products include Hyland’s Defend Cold & Cough, Defend Cold & Cough Night and Defend Sinus. Children’s products, safe for children two years and up, are Hyland’s Cold ‘n Cough 4 Kids, Hyland’s Nighttime Cold ‘n Cough 4 Kids, Cough Syrup with Honey 4 Kids and Complete Allergy Relief 4 Kids.
Another natural product line gaining favor with consumers is the nasal wash category. As more and more consumers become comfortable with these products, manufacturers are expanding their offering. NeilMed Pharmaceuticals introduced a nasal gel saline spray, which Dr. Ketan Mehta, CEO and founder of Santa Rosa, Calif.-based NeilMed, says helps keep noses moist by retaining water molecules “better than most other compounds.”
He says NeilMed is also getting “techy,” with its electronic Sinugator Cordless Pulsating Nasal Wash. “We continue to broaden our product line,” says Dr. Mehta. “We are on top of technology, ahead of almost everybody in the game. But we only make changes to a product if absolutely necessary. We evaluate, try it out and if it is helpful we implement it, if not we don’t.”