- Drugstores account for more than a third of the $110 billion HBC market
- Hy-Vee actually gained market share in this category during the pandemic
- Online retailer Thrive Market recently launched beauty brand fae, and the company is already seeing results.
Beauty care has long been one of the most challenging categories for the supermarket segment, given intense competition from drugs and masses as well as other channels including beauty specialists such as Ulta and Sephora.
Beauty and personal care sales surged at many food retailers as consumers consolidated shopping trips during the peak of the pandemic, but traditional spending patterns have since returned.
According to a report by research and consulting firm Klein’s Beauty Retail Ring USA, beauty and personal care sales will decline 6% in food stores in 2021, well below the 10% growth of the overall U.S. beauty market. increase. The report forecasts a further 1% decline in the grocery channel in 2022.
“By competing with so many strong retailers, including online sellers, the ability to step away from traditional formats and offer shoppers something new will be key to the success of grocers moving forward. prize”
“Mass retailers like Target and beauty specialty stores like Ulta and Sephora have done a great job accommodating emerging beauty brands,” said Kreutzer. “This has allowed these retailers to evolve with the changing competitive landscape and consumer appetite for beauty novelty.”
Drugstores account for more than a third of the $110 billion HBC market, according to NielsenIQ data. On that channel, HBC’s sales increased by 12.5% in the 52 weeks ending Aug. 27 compared to the previous 52 weeks, an overall increase of about $33.35 billion.
Drugstores outperformed the market overall in the cosmetics and nail grooming categories, as well as the hair care category, despite flat sales in the hand and body lotion categories last year.
Some supermarket operators have put considerable effort into beauty and personal care, but are looking to capitalize on the traffic and margins that categories can add if properly commercialized.
Hy-Vee, for example, has created a prominent beauty department within its stores and has become known as a destination for local shoppers.
said Shelby Stritzke, vice president of fashion, beauty and innovation at Iowa-based retailer West Des Moines. “Now we are focusing on a broader assortment that brings newness to the shelf and drives value.”
After initiating a major partnership with luxury bath and beauty brand Basin in 2018 and launching in-store boutiques and displays, Hy-Vee continues to evolve its approach to these categories.
“We have expanded our footprint and product offerings to create a one-stop shopping experience,” said Stritzke.
Hy-Vee’s expanded product selection includes cosmetic luxury products from brands such as bareMinerals, W3LL People and Pacifica, along with a rebranded beauty division called Bellissima. The retailer has also added solution-based products to expand its professional hair care and facial sets, Stritzke said.
Stritzke said Hy-Vee plans to expand its beauty care strategy to larger stores focused on solutions and value for customers.
“In 2023, our focus is on following trends and expanding our cosmetics, hair care and facial categories,” she said, adding that retailers will be offering products in clean beauty, ethnic hair care and exclusive private label products. We added that we plan to add more.
Thrive Market Boosts Online Competition
Traditional supermarket retailers face pressure from online beauty care sellers as well as competing with mass merchandisers and beauty specialists.
For example, Thrive Market recently launched fae (short for “for all, everywhere”), a skin and body care brand that represents Thrive’s first foray into beauty and skin care. The 26-item product line features clean ingredient labels and sharp pricing, said Christine McNerney, her senior director of home, health and beauty merchandising at the online grocery company. . price.
“fae is a trusted destination for healthy living, an affordable, affordable line that is accessible to everyone, everywhere, and clean beauty that is accessible to our members.” she said.
Its expansion into beauty care only began in August, but McNerney says the company has already started to see some results, with a nourishing body wash and nourishing body lotion scented with coconut vanilla being the first to arrive. Two successful examples are cited.
“Since this is in fae’s ‘For Everyday’ vertical, members seem to gravitate toward the everyday basics of their routine,” she said.
Thrive markets its fae line to its 1.2 million members via an omnichannel approach that includes email, SMS, in-app, social media, influencer marketing, and other communication channels.
The fae brand focuses on Thrive Market’s natural, organic and healthy product offerings, said McNerney.
“Our brand quality and ingredient requirements are in line with Thrive Market’s overall standards and, in some cases, even more stringent for our own fae brand,” she said. . “We aim to provide our members with a combination of affordable, clean, high quality core essentials and innovative items not available anywhere else.”
McNerney said the company plans to expand its line of Beauty Collagen Lattes this fall, a fast-dissolving collagen supplement that helps support healthy skin, hair and nails. Flavors at launch include Spice Chai, Matcha, and Golden Milk.