Self-care products are poised for robust growth at physical retail stores, according to a new study by the Global Market Development Center (GMDC)/Retail Tomorrow and management consulting firm A.T. Kearney.
The 2019 Selfcare Benchmarking Report showed physical stores capturing a dominant share of the self-care market—a category with relatively low online penetration. Conventional categories, including bath and shower, adult incontinence, ear care, family planning, vitamins and supplements and skincare, all showed brick-and-mortar sales growth double the average rate.
Sales of health, beauty, wellness and personal care grew by 1.5% between 2017 and 2018 behind premiumization, while volume remained flat, the study said. Of the 26 categories analyzed, 19 displayed year-over-year sales increases at brick-and-mortar retailers. Further, the study found that 75% of Americans are more likely to purchase medicine and healthcare products in-store and 90% of U.S. Gen Z shoppers prefer to buy cosmetics in-store.
Further growth opportunities exist in nonconventional categories, which are growing faster than traditional health and beauty categories, the study added. For example, the athleisure product category grew by 8% between 2017 and 2018, while pet pampering products are forecast for a 5% market growth from 2018 to 2023.
“Self-care consumers are proactive, place an emphasis on prevention and are open to experimenting with new brands, categories and services,” said Jason Maehara, manager of A.T. Kearney. “The self-care movement’s impact on retail is undeniable, with 79% of consumers showing a self-care mindset and mission when they visit brick-and-mortar retail. The average American spends $199 on nonessential items to treat themselves every month, equivalent to 22% of the consumer’s disposable income."
The report recommends that brick-and-mortar retailers rethink how they position themselves in response to customers’ evolving preferences. Food, drug and mass retailers are inherently better-positioned to cater to customers’ broadened self-care needs due in large part to high trip frequency that can be leveraged to introduce customers to self-care offerings.
Based on the findings, the report suggests that physical retailers leverage loyalty programs, tailor a more personalized approach to product offerings, and use brick-and-mortar stores to pilot new products.
In a statement, GMDC President and CEO Patrick Spear said he considers the organization's first study with A.T. Kearney a major breakthrough. “We take pride in our leadership within the burgeoning self-care space, while we help steer retail’s transformation to embrace the consumerization of healthcare,” Spear said. “We help our members tap into some of the industry’s first consumer insights regarding self-care, in order to focus on increasing their share of existing categories and capture the explosive growth of emerging, innovative categories."
GMDC, a trade organization, is based Colorado Springs, Colo.