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BEAUTY CARE

What’s next for the New General Market

BY Dan Mack
There are lots of bad reasons to start a company. But there is only one good reason. To change the world. The best brands operate with purpose, and it’s about much more than the bottom line.
That was the key idea behind the third annual New General Market Summit, held April 4 in Minneapolis. Co-produced by Drug Store News and Mack Elevation, the event attracted a number of leading global and emerging brands from the world of health and beauty.
What is the New General Market? 
The New General Market is a tapestry of cultures, ethnicities and demographics aligned against commonalities, needs and lifestyles. It’s less about specific demographic groups and more of an expanding global mindset. It is a movement of culturally competent organizations, creating products and services for the new consumer — inspired by inclusion, community and purpose.
According to Silverpop Research, most people only have five “best friend brands” — that is, companies from which they will repeatedly open emails and buy products. Meanwhile, a recent study by the Corporate Executive Board shows that most people wouldn’t care if 73% of brands disappeared altogether.
At the same time, Harvard researchers have determined that organizations that are fueled by purpose have a significant competitive advantage, delivering six times more value to shareholders than their profit-driven peers. The winners operate with purpose and soul.
Simply, doing good is good business.
Highlights from the full day thought-leadership event will be featured as part of an in-depth special report in the June issue of Drug Store News. In the meantime, what follows here are six big ideas to emerge from the third annual New General Market Summit.
Cultural competence matters
Rich Dennis, CEO of Sundial Brands and the pioneering vision behind the concept of the New General Market consumer, offered an emotional view of Sundial’s vision for community commerce vision and cultural competence.
In all, Sundial has created 15 farming cooperatives in Ghana. These self-contained businesses have positively affected the lives of women who process shea butter in their communities. School enrollment in these communities is up from 37% to 97%, and registration for health care has increased from 48% to 99%. As a result of these efforts, more than 14,500 households now are benefiting from increased incomes and access to fresh water.
Sundial Brands is leaving a legacy, breaking the cycle of poverty and helping put an end to the unnecessary loss of life through its innovative business practices.
Every brand must have soul
John Replogle, CEO of Seventh Generation, has led two brand revolutions; prior to leading Seventh Generation, Replogle was CEO of Burt’s Bees.
What is a brand? According to Replogle, it is reputation; it’s a story, a promise and a relationship, and it has soul. It is a combination of purpose, mission and inspiration. It’s the “why” behind the “buy.”
According to Replogle, in all of its decisions, Seventh Generation leadership asks itself, “How will this affect our business, the planet and people over seven generations?”
Today’s consumer demands honesty as an opening proposition. Today’s most admired brands — Starbucks, Kind, Dove and Harley Davidson — all have one thing in common: They have soul. They embrace aesthetics and articulate a clear brand story.
Soul matters. It creates loyalty and value. And today’s consumer will pay more for soul.
Building a culture of innovation
Eric Ryan, co-founder of Method Home Products and Olly Nutrition, shared his blueprint for innovation.
“Everything starts with culture,” he said. For the Method an Olly brands, it’s about “blurring the lines” of conventional categories and balancing art and function to create new, imaginative products that leverage design thinking.
Ryan’s organizations have a design-first mentality, believe in aesthetics and operate in categories primed for cultural shifts. “The vitamin aisle seemed confusing” and lacking products that appealed to new, younger consumers, he said. With such big, bold descriptions as “flawless complexion,” “respectful sleep” and “vibrant skin,” Olly calls out to the new consumer looking for a blend of design and efficacy.
The winners of digital influence 
Evan Neufeld, VP intelligence of L2 (a division of Gartner Research), discussed the importance of understanding a brand’s digital relevance.  L2, the brainchild of entrepreneur and New York University Stern School of Business professor Scott Galloway, benchmarks and assesses the digital effectiveness of brands through its proprietary Digital IQ Index, comparing a brand’s digital competency with the industry and its peers. It also helps suggest what level of investment a brand should make to improve its digital performance.
Neufeld reminded the group that today’s winning brands don’t collect data — they deploy it. And they only ask for data they will utilize quickly and transparently.
Collaborative, co-created discussions
Daniel Duty, CEO Conlego Consulting and a former Target director, shared his vision for creating mutual value for retailers and manufacturers.
Competitive pressures can create sub-optimal business partnerships. According to Duty, there are too many transactional relationships among retailers and manufacturers, which hinders growth for all. Real partnerships that are transformational emphasize elevated conversations, with a passion for discerning each other’s stated interests, risks and strategies for growth. The best high-level discussions are agreed to and executed through collaborative, facilitated, joint-business planning meetings. Sales and margin expectations, mutual investments, new initiatives and plan monitorization also are agreed to.  We are in a world where preferred relationships must be nurtured, not demanded.
Seamless omnichannel experience
Russ Heilbrun, director e-commerce for J&J and former Target digital director, shared a personal story to demonstrate how all brand experiences are changing.
Heilbrun, who has visited every professional major league baseball stadium in the country, talked about how the experience of going to the ballpark has changed over the last 15 years. Every facet of the experience — from how we purchase tickets and how we travel to the game to how we interact and communicate about the experience during the game — has dramatically changed. The memory of a baseball game now is an amalgamation of the incremental new experiences, which occurred prior to, during and after the actual experience.
It is a metaphor for all brands moving forward. The brand is a complete experience, and it begins way before the customer enters the store.
The most compelling and meaningful brands today have more going for them than just a positive balance sheet — they are increasingly becoming cultural forces for change and impact.
What’s the purpose of a brand today?
To transform the world.

To view the full special report, click here.

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Reaching, retaining NGM consumers

BY DSN STAFF

What can retailers do to create a better proposition for the New General Market? Where are the opportunities? How can retailers and brands work together to cultivate New General Market consumers and foster their success? How can they innovate with purpose and meaning with the common goal of connecting with the New General Market consumer?

These were the key questions executives at the third annual New General Market Summit, held April 4 in Minneapolis, faced in a series of vendor panel discussions. Co-produced by Drug Store News and Mack Elevation, the summit brought to light a number of avenues retailers can pursue in catering to New General Market consumers and fostering their own success.

Rely on influencers

“Connecting with doers and influencers is the key to driving sales in usage occasions,” said Audra Robinson, senior shopper marketing manager at Pfizer Consumer Healthcare. She used the example of a partnership with Pfizer and Kimberly-Clark, maker of U by Kotex, to help make Pfizer’s Advil brand more relevant to New General Market shoppers.

A digital and social media campaign that reflected the fashion-forward, sexy-but-cute look of U by Kotex packaging was created to position Advil as more than a general pain reliever — for example, as a solution for monthly menstrual pain. Harnessing U by Kotex as an influencer gave Pfizer “permission” to “play in fashion, and to speak to the Advil brand differently,” appealing to a new audience of females in the tween-and- older age group who use the feminine hygiene product, Robinson said. Key to the success of the program was “taking Advil out of the aisle” and assigning it prominent shelf space.

Bob Wiltz, chief customer officer at Paris Presents, corroborated Robinson’s comments about the importance of influencers in cultivating new general market shoppers. “The influencer approach is critical in building a brand,” Wiltz said. Paris Presents was ahead of the pack with influencers, tapping makeup artists Samantha and Nicola Chapman — founders of YouTube beauty channel Pixiwoo — a few years ago. They were not only influencers, but helped create the Real Techniques line.

Wiltz also said retailers would do well to reimagine “what speed looks like” because New General Market consumers want to see the items they want on retail shelves — when they want them. Decreasing the amount of time needed to empower decision-makers to bring product in-store and online, along with establishing a consistency of consumer messaging across both platforms, will go far, Wiltz said.

For Allegro, a division of Conair that manufacturers fashion-forward cosmetic bags, the key influencers of its designs are its customers. Allegro is a design house, VP of sales John Rizzo explained, which has built its business around cocreating exclusive brands with its retail partners.

“We think of our customer relationships like a consultant — first understanding their needs and interests, and then doing our best to include the most updated fashion trends into their beauty solution,” Rizzo said. “We believe all retailers should ask their manufacturing partners to include knowledge of emerging cultural and fashion trends into all their beauty and personal care lines. Brands must stay fresh, current and distinct. Think fashion for all — customization for the consumer and staying on-trend with anything having to do with beauty or personal care.”

Embrace the omnichannel model

While influencers clearly have an impact on how New General Market consumers engage with brands and retailers, meeting demands for a convenient shopping experience — largely by embracing the omnichannel retail model — is equally paramount, panelists observed.

“Consumers are placing more and more of an emphasis on convenience, and more importantly, are turning to digital channels to fulfill their need for that convenience,” said Cheryl Winston, VP and general manager at Kimberly-Clark.

Kimberly-Clark has found that 80% of consumers who have taken advantage of the opportunity to shop via “click-and-collect” become repeat customers. Once they have tried “click-and-collect” to complete their shopping three or four times, they become regular users and hence, even more loyal. This is especially true when the “click-and-collect” shopping experience hits the magic target, requiring no more than five minutes for customers to find and click on the items they wish to pick up in store.

Morgan Mulvihill, Procter & Gamble’s associate brand director, emphasized that an increased online presence is essential to delivering convenience. “It’s our job as brand-builders to show up where our consumers are most receptive,” she said. “It’s our job to think about changes in consumers’ lives to drive planned and unplanned purchases alike.”

Mulvihill backed that up with research conducted by P&G that shows that the number of consumers who shop on multiple devices exceeds the number of consumers who own toothbrushes. In addition, 3-in-4 consumers are omnichannel shoppers, according to P&G’s data.

Natalie Gillquist, shopper marketing manager at Unilever, said she believes tying into the convenience factor is paramount for any brand or retailer attempting to succeed in the New General Market. “There’s a lot changing in the landscape of the consumer shopper journey,” she said, adding that according to one study, the average mom has just 37 minutes of free time in her day.

The old days of making shopping lists are over, she said. “The definition has changed; convenience now means having the brand present at the right moment” for the individual consumer, whether on store shelves or online, she said.

But for retailers, adopting omnichannel and engaging the New General Market consumer necessitates paying close attention to the “essentials basket,” said Laura Hyland, VP of e-commerce for Henkel Consumer Goods. “The winners online are winning with the essentials basket, making it easy to obtain its contents there” by knowing how consumers shop their websites and designing these accordingly, Hyland said. In some European markets where this has become the norm, such as France, the average online shopping basket contains €167 worth of purchases; the average in-store shopping basket contains a mere €35 worth of purchases.

Collaborate with brands

Yet another New General Market imperative for retailers is collaborating with brands to enhance the store experience, panelists said.

One piece of the puzzle is working together to promote human interaction with brands in the retail space, said Heather Warnke, marketing director at Kao USA. “Eighty-three percent of people under the age of 35 say they are lonely” at some point or another, Warnke noted. “Manufacturers and retailers can cooperate to create a human connection in the store, … and retailers that will win [will foster] actual interaction” in the way they configure store space.

Kim Washington, VP of consumer brands at Medline Industries, would like to see retailers do more to “meet consumers where they are” by offering relevant product assortments in store, as well as online. “Consumers look to [retailers] as a trusted resource for the products they need,” Washington said. It also is the key to forging the emotional connection with brands that the New General Market expects to have.

“Consumption of health care at retail will only continue to increase, and [retailers] must be ready for that,” Washington said. Meeting consumers where they are means sharing information online, she added.

Kristine Urea, VP of category management and shopper strategy for Nature’s Bounty, said growth opportunities for retailers lie in collaborating with brands to elevate the “healthcare management” category to a real need, promoting very different categories of product in store in a cohesive manner. “Consumers need to be confident that they are finding the right solutions — in training, fitness techniques, apparel and proper nutrition as part of fitness,” Urea said. Retailers must be cognizant of having the right assortments to fit the bill, she asserted, but customers — and retailers themselves — also would benefit from the ability to find products to suit all of their “healthcare management” needs more easily. Consequently, she said, the “larger opportunity” comprises creating product presentations that are curated across categories, and, in turn, inspiring time-crunched consumers to feel energized and excited during their short shopping window.

Amy Thie, manager of category insights and category management at Bayer Consumer Health, described a scenario wherein brands collaborate with retailers to speak to consumer priorities. She cited the example of work Bayer has done to address parents’ need to keep children fit and healthy. The endeavor involved everything from helping decide how shelves should be organized and how they should look to providing parents with online information for better decision-making. “Cooperation — it’s how you connect in the moment that matters,” Thie said. “It’s a way, also, to create more influences.”

In another twist on collaboration, Kathleen Leigh, marketing director at Purell Consumer/ GOJO, advocated retailer support for smaller microbusinesses and microfinancing. This encompasses helping to create consumer awareness of these microbusinesses, as well as extending lines of credit to support their growth. New General Market shoppers like to support brands that give back.

“Small businesses are also very keen on cost control — subscribe-and-save models or automatic replenishment,” Leigh said. “It’s also about community — what is put out there to help grow thriving businesses.”

Change approaches to categories

Finally, several panelists touched on the benefits of looking at categories differently than in the past. “The male skin care category represents a significant opportunity for retail,” said Simon Duffy, founder of Bulldog Skincare. According to Duffy, the U.S. market for male skin care is “underdeveloped,” with men in the United States spending an average of just $2 per shopping trip on skin care; meanwhile, their counterparts in the United Kingdom and Korea spend $6 and $34, respectively. Duffy suggested that retailers might capitalize on this market by treating men’s skin care as a category in and of itself, rather than as a subset of shaving.

Meanwhile, probiotics is on the verge of becoming a destination category unto itself, said Nick Rini, VP of global sales at i-Health. The market is slated to reach $1.7 billion in 2020, he reported.

Nonetheless, there remains work to be done. Consumers must be educated about the benefits of probiotics to encourage them to take the products daily. Rini believed key influences, such as the medical community and health bloggers, must be leveraged.

“Additionally, innovation will continue to be a big part of growth, and new discoveries about [the advantages of probiotics] must be brought to consumers’ attention” across all platforms, Rini said.

Eye care is another category that is well-suited for heightened emphasis at retail, according to Chris Marshall, Bausch & Lomb’s VP of marketing. “[Retailers] can attract the shopper by making eye care a destination,” Marshall emphasized. The recipe for success, he said, includes participation in national vision-related awareness campaigns and emphasizing, through promotional endeavors, the wide range of eye care products available through all channels of distribution.

“Consumers need to be engaged in store and online — reminded and incented to fill their eye care needs,” Marshall said. “And of course, converting online becomes increasingly important and critical in an omnichannel world.”


To view the full special report, click here.

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Fairer than fair trade

BY DSN STAFF

Today’s consumers want CPG companies to do things that impact the world, and to be part of brands that make the world better. Ignoring this new emphasis and continuing to focus on product itself will only lead to a loss of market share.

That’s the position of Sundial Brands and its CEO Richelieu Dennis, the pioneering vision behind the concept of the New General Market consumer. Sundial not only has made an impact on how retailers merchandise their stores and what they buy for their shelves, but the company’s efforts go well beyond the four walls of a store. Sundial has built and operates according to a community commerce model that centers on investing in the communities from which it sources its raw materials.

At the third annual New General Market Summit, co-hosted by Drug Store News and Mack Elevation in April, Dennis talked about the evolution of Sundial’s community commerce model, and how the concept is not only improving its own business, but is helping to benefit thousands of lives in one of the poorest places in the world.

Under Sundial’s original and long-standing community commerce model, the company purchased raw ingredients — shea nuts and moringa harvested by women in Ghana — from West African traders. Because of a lack of infrastructure, these women and their families, Dennis explained, were caught in an unending cycle of poverty, forced to accept the lowest prices traders would offer; their daughters were unable to attend school because they needed to help their mothers haul water for the harvest. Sundial made a decision to affect change by finding a way to be “fairer than ‘fair trade’ and more ethical than ‘ethically sourced’ — [not to mention] sustainably break the cycles of poverty and put an end to unnecessary loss of life through innovative business practices and commerce,” he said.

Five years ago, Sundial partnered with Target to raise the ante on the model. It began to establish self-contained shea butter- and soap-producing cooperatives in Ghana, providing them with training, equipment and running water. Also, it put in place a plan for reinvesting 10% of the profits from products sold in Target stores into building the communities’ infrastructure. The model has since been expanded, with 15 farming cooperatives in operation and 10% of profits from Sundial products sold to all retailers, not just Target, now dedicated to infrastructure improvements and maintenance.

Sundial’s community commerce model has had a significant impact on the lives of the women in the cooperatives, as well as on the lives of their families. As its business has grown, so has its impact on these communities. In 2014, Dennis said, Sundial purchased 71,428 kilos of certified Fair for Life Trade shea butter from the cooperatives; in 2016, it purchased 270,000 kilos of the ingredient. Some 14,500 households now are benefiting from the existence of the cooperatives, their infrastructure and the increased incomes they afford, up from 4,000 in 2014.

Since 2014, the number of communities with access to fresh, piped water has increased from zero to 13, school enrollment of shea butter processors’ children has increased from 37% to 97% and the average annual income of a shea butter processor has risen from $184 to $1,700 — enough to comfortably sustain their families. And the number of shea butter processors registered for health insurance more than doubled between 2014 and 2016, from 48% to 99%.

Moreover, under the aegis of the model, all 15 cooperatives were able to establish individual savings and loan associations from their own earnings. As of the date of Dennis’ presentation, savings accrued totaled $127,511. A total of 256 members have opened accounts and procured loans for other economic investments and income-producing endeavors.

Sundial’s vision for community commerce ties in quite well with the mission of its brands, modeled around the idea of cultural competence, which is defined as “understanding what’s happening with our consumers culturally,” and “disrupting the marketplace by knowing and engaging the New General Market consumer faster and better,” Dennis said. It also means recognizing “what she’s doing and what is influencing her decision to buy and engage with our brands.”

This means addressing the multicultural character of the market rather than “over-delivering to the greatest common denominator,” and engaging consumers with “digital excellence … at shelf and wherever they work and play.” It also calls for embracing a new consumer mindset that prioritizes concern not about what products do, but how they impact others — i.e., their overall purpose. Sundial will continue to pursue initiatives that impact the lives of others and fulfill consumers’ push for positive change in the world, Dennis said. “The journey toward transformative performance, inclusion and purpose never ends.”

(Click here to view the full Special Report: New General Market Summit 2017.)

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