INSIGHTS AND PERSPECTIVES

Rising Stars: HRG highlights top product launches from October

BY David Salazar

The new product team at Waukesha, Wis.-based Hamacher Resource Group keeps busy, and October was no exception. The team evaluated 120 products that launched during the month across OTC, beauty and wellness categories. Of the total products, roughly 49% (58 products) were beauty, 28% (34 products) were wellness-focused and 23% (28 products) were OTC-focused. The standouts were:

WaxRx Ear Wash Refill Kit
Dr. Easy, makers of the WaxRx ear wash system, added an option to refill the system in October. The kit includes ear drops with chamomile and aloe to soothe the ear, as well as a pH-conditioning ear rinse used after earwax removal. The ear rinse is designed to balance the ear’s pH to reduce risk of infection.

Listerine Ready! Tabs, Clean Mint
The latest from Johnson & Johnson’s Listerine brand, Ready! Tabs transform in a user’s mouth from solid to liquid. Users simply chew to activate the tabs, swish the liquid around and then swallow after 30 seconds. The product is alcohol-free to make it safe to swallow, and the company said it is formulated to last for hours.

Kamedis Calm Eczema Therapy Wash
Kamedis Dermatology, maker of botanical-based skin care products, expanded its offerings with its Calm Eczema Therapy Wash. The product is formulated for skin that is extremely dry, red, itchy and irritated due to eczema. Its botanicals are meant to work in combination to provide prebiotic properties that the company said contribute to overall skin health.

Neutrogena Makeup Remover Cleansing Towelette Singles
In an effort to make makeup removal easier on-the-go, J&J’s Neutrogena brand debuted these individually wrapped face wipes — a more portable version of its mainstay makeup removing towelettes. The product is packaged in bags of 20 wipes that the company said are ideal for on-the-go.

Mucinex Children’s Stuffy Nose Nasal Spray
Reckitt Benckiser has extended its Mucinex brand’s offerings with Mucinex Children’s Stuffy Nose Nasal Spray, meant for children age six years old and older — the first for this age group for the brand. The nasal spray is formulated to last as long as 12 hours to relieve stuffy noses.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?
INSIGHTS AND PERSPECTIVES

Consumer trends reshape the retail landscape

BY Mark Hamstra

The consumer and retail environments are changing rapidly, and CPG brands need to evolve their strategies in order to stay relevant. That was the message Brian Owens, vice president of retail insights at Kantar Consulting, brought to his presentation at the recent Emerson Group Industry Day conference, held in Philadelphia in late September.

Among the key consumer trends to consider is the growing divide between low-income and high-income consumers, he said. “We also have to understand that the big middle class is shrinking,” Owens said. “It’s about high income and low income, and there are different needs for each.”

That trend will impact CPG companies, Owens said, because there are fewer opportunities for “one-size-fits-all” products, and more opportunities for items that appeal to either end of the income spectrums.

The trend also is evident among retailers, as demonstrated by the growth of such discount formats as Aldi and Dollar General.

At the same time that retail formats appealing to low-income consumers are growing, so is spending on more high-end products. People are willing to spend money to indulge, said Owens, who noted that the No. 1 reason people trade up to higher-end CPG products is indulgence, cited by 73% of shoppers in a recent survey.

Another key consumer trend to be aware of is the shift toward spending on services, with healthcare services leading the way, Owens said. Additionally, Owens noted that Health care represents 27% of the amount households spend on services, followed by financial services and food services at 9% each.

“These are all things that people need to outsource,” he said. “They need help.”

Shoppers ultimately are looking for stress-free shopping experiences, Owens said. That impacts how retailers and CPG companies should be approaching their omnichannel strategies.

“We all should be stress-free brands, at the end of the day,” he said. “There’s value in that. It’s important for us to understand how our brand fits into that stress, and how it unlocks it and alleviates it.”

Another important consumer trend to consider is the fact that many millennials are waiting until they are older to have children. This means that often young mothers have advanced further in their careers and have more money to spend, and, at the same time, are looking for convenient shopping solutions.

“That is a cohort that we all need to really consider differently — that 40-plus mom,” Owens said.

In addition, retailers and brands need to consider the upcoming “centennial” generation, which Owens described as those between ages 0 and 19 years old. Like the millennials before them, this group will be evaluating products based on their purpose.

“They’re looking for the value you’re providing them, and we have to understand how they define that,” Owens said.

Retailers and CPG brands also need to understand the health-and-wellness journey of the consumer, Owens said. People are transitioning “from sick care to self-care,” he said, which has ramifications for the products they are selecting as they focus on prevention and overall wellness.

Retailers and CPG brands need to be increasingly familiar with such emerging digital technologies as voice-based ordering and auto replenishment, Owens said, noting that by 2025, 30% of CPG purchases will be through auto replenishment. As a result, those products that are auto replenished will no longer be a part of consumers’ basket consideration, and it will be difficult to get those shoppers to replace those items with different offerings.

“If you’re not influencing them when they want to be influenced in an e-commerce environment, which is increasingly is digital, the cost of getting them back is going to be too high,” Owens said.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?
INSIGHTS AND PERSPECTIVES

Companies re-orient around e-commerce

BY Mark Hamstra

Retailers and CPG brands need to rethink many of the strategies they have traditionally employed to drive sales and adapt them for the fast-growing world of e-commerce, said Sam Gagliardi, senior vice president of e-commerce at IRI, in a presentation at the Emerson Group Industry Day conference in Philadelphia in late September.

“More than half of the entire industry growth is now coming from the online space,” he said. “Brands have to rearrange and reposition themselves to be able to win this brand new field.”

Although only 10% of CPG sales are e-commerce driven, 56% of the sales growth is coming from e-commerce, he said, and about 49% of that growth is coming from Amazon — or a total of more than 25% of all CPG sales growth.

Amazon has succeeded by focusing on “three very simple rules,” Gagliardi said: putting the customer first, investing in new opportunities and being patient.
Walmart recently has been stepping up its e-commerce investments to better compete with Amazon, but Amazon has a tremendous first-mover advantage, Gagliardi said.
Amazon also is well positioned for the future, with 100 million Amazon Prime customers who skew young and are comfortable shopping online.

“They give Amazon $11.9 billion dollars for the privilege of shopping on their website,” said Gagliardi, referring to total Amazon makes from the $119 annual membership fee for Amazon Prime.

Amazon captures more than 50% of 25-to-44-year-old shoppers, he said, noting that these shoppers represent high lifetime value because of their relatively young age.
In addition, Amazon’s strong position in media — Prime members can access the company’s vast library of movies and TV shows — will help the company continue to drive traffic.

Reasons for optimism
Despite the outlook for significant ongoing CPG sales growth at Amazon, Gagliardi cited several reasons for optimism among traditional food and drug retailers.
First, Amazon still only captures about 3% of total retail sales, and 90% of sales still are taking place in the brick-and-mortar retail environment. Also, he pointed out that while Amazon is capturing 49% of e-commerce growth, 51% of the growth is being attributed to other online players.

“The reason that is happening is that the e-commerce environment is becoming increasingly fractured,” he said, noting that the click-and-collect model is becoming a much more important element of e-commerce growth.

By 2022, click-and-collect will account for 42% of e-commerce sales, he said. “That will open up e-commerce to competitors for other types of products that are usually too heavy, or too low cost to ship,” Gagliardi said, citing such items as soda and bottled water.

He said retailers can evaluate the value of their e-commerce sales using what he described as the e-commerce algorithm, which can be calculated as revenue equals the product of traffic multiplied by conversion rate, times basket value.

One metric where traditional retailers outperform Amazon is on basket size, Gagliardi said. “This is where the click-and-collect model is panning out,” he said. “Amazon is a spearfishing shopping trip. The Amazon Prime shopper pays for the luxury to be able to shop on Amazon, buy one thing and then walk off.”
The click-and-collect model, by contrast, is more about building out a bigger basket, which can help drive market share.

Sales and marketing alignment
The growing importance of e-commerce in the sale of CPG products also requires much more alignment between sales and marketing within product companies, Gagliardi said.

CPG manufacturers have historically pushed large volumes of product into retail warehouses on the promise of huge marketing campaigns, leaving retailers to accept much of the risk if a product did not perform as expected. Thanks to Amazon, that’s no longer the business model in e-commerce.

“Now what happens is that the marketing teams have to go out and create the awareness,” he said. “You make sure folks are able to find you and that you’re able to build ratings and reviews.”

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

Polls

Which area of the industry do you think Amazon's entry would shake up the most?