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11/15/2022

Transparency influences shopper’s beauty, personal care purchases

NielsenIQ’s VP of Total Wellness discusses the latest trends influencing how shoppers are searching for, engaging with and purchasing personal care and beauty products.

Omnichannel shoppers seriously research what they purchase, whether that’s by looking for relevant attribute keywords online, educating themselves on ingredients and materials, or engaging with brands on social media to discover new products.

New research from NielsenIQ’s “Assessing Attributes eBook” contains data and analysis surrounding how consumers are tailoring shopping and product choices around specific attributes, ingredients and packaging trends. Sherry Frey, vice president of Total Wellness for NielsenIQ, discusses these findings and shopper shifts for the personal care category with Retail Leader Pro

Retail Leader Pro (RL Pro)Your reporting covers the increasing trend of consumers seeking out specific product attributes (such as recycled, cruelty-free, responsibly sourced, Fair Trade, etc.). Which product attribute categories do you see the biggest boost in shopper interest around? Are there others that have waned in recent months? Why do you think this is?

Sherry Frey: Across the store, we continue to see growth in four major areas (data ending Aug. 6, 2022, vs. three years ago): 

  • Animal welfare (up 37%); 
  • Environmental (up 25%);
  • Social responsibility (up 22%); and 
  • Sustainable packaging (up 18%).

For the personal care and beauty space, ingredient trends like paraben-free, sulfate-free and phthalate-free are strong and continue to grow, while animal welfare claims like “humane” and “vegan” fall into that mid-growth state. We’re always watching what’s emerging — high growth now, but also growing across categories — and see reef-safe, plastic-free and clean-label to be key. One thing, in particular, we are seeing in the consumer search data is a marked increase in reef-safe, aluminum-free and refillable packaging.

I would also add that I think the most dramatic shifts are happening around products with a sustainable packaging attribute. For example, NielsenIQ data found that products in the health and beauty category with sustainability claims had profound sales increases. Comparing overall sales in 2021 vs. two years prior:

  • Sales of health and beauty products with an “eco-friendly packaging” claim are up 248% and nearly $20 million by volume. 
  • Sales of products that are “Tetrapak certified” are up almost 200% for the same period. 
  • Items that are “plastic-free” are up by 172% in sales and by $61 million by volume.
  • Those with a “reusable packaging” claim are up 122% in sales compared to two years prior. 

[Read more: Saie’s industry-backed ‘The Every Body’ campaign champions reproductive rights]

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The data can spotlight opportunities around attributes and how consumers see sustainability’s importance.

From the consumer side, they’re becoming much more attuned to buying products that don’t add to the landfills, but I also think retailers and brands — many with global sustainability initiatives in play —  are stepping up and offering more products with these sustainability claims, and are doing more to promote them to conscious consumers.

RL Pro: How can retailers stay on top of these shifts in personal care products to have the most attractive merchandise available to their customers, whether in-store or online?  

Frey: We think it’s key for our clients to watch both category and attribute sales data as well as our trending attributes/search data, which helps with what we call signal identification. It helps brands know what’s coming — what consumers are searching for digitally on a retailer’s platform — before we may even see the trend in the sales data. We are finding that consumers see wellness beyond just their personal health and now include dimensions like their financial wellness, their tech wellness, their social connectedness, their care for the environment and more. Our clients often watch what the “help seekers” and “first adopters” are buying, because that usually signals what is emerging and can become a more significant trend.

RL Pro: Do you feel that retailers and manufacturers are well aligned on what attributes shoppers are seeking out right now in personal care products? If not, where can they improve channels of communication and resulting product assortments? 

Frey: I think retailers and manufacturers, specifically within personal care, are doing a pretty good job getting products out there that matter to shoppers, such as “clean label.” Still, there is significant room for improvement in terms of online transparency and helping shoppers find these products.

NielsenIQ audited the websites of 40 top retailers, testing search capabilities for products with attributes and studying nutrition fact panels, imagery and more — and the results are not great. The audit showed that retailers failed to return, on average, 72% of the products in their available assortment that qualified to match a search result. This means most retailers aren’t even offering up available products to shoppers.

On top of that:

  • Nearly 4 in 10 of the websites audited had only one or zero product images per product displayed online; 
  • 24% were missing ingredient statements on more than half of food and beverage product detail pages; 
  • A third missed nutrition fact panels on more than half of their food and beverage product detail pages; and 
  • Half failed to provide any iconography on product detail pages.

[Read more: Beauty consumers on the demand for transparency]

RL Pro: Are you seeing a difference (in the numbers) between consumers seeking sustainable or ethically sourced products to purchase online vs. in-store?

Frey: We are seeing this growth online vs. in-store in the personal care space, but attributes and claims tend not to weigh heavier on shopping behavior in one channel over the other. Consumers shop consistently in-store and online when it comes to attributes.

The biggest driver when buying online or inside brick-and-mortar locations is convenience and when a shopper needs a product. For instance, when a consumer needs the item right away, in-store purchases win out — especially in categories like first aid, pain relief and sexual health. Then some categories are more regularly purchased, and those products see an increase online. Subscriptions highlight this: We’re seeing categories like vitamins and supplements, adult incontinence, and sleeping and alertness products as growth leaders in online subscriptions, since they tend to be recurring purchases and scheduled.

RL Pro: Personal care products are typically premium-priced products. How is inflation influencing this trend? 

Frey: Personal care is also a category where shoppers have deep feelings for a brand or product that provides exactly what they need — beyond price. Inflation is undoubtedly a cause for concern, but consumers are good at finding a balance between what they’re willing to pay vs. what they’re expecting a product to give them in return (regarding attributes and characteristics that matter to them more than price).

Our report on the evolving personal care shopper highlights this. For example, period care and adult incontinence products that are better for the environment with safer ingredients are increasing within health and beauty care in the sexual wellness category. Attributes that are trending among these products are: 

  • “100% recycled paperboard;” 
  • “Shea butter;” and 
  • “Biobased product certified.” 

Period care products that are: 

  • “Premium” have grown by 25%; 
  • “Recycled packaging” has increased by 13%; and 
  • “Free from phthalates” has grown by 6% year-over-year, as of May 21, 2022.

RL Pro: The reporting also touches upon consumers seeking information regarding company sustainability, fair trade and labor practices online. How can both retailers do a better job of communicating how they support issues of concern to shoppers?

Frey: Consumers have told us they like to have information online about products because it allows them time to search, discover and learn about products on their schedule — when they want to. This is where we see an excellent opportunity for retailers to include more rich product attribution and improve site searchability and filtering. It gives consumers more control over finding products that matter most to them. We’re seeing some online retailers even going as far as having consumers search first by their values and what matters to them rather than starting with the category.

RL Pro: What will consumer demand for value-attributed personal care products look like in the near future and beyond?  

Frey: We’re just beginning, in my opinion. All this data and these reports show that attributes matter to consumers. How retailers deliver on this demand is another story. Equally important when you look at the near future, it’s a deep understanding of how attributes matter across demographics. How are shopping habits changing among multicultural segments that share similarities, but have different life priorities?

NielsenIQ panel data shows vitamins and supplements are sought by Black and Asian shoppers who fall into the category of living a balanced life to stay healthy. How will brands meet this shopper and ensure they find the items that matter to them?

[Read more: Consumers seek out hair care formulas addressing hair thinning, overall scalp health]

Diversity, equity and inclusion are significant factors in attribution for personal care, and it equates to better business. Our insights show that CPG companies with stronger product diversity grow six points faster.

Consumers want brands and retailers to be more transparent and open about their products. A survey from NielsenIQ and FMI found that 1 in 5 U.S. consumers use the internet to learn about a company’s sustainability practices, and 1 in 3 use online resources to see how ingredients are sourced.

The survey also found that 72% of U.S. shoppers said brand transparency is “extremely important” or “important.” The retailers in the near future that are transparent and make it easy for consumers to find products with the attributes that matter to them will win. 

This story originally appeared on Retail Leader Pro

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