Self Care Market Poised for Robust Growth in Physical Retailers

The self care market — catering to the mindset and lifestyle that inspire consumers to adopt proactive life choices through investment in accessible wellness and better-for-you methods — can expect to see significant growth within brick-and-mortar retailers, according to the first annual “2019 Selfcare Benchmarking Study,” from retail industry trade association Global Market Development Center (GMDC)|Retail Tomorrow and global strategy and management consulting firm A.T. Kearney.

Not only do physical retailers capture a dominant share of the self care market, but online penetration is also lower compared with general merchandise, the study found, with such conventional categories as bath and shower, adult incontinence, ear care, family planning, vitamins and supplements, and skin care all showing brick-and-mortar sales growth double the average rate.

The report, which analyzes market data from the GMDC|Retail Tomorrow/Nielsen Hierarchy tool and the association’s aggregated retail member surveys and interviews, provides emerging industry insights into how self care is leading retail transformation.

According to the research, within health, beauty, wellness and personal care, sales rose 1.5% between 2017 and 2018, driven by premiumization, as average price increased but volume remained mostly flat. Of the 26 categories in this space, 19 of those considered self care experienced year-over-year sales increases at brick-and-mortar retailers. Additionally, the study found that 75% of Americans are more likely to buy medicine and health care products in stores, and that 90% of American Gen Z shoppers prefer to purchase cosmetics in stores.

However, the report uncovered further growth opportunities in nonconventional categories, which are growing faster than traditional health and beauty categories in large part because they’re better aligned with consumers’ evolving thinking. For instance, athleisure (workout-type items of apparel that can be worn all day) grew by 8% between 2017 and 2018, and pet pampering is predicted to see 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,” noted Jason Maehara, manager at Chicago-based 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."
 
To capitalize on this as-yet-unrealized potential for solid growth, the report recommends that physical retailers reconsider how they position themselves in response to customers’ shifting preferences. Food, drug and mass (FDM) retailers are inherently better positioned to meet customers’ wider self care needs, due in large part to high trip frequency that can be leveraged to introduce customers to self care offerings.

The study advises that physical retailers do the following:

• Gain customer trust by having store employees provide real-time and personal in-store self care experiences.
• Use brick-and-mortar stores to pilot and launch new products, categories and experiences.
• Employ data assets, including loyalty programs and purchase history, to facilitate the creation of personalized offerings.
• Leverage partnerships to address self care challenges and quickly build capabilities.
• Restructure to function across categories with self care product managers focused on curating and managing cross-category self care solutions.

“At GMDC|Retail Tomorrow, we take pride in our leadership within the burgeoning self care space while we help steer retail’s transformation to embrace the consumerization of health care,” said Patrick Spear, president and CEO of Colorado Springs, Colo.-based GMDC|Retail Tomorrow, a nonprofit that represents more than 125,000 retail outlets. “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.”

The study was recently released at the GMDC|Retail Tomorrow 2019 Selfcare Summit, the industry’s only gathering focused exclusively on the consumerization of health care. The 2020 summit will take place Oct. 1-5.