Health and beauty aids (HBA) aren’t usually products that many c-stores take the time and trouble, or go to the expense to actively market. But they should.
The U.S. beauty industry reached $16 billion in 2015, a 7% increase over 2014 sales, according to the NPD Group. Makeup experienced the healthiest sales growth—13% during that period.
“As convenience stores look to augment their sales by expanding their lines of health and beauty products, they have several marketing tools to leverage,” said Ken Morris, principal of Boston Retail Partners, a business management consulting firm in Boston. “Beyond the obvious marketing strategies of expanded assortments and showcasing and promoting products at the point of purchase and fuel pump displays, savvy convenience store operators are using more innovative approaches to drive sales growth of specific products.”
Loyalty programs are becoming more common in the convenience store space, Morris said, especially with some of the destination convenience store chains that have a cult-like following. “Promoting health and beauty products with special discounts or extra reward points via the loyalty program is a great way to increase awareness and sales of products, especially those products consumers might not expect to find in a convenience store.”
Another advantage of tapping into loyalty programs is the ability to track customers’ purchases and use real-time analytics to predict when they are ready to repurchase a product, much like some drug store chains are doing.
“With successful marketing strategies,” Morris said, “convenience stores can position their brand to become a destination for shoppers’ health and beauty needs on a 24/7 basis.”
For retailers, boosting HBA sales has a lot to do with developing the right mix of health and beauty care items.
Kumar Assandas, a 7-Eleven franchisee in Henderson, Nev., gives the HBA section just over six feet of shelf space in his store—roughly double what it was eight months ago, when he made the change as a response to a rise in sales.
“The travel section of that category is what’s giving us a boost,” he declared. “It’s where customers can get everything that you would need if you were taking a quick trip out of town: shampoo, razors, small toothbrushes, small toothpaste.” What flies fastest off the shelves are two-fers: two for $3, $4, $5, even $6. “I feel like that’s the part that is giving us the boost.”
Assandas is among those who see less focus than there should be in c-stores on the health and beauty aids category.
“Operators do have the essential things that consumers need, but there is no variety and often there are no travel sizes in the mix. It’s all mostly take-home; they are more like Walgreens than they are, ‘What do you actually need to put in your suitcase?’ That’s a different opportunity.”
Assandas expects growth for the HBA category in 2016.
“I know it’s going to do well. I plan on having more makeup sooner or later. The women are taking to this new makeup line. It’s good quality, the ring is awesome—my margin is over 30%, and it’s a good buy for the customer.”
Stay tuned to Convenience Store Decisions‘ March issue, where we delve into 38 in-store categories to identify emerging trends and garner retailer analysis to forecast what operators can expect for 2016 and beyond.