Walmart topped all other retailers in the sale of personal care items, owning 19.4% of the $40 billion market. According to the TABS Analytics Personal Care Study, traditional food stores such as Kroger and Publix owned the second-biggest share of the personal care market at 16.6%, followed by Target at 12.1%.
Dr. Kurt Jetta, CEO and founder of TABS Analytics, found the push toward value brands the most compelling finding from the research. Results showed that private label has a very low interest and market share in the personal care sector. And in the consumer quest to find value on the shelf, there is a current and clear shift towards Dollar Stores and other discount dealers.
Online purchases only amount to 3.1% of this market, roughly $1.2 billion. Over half of personal care buyers do not buy any personal care products online at all, a vast difference from the purchase of online beauty products, which represent 9% of all transactions. For those who are shopping online, Amazon, Walmart.com and Target.com are the top retailers of choice, representing 82% of all online personal care transactions.
“Walmart, traditional food stores and Target are the clear winners in the personal care market with almost 50% of all estimated purchases,” said Jetta. “Unlike what we see in beauty where online sales is a key driver, online sales in personal care products is relatively unimportant coming in at just 3.1% of market share.”
But Jetta says that this is not unusual as most consumer packaged goods (CPGs), minus baby products and vitamins, have a low share of sales online, with grocery even lower at 2%. The overall demand to shop for frequently purchased products online just isn't there yet. In fact, 60% to 65% of consumers don't buy any CPG online at all.
"Share for CPG has been relatively flat over the last four years we have been tracking it," Jetta told FierceRetail. "Our own research and research done by Temkin and Gallup all show that consumers are relatively very happy with the in-store shopping experience for personal care and CPG in general. Encouraging these people to shop online moves them to a platform where they lose money."
For traditional stores, CVS, Walgreens and Dollar Stores combined make up 24.7% of all purchases and 44% of those who shop at Dollar Stores report purchasing value brands. Shoppers looking for deals migrate to CVS, Walgreens and Dollar Stores for more deals through circulars and loyalty programs, which are not as prevalent at Walmart.
The demographic leading the personal care purchasing market is Generation X, buying 37% and millennials coming in second at 24%. Millennials are much less influenced by deals, especially free-standing inserts and circulars.
Jetta says that millennials lean more towards Target and natural food outlets. They are not interested in circulars because their newspaper readership is much lower than other age groups. Consumers have to search out digital offers, and loyalty card offers tend to get buried in email. Therefore, millennials are not on the hunt for deals as much as other age groups.
Out of all those surveyed, 90% are using at least one deal tactic regularly. Less-affluent shoppers prefer using passive deal tactics such as everyday low prices, larger sizes, bonus packs and private labels.
Rewards outpace circulars at 32% versus 30%, with supporting evidence that CVS and Walgreens have attracted high levels of heavy deal shoppers with rewards card programs.
RELATED: Amazon brings beauty home
While Jetta says that loyalty programs are one good tool for retailers to have in their arsenal, he believes they should be used in conjunction with other types of deals such as in-ad coupons, bonus sizes and other deals.
"The problem we've seen is that many retailers move to employ loyalty card offers to the exclusion of other types of offers, and that hurts their business significantly," he said. "Consumers continually state and demonstrate that they are willing to switch outlets to get the best deal."
Organic personal care products are only purchased by 8% of the population, but among heavy personal care buyers, 16% purchase organic. The heaviest hitters—those who spend the most on personal care items—fall between the income range of $60,000 and $74,000. Beyond that, as income goes up, consumption for personal care products goes down.