Health and personal care will be the third-fastest-growing ecommerce sales category this year, growing 22.1% year over year, according to our forecast. Though only about a quarter (26%) of consumers said they cut back their spending on personal care items due to rising prices, according to CivicScience, almost as many (23%) said they began purchasing more private label items to keep costs down, per First Insight.
While there are signs of inflation easing, according to the Adobe Digital Price Index, digital prices of personal care products were still up 2.6% year over year in September, so it's as important as ever to cater to deal-seeking shoppers.
Here are three strategies to ensure ecommerce success in personal care:
1. Play the price is right
Some consumer packaged goods companies are offering different package sizes and new products to appeal to consumers seeking more bang for their buck, as well as promoting lower-priced items, per The Wall Street Journal.
For example, Unilever has bundled some versions of its Degree deodorant and Suave shampoo, as well as introduced a new lower-priced brand called Madam for Walmart.
2. Hit subscribe
Meanwhile, direct-to-consumer (D2C) companies are using subscriptions to engage with consumers. As many as 75% of D2C brands will have a subscription-based offering by 2023, according to PipeCandy and Rodeo.
Focusing on convenience over novelty can help battle subscription fatigue. Convenience-based categories like beauty and personal care (along with food and beverage) make up 54.3% of worldwide subscriptions, according to Recharge, a subscription payments platform.
3. Go where the trends go
For beauty-focused personal care brands, department store retail media networks offer a great way to connect with engaged customers.
And the money is there. Macy’s Media Network generates more than $35 million a year, while Nordstrom reported $40 million in ad revenues last year.
Who’s winning: Amazon is the one to beat. This year, Amazon’s ecommerce sales of health, personal care, and beauty products will grow faster than any other category, rising 20.0% year over year to reach $32.59 billion. This represents 8.2% of Amazon’s total retail ecommerce sales.
But other companies are trying to nab a piece.
- Earlier this year, Gopuff launched its own health and wellness label, hoping to capture shoppers looking for a quick remedy.
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Thrive Market has built its business around health and wellness ecommerce. The company, however, struggles with the balance between providing fast delivery and being carbon neutral, according to CEO Nick Green.
Why we care: We predict retail health and personal care ecommerce sales will reach $114.49 billion this year, representing nearly 11% of total ecommerce sales. Next year, that will increase to 11.7% to total $135.59 billion.
What’s behind this growth? Consumer desire for convenience and faster delivery speeds, according to our analyst Blake Droesch.
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