cpg: health & beauty aid:

Taking on Private Labels

Like consumers in other sectors, health and beauty aid (HBA) consumers have been tightening their budgets and are more cautious with spending. Largely due to the current state of the economy, HBA consumers are presently focused on products that are less expensive and that offer more convenience. And they’re not just looking to national brands to meet these needs; increasingly, consumers are choosing to purchase private-label brands over national brands. HBA is one of the categories with the largest growth in private labels.

Chain drug stores have become a driving force in the HBA retail market. They have capitalized on consumer focus on price and convenience by expanding HBA product selection; more important, chain drug store retailers have expanded their own presence on these shelves – offering more products with their own private-label branding. Walgreens Corp., CVS Caremark and Rite Aid Corp. have all launched exclusive health, bath and skincare lines with positive consumer response. In addition, chain drug store retailers have incorporated innovative services, such as store beauty advisors, that allow for greater private-label presence via in-store recommendation.   

Overall, current HBA consumer focus is on products that are affordable and that also offer convenience and quality. We should expect to see a strong continued presence by chain drug store retailers in the HBA sector driven by increase in health and beauty product offerings, with expanded presence in private-label products. Drug store private labels pose a notable threat to national brands, which should focus on maintaining relevance through communication and product innovation aimed at both cost-quality ratio and convenience. Likewise, national brands should begin to target new segments of consumers, focusing on diverse ethnic and life-stage segments.