Up close & personal

Australia's ever busier consumers are increasingly looking to their local convenience and impulse outlet to provide them with everything they want exactly when they want it. That means that – as well as tobacco, cool beverages, confectionery and bread – convenience and impulse shoppers also expect to find personal care products such as razors, tissues, condoms, deodorants, sanitary products and analgesics on the shelves.

Profitable possibilities

The personal care products category can be broadly divided into the areas of medicinal, family planning, sanitary protection, deodorants, and skin care, and each of these appears rich with profitable possibilities. Indeed, the recently released Australasian Association of Convenience Stores Report shows that medicinal products, for example, enjoy favourable margins and sales that are currently growing at 7.7%. Now that's an opportunity.

The personal care category is one which is well suited to the convenience channel. After all, on-the-go workers who suddenly need some deodorant before that important meeting, or who want to shake that badly timed headache before a much-anticipated lunch appointment, will value convenience above all else.

Clearly for the analgesic-buying convenience customers, speedy pain relief is likely to be a priority and it is therefore no surprise to learn that GlaxoSmithKline's (GSK's) leading product in the channel is the Panadol Rapid Handipak 10's, a product that is absorbed twice as fast as regular Panadol tablets.

"Panadol Rapid Handipak 10s also comes in a unique, slim, easy-to-carry pack that fits into consumer's on-the-go lifestyle," said Victoria Outred – GSK's Category Development Manager Analgesics. "Convenience and Petroleum offers a strong point of difference versus other channels with respect to accessibility, location and extended opening hours."

Critical to maximising the sales of all personal care products is, of course, understanding the consumer's needs.

"On the whole the Grocery shopper is purchasing on behalf of the household as a result of being out of stock or, nearly out of stock at home," said Ms Outred. "Whilst the Convenience and Petroleum impulse shopper is purchasing to meet an immediate need."

The product range that GlaxoSmithKline ranges within each channel is then affected by who is shopping, for whom the product will be purchased, and when they require it.

Shopper insights

"Route and Convenience is a key channel that is armed with key shopper insights giving it a great opportunity to evolve the personal care range and location to drive greater category growth," Ms Outred said.

She believes that having the right range, at the right price, in the right location and with the right shopper awareness will cement the growth of personal care products within the channel.

"Understanding the in-store environment from a shopper's point of view is central to activating it successfully to optimise sales," said Ms Outred. "Personal care tends to be a destination category within store and, as such, the aisle becomes the primary shopper point of engagement."

She says that shelf stripping and wobblers help to make the category easier to shop, and that gondola ends can interrupt the shop and are particularly effective for promotions and new lines.

While sales of analgesics have been positive and further healthy growth is predicted, it is a mature market and, as a result, companies such as GSK invest heavily in research and development to bring about organic growth and new news to their leading brands.

"The recent successful introduction of products such as, Panadol Back+Neck, Panadol Cold+ Flu and Panadol Rapid Handipak 10's are a result of identifying different consumer pain state needs," Ms Outred said. "GSK also invests heavily above the line to maintain brand awareness, drive seasonal incidence and educating consumers."

Lifestyle changes & personal care

The growth in demand for personal care products from convenience and impulse outlets has undoubtedly been driven by our increasingly frantic lifestyles. Indeed, a new independent study focusing on the daily habits of 1000 Australians sponsored by Unilever, found that from home to office to gym, a massive 69% of Australians admit they are lugging more stuff around in their bags than ever before. It seems we may have become a nation of urban nomads, living out of our bags.

"Australians are living their lives at a faster pace than ever before," said Unilever's Category Manager – Minis and Gift Sets, Caroline James. "Many Australians attribute their need for a suburban sherpa to the fact they have more commitments to juggle, they are spending more time on the road and less time at home, plus the ever increasing pressure to look good at all times."

The Unilever-sponsored study revealed that most women (67%) say their handbags have become bigger and heavier and the 'man-bag' has moved from a questionable fashion accessory to a mainstream necessity for the modern man with a whopping 83% saying they carry one on a regular basis to cope with the ever increasing load.

It was this trend indicating a clear consumer need for health and beauty products that can be purchased and consumed whilst on the go, that prompted Unilever to launch Travel Minis in 2006. The products were an immediate success and the Mini Products have gained further momentum since.

The range comprises of a male and female travel pack, as well as 22 individual products, encompassing hair care, body wash, deodorant and skin care, and comprising of brands such as Vaseline, Dove, Rexona, Lynx and Sunsilk.

"The Male and Female Travel packs are our top performing products across the market and are perfect for a weekend away," said Ms James. "For travel and convenience our top performing Mini products are the deodorants which are ideal for travel or on the go."

Unilever says it does not price promote the Minis range as testing has shown that pricing is inelastic, that is not responsive to price discounts.

"Instead we support the range above the line to drive awareness as this is an emerging category," Ms James said. "We also invest in impulse space in store, with things such as counter tops and hang-sells, as this is an impulse purchase driven category making location in store key."

Ms James says Mini formats should be sited together as a category in high footfall areas rather than located next to the larger formats.

Packaging to be noticed

She emphasises also that attractive packaging is particularly important in this category as it needs to be eye-catching and cute to attract impulse purchasing.

Procter and Gamble, which produces the Gillette razors, says it also uses its packaging to communicate key product features and benefits, and it wants to get noticed on shelf.

"A strong presence in-store is important when it comes to capturing the consumer's attention and encouraging sales," said Mike Abbott, Marketing Director, Procter & Gamble ANZ. "In the impulse channel our products are often made available in counter units which double as point-of-sale … the counter unit designs help to communicate key product features and benefits to consumers while also attracting attention."

Procter and Gamble offers a range of men's and women's shaving and personal care products, and its leading products include the Gillette Fusion Phenom and Gillette Fusion Phenom Power wet shaving systems for men, and the five bladed Venus Embrace for women.

"As an essential grooming item, personal care products like razors are perfectly suited to the impulse and convenience channel," said Mr Abbott. "We are finding men and women in the 16 to 45 age bracket are constantly looking for a better shaving experience and are willing to pay a little more for a closer, more comfortable shave when they have the need to purchase a new razor."

This higher price point is obviously potentially good news for the C&I retailer but it means they must stock the product the consumer is looking for.

Procter and Gamble says innovation in blade technology and handle design is continually improving the shaving experience, and the consumer is responding to the advances.

"Products like Fusion with five blades and a trimmer are ideally placed to meet this target market need – much more so than older twin blade technologies," Mr Abbott said. "For the ladies, the Gillette Venus Embrace is successful because the product has been designed with the end consumer in mind – from the ergonomic handle design through to the five blades that work to remove virtually every hair."

With summer upon us there have also been a number of new products launched under the Venus brand. These include the new Venus Tropical Disposable which features a scented handle and which is said to be perfect for holiday getaways, and the Venus Spa Breeze which the newest version of the 2-in-1 razor with shave gel bars.

For its part, Gillette has also recently launched its first ever range of pre and post shave skincare products designed for men's core needs. The newly developed range includes products to help prepare, shield and refuel the skin.

"Many men find the skin care category confusing," said Mr Abbott. "The Gillette range offers a simple no fuss routine to address the individual skin issues faced by many men."

In-store product placement

While in-store product placement is absolutely critical for the sales success of all personal care products, it is doubly so for condoms.

Condoms can be embarrassing to purchase in any channel, so any opportunity to minimise this embarrassment is likely to prove beneficial to the retailer. In Convenience, having product available at the counter is ideal as it reminds consumers to buy condoms and they don't have to ask for them.

Having condoms behind the counter can make it very difficult for consumers to purchase as many are too embarrassed to ask and will simply buy elsewhere.

"Experience has shown that the optimum way to increase condom sales is simply to have them easily accessible," said Ansell's Sales and Marketing Director, Personal Healthcare, Matthew Groskorth.

"Being able to buy condoms in a smaller store with fewer customers is a great benefit to many consumers."

As well as hopefully making a profit, C&I outlets selling condoms are also performing a vital public service. The fact that consumers who use condoms are still failing to use them on every occasion is partially responsible for the escalating rates of sexually transmitted infections. Having condoms easily available at all hours may help encourage consumers to have condoms and therefore minimise the practice of unsafe-sex.

In terms of packaging, generally conservative packaging is said to be the most popular, but one or two items with risqué packaging will likely appeal to a portion of consumers, and may drive additional sales. The fact that condoms respond so well to simply being visible is clearly great news for the retailer keen to lift sales.

"If condoms can be seen between the door and the counter, rather than 'hidden' on shelves, the Convenience market has much great opportunities to grow," Mr Groskorth said.

Besides visibility, there is another crucial factor in convenience and impulse outlets attempts to increase their share of the condom market. Because the products are a serious purchase and a high level of trust is required in the condoms themselves, having the right 'brand' is considered vital.

While the condom market grew 2.9% (MAT 2 Aug, 09), Ansell sales increased 7.8% and, according to the latest Nielsen date, it now holds 77.2% of the convenience market. That's largely due to the fact it is a trusted brand name.

"Within the Ansell brand, there are a number of different products to suit various consumer wants – all satisfy the basic expectations of contraception and sexually transmitted infection prevention," Mr Groskorth said. "Having a reasonable range of products is key to satisfying consumers, and keeping convenience as a destination for condoms."

Ansell has also seen convenience retailers benefit from the introduction of larger pack sizes. It says that consumers will generally prefer to buy 'a pack of condoms' regardless of the size.

"By stocking larger sizes, consumer will increase their basket value and still get a better deal on the price per condom," Mr Groskorth said. "Retailers can benefit from stocking value-add products that encourage consumers to trade-up."

SCA Hygiene Australasia produces a wide range of feminine hygiene and incontinence products under the Libra brand. Kate Pollard, SCA Category Development Analyst - Personal Care, says while pads and tampons are not generally considered impulse items there are things that C&I retailers can do to increase sales.

"Bin displays and hang-sell units for off-location displays draw shoppers to our brand through an attractive price point or in a location they wouldn't usually find our products," she said. "Feminine hygiene and incontinence products are generally not considered an impulse purchase as most women plan to have these products on them or at home, but if they are to run out and an emergency purchase is required then they will generally purchase their normal-sized pack because they will require these for use shortly anyway."

She says that packaging is key in feminine hygiene because it helps with pack recognition and because it adds a positive element to an otherwise grudge purchase.

"This is particularly evident in tampons, where consumers are likely to form brand choice based on the appeal of the design on the tampon box, that is the inner packaging," she said. "For this reason, we allow clear packaging in some parts to provide a hint of the pattern within."

It seems then that the C&I retailer has to be prepared to cater to both the impulse and top-up shopper in the personal care product category. It is an area which definitely requires significant thought and planning but the high margins available and the comparatively high price points can also make it a significantly rewarding one.

* ALWAYS READ THE LABEL. Use only as directed. For the temporary relief of pain and fever. Incorrect use could be harmful. Consult your healthcare professional if symptoms persist. Panadol® and Caplets® are registered trade marks of the GlaxoSmithKline group of companies.