Organic, ‘Clean Label’ Opportunities Emerge in PL Beauty

August 21, 2017

Chain Drug Review | August 21, 2017 –Regardless of education, income level or other demographics, there’s an almost universally held belief among consumers that nature knows best.

Consumers increasingly believe that nature is smarter than man and has already created everything we need for good health. As revealed in Daymon’s recent global study “From Shopper to Advocate: The Power of Participation,” key shopper values and beliefs like this are reshaping the retail landscape — affecting categories, products, retail formats and more.

We’ve already begun to see the impact of this “nature knows best” mentality and similar beliefs in the food retailing space. As shoppers have become more aware of what they put into their bodies, they’ve started pushing back on synthetic substances, genetically modified organisms (GMOs) and other ingredients perceived of as unnatural or unhealthy in some way. That has driven the record-setting growth of organic and “clean label” food sales in the last decade. The organic market alone has risen from less than $20 billion in yearly sales in 2007 to an over-$43-billion market today, according to the Organic Trade Association.

Now that trend is primed and ready to disrupt the beauty and personal care categories as well. As they are empowered to take control of their health when it comes to food, there’s a growing understanding among consumers that what we put on our skin is absorbed into the bloodstream as well.

As a result, more and more consumers are seeking out beauty and personal care products that are made from more natural and organic sources, and that are free from lab-made chemicals, heavy metals and other ingredients they believe are potentially harmful.

Though some natural and organic products already exist in these categories, many are from smaller, niche brands that may not be widely available in local drug stores. At the same time, also according to our study, shoppers are increasingly recognizing the differentiating and experiential features that private brands can offer beyond mere price. This presents a clear opportunity for drug store retailers to develop organic and clean label private brand beauty and personal care offerings to meet their shoppers’ changing needs and expectations.

So what exactly does it mean for a beauty or personal care product to be organic or clean label? For organic products, the best practice is to use the
organic food rules set by the USDA. That restricts what kinds of ingredients you can use, but many manufacturers have successfully demonstrated that it is possible. There are a number of effective and successful certified organic beauty and skin care products on the market today, including brands like Alteya Organics and Nourish Organics. (German brand Provida even has an organic nail polish).

If you follow the food rules, there’s also the benefit of being able to use the USDA Organic seal on your products. That helps boost consumer trust. It shows that there’s a standardized, regulated system under which the product was certified — and essentially, that it’s safe enough to consume, which means it must be safe to use on your skin.

The other most defensible and easiest-to-communicate claim about purity in a beauty or skin care product is “free from.” While it is not a regulated term in commerce like organic, it generally means clearly defining a product or brand by what’s not included.

The top ingredients consumers are typically looking to avoid in these categories include artificial colors, artificial fragrances, aluminum, formaldehyde, lead, phthalates, sodium lauryl/laureth sulfates, titanium dioxide, triclosan and volatile organic compounds (VOCs). Consumers also tend to want to avoid any other ingredients with long chemical-sounding names that are hard to pronounce.

There are a few caveats retailers should be attentive to as they look to develop new brands like these. First, you have to carefully select the right manufacturer with a proven track record of creating functional products. And you need to do panel testing. Nothing will turn off your customers faster than selling a product that doesn’t perform. These products should be as effective, if not more so, than the non-clean or non-organic competition.

The second thing to be careful about is making assumptions about which consumers are interested in these products. It would be a mistake to think, for example, that this isn’t something you should be looking into if you’re a retailer who targets a more rural or lower-income trading area. Across the board, consumers of all demographics tend to share the same health and wellness aspirations. If it satisfies an emotional need, shoppers will find a way to pay that little extra premium for it. This is especially true when they can trust that a product doesn’t contain harmful substances.

Finally, you have to be very mindful about how you merchandise these brands in the store. One of the biggest mistakes a retailer can make — and some are making — is to create a separate section for natural and organic brands away from the main beauty or personal care department. That limits who is going to see those products and how they will be perceived.

The right way to do it is to create clean private brand products that compete across the board with national brands, and to put them right in line with the national brands. This reinforces the idea that these products are mainstream options that are just as good and effective as, if not better than, the national brands consumers may be used to using. It gives the consumer greater choice, and also offers more opportunities for spontaneous trial.

A good example of this is to look at how grocery stores have evolved with their merchandising of organic foods. When these products were first introduced, they were often set aside in their own “natural” or “health food” section. But today they’re alongside all of the other products on the shelf. Organic has become one more signifier, like low-fat or low-sodium, that helps shoppers choose between products.

This is the same approach retailers should be using with organic and free-from beauty and personal care products. Natural and organic is fully understood by the consumer — the need to separate it out is long gone. Such products should be fully integrated into those mainstream areas of the store — front and center, loud and proud. Believe in your brand and shoppers will too.