The relationship between health and beauty is getting cozier.
Retailers in the nutrition and vitamin sector, most notably The Vitamin Shoppe and GNC, are stepping up their beauty and personal care assortments to pump more cash out of their body-conscious customers. And beauty and personal care brands are seizing upon these opportunities arising from Americans’ obsession with fitness and diet, as several avenues dedicated to beauty languish.
The outlook and demographics for the U.S. nutritional supplement retail industry are appealing. The Nutrition Business Journal estimates it generated $25.2 billion in sales in 2008 and $26.6 billion in 2009, and projects it will grow at an average rate of 4 percent annually through 2017. The nutritional supplement retail clientele is a loyal group of predominantly affluent 35- to 60-year-olds with concerns about health that are only mounting as they become older.
David Schick, a retail analyst and managing director at Stifel Nicolaus & Co., explained the aging Baby Boomer population, dissatisfaction with traditional health care and a general trend toward healthier living have kept demand strong at nutritional supplement stores even during a period of slack consumption. “It is these demographic and psychographic winds at the back of the industry that mean it will support beauty regimens as well,” he said.
Openings emerged for beauty and personal care brands at The Vitamin Shoppe and GNC, the foremost nutritional supplement specialty retailers, along with new retail concepts. In May, The Vitamin Shoppe launched EcoShoppe, an environmentally focused store that incorporated various natural personal care and beauty brands such as Erbaorganics, Little Twig, Danielle and Co., Caldrea Co. and Clean Well. The retailer went on to test natural bath and beauty sets in 24 doors of The Vitamin Shoppe starting last year.
“Many new brands are now available on our shelves, including some very specialized names, such as Beauty Without Cruelty and Masters Organics,” said The Vitamin Shoppe president and chief merchandising officer Anthony Truesdale in a conference call on the retailer’s fourth-quarter results. “We are encouraged by the initial results and will look to add these segments to more doors in 2010.”
Among the natural bath and brands also being tried by The Vitamin Shoppe are Aubrey Organics, Desert Essence Organics, Dr. Bronner’s, Jason, Reviva, Burt’s Bees, Alba Botanica, Derma e, Kiss My Face and MyChelle Dermaceuticals. In the stores, Holly Bornstein, director of marketing at Clean Well, said, “They have a very edited set. You get the feeling they really selected who they wanted on the shelves. It is not jumbled.”
Already, The Vitamin Shoppe has begun to roll out select bath and beauty brands across its 400-plus units. Skin care brand MyChelle is one that’s headed chainwide. “There is a great connection to the consumer who buys supplements for internal health and someone who is concerned about skin health,” said Kristine Carey, vice president of marketing for MyChelle. “Our launch into Vitamin Shoppe has been exceptionally successful.”
GNC may have closer ties to the beauty industry than The Vitamin Shoppe, however, through president and chief merchandising and marketing officer Beth Kaplan. Kaplan began her career at Procter & Gamble Co. and moved on to become senior executive vice president of marketing and merchandising at Rite Aid before landing at Limited Brands as the executive vice president of Bath & Body Works’ flagships. Kaplan joined GNC, which has more than 4,800 U.S. retail locations, in late 2007 and has been a key architect of a format with broader offerings, which GNC unveiled last September in Pittsburgh’s Ross Park Mall.
Kaplan declined to comment on the GNC bath and body selection, featuring the brands Go Smile, Borba, Mama Mio and TanTowel, introduced at the 3,000-square-foot Pittsburgh flagship at Rose Park. But, in a recent conference call, she said, “We are evolving the GNC in-store experience by testing new store formats and merchandise strategies in an effort to grow store productivity.…Based on initial customer feedback from Ross Park, we are optimistic that this evolution of the GNC shopping experience will allow us to grow market share.”
Executives at Borba and Go Smile are convinced Kaplan has the bona fides to effectively integrate beauty and personal care. “I have all the faith in the world in her ability to execute a new meaningful concept for her customer,” said Leslie Faust, president and chief executive officer of teeth-whitening brand Go Smile. “Basically, it is a well-being concept in terms of looking good from the inside out and adding some products that are specifically beauty/well-being/take-care-of-yourself products.…It made a lot of sense because [GNC’s] customer takes care of himself or herself.”
“It is all about the management and them believing in your philosophy as well as you as a brand owner,” said Scott-Vincent Borba, founder of his namesake nutraceutical and topical skin care brand. “For GNC, Beth showed me what they are doing and what the stores are going to look like. They are gorgeous. It rivals the look and feel of high-end department stores.”
For beauty and personal care brands, these nutritional supplement retailers provide access to a customer base that may not frequent beauty departments elsewhere and that skews more male than typical beauty venues.
“Beauty is a good fit for those shops,” said Wendy Lucas, director of marketing for Desert Essence Organics, which is sold at The Vitamin Shoppe. “We have done well, and we are growing there.”
But there are those taking a wait-and-see approach. Beatrice Fogle, director of sales and marketing at TanTowel, a sunless tanning brand carried by GNC, said she was “pleased” with the brand’s experience at GNC so far. Still, she cautioned, “the test isn’t really complete. You have to go through a couple seasons to see if it works.”
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