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Nielsen Digs Deep Into What Matters to Natural Personal-Care Consumers

Expands its Product Insider to include the ability to measure sales of ingredients in personal care to help track what resonates with natural consumers.

The demand for natural personal care has hit new heights, even in beauty. But what consumers care about when buying natural might surprise some marketers.

“Over half of U.S. shoppers, 53 percent, say that the absence of undesirable ingredients is more important than the inclusion of beneficial ones,” explained Andrew Mandzy, who leads Nielsen’s Health and Wellness Growth and Strategy Team.

It is mission critical to understand these shoppers because, Mandzy said, those segmented by consultancy firm NMI as having a lifestyle of health and sustainability grew from 16 percent in 2006 to 22 percent in 2016, a six-point increase in just 10 years.

“Shoppers are more aware of the products they purchase and are turning over packages not just to look at marketing claims, but also to assess the ingredients included in their products,” Mandzy said.

“While the personal-care department saw flat dollar growth compared to last year, ‘natural’ claims grew 9 percent in dollar growth. Personal- care products that include botanical extracts grew 6 percent in dollar sales, and products that are free from artificial colors grew 5 percent,” he elaborated. “When these products were paired with a ‘natural’ label claim, dollar growth was 13 percent and 11 percent, respectively.”

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With interest in natural escalating, Nielsen decided to develop a new way to measure sales of specific ingredients in non-food categories. In conjunction with Label Insight, Nielsen expanded its Product Insider to include the ability to measure sales of ingredients and U.S. government-regulated attributes for categories including personal care. Previously, the yardstick only gauged food and beverage transparency. WWD and Mandzy discussed why this new tool was important and what findings have been so far.

WWD: Why are consumers so interested in ingredients now than before?

Andrew Mandzy: Being healthy isn’t a new trend; however, the way consumers manage their personal health and wellness is distinctly different from recent years. As consumers become more cautious of ingredients like added sugars in the foods they eat and beverages they consume, their growing demand for transparency does not end in the food aisles. Today, consumers are also keen to know if the products they put onto their skin are safe to use, given these products — from lotions and soaps to shampoos and conditioners — get absorbed into our system.

With that in mind, personal-care manufacturers and brands, as well as the retailers that sell these products, are making concerted efforts to better understand the ingredients in their products, how they are performing in store and online and how consumer demand for product transparency in personal care is driving innovation in the market.

WWD: What inspired the expansion to the Nielsen Product Insider?

A.M.: Today’s shoppers are coming to the shelf with an increasingly diverse set of needs and requirements from their products, and each shoppers’ need set is different from the next. Product attributes such as dietary restrictions and allergens are now coupled with concerns about methods of production, ethical standards, environmental impact and corporate wellness positions. The “why behind the buy,” the how’s and what’s of a considered product, are increasingly becoming the primary decision-making criteria that drives consumers’ purchase. This has added an entirely new layer of complexity to how product-makers provide information to consumers, as well as how they package and market their products. And this diversity of needs is not restricted to food and beverage. They also influence non-food products like hair and personal-care items that consumers put in their physical and virtual shopping carts.

This demand and need drew a natural fit between Label Insight and Nielsen to create an enhanced capability in the Nielsen Product Insider solution [which previously only measured ingredient attributes for food and beverage categories]. This expanded ability to measure across non-food categories like personal-care align with many manufacturers in the industry seeking to meet consumers’ growing demand on product transparency across the board.

WWD: How can brands use this information? How can retailers harness it?

A.M.: Brands need to understand their shopper, and what shoppers are looking for in a category. What’s important in one category may not be in another. By gauging performance of products with claims and with ingredients, manufacturers can determine which claims are most relevant to highlight on package.

For example, in health and beauty care, there are $11 billion worth of products that can technically claim “No Artificial Colors” on their packaging based on ingredients, but only 5 percent do. Of those 5 percent of products that do make the claim, their dollar sales grew 22.5 percent compared to only 3.6 percent for those that could make the claim based on ingredients, but do not.

Retailers need to work closely with manufacturers to align the right assortment to meet demand on a local and individual store level.

WWD:  Will the trend continue in your opinion?

A.M.: We’ve seen that more and more shoppers are focusing their lifestyle on health and sustainability, up to 22 percent of U.S. households in 2016, compared to 16 percent in 2006. We expect this to continue, especially in light of how connected consumers are today, with the ability to research ingredient meanings with the click of a button or swipe of a finger. As online shopping continues to grow, personal- and beauty-care products are front and center, generating $1.8 billion and $1.6 billion in online sales in the last year [as of April 29]. And connected online shoppers are voicing their concerns of the products they purchase online. Of heavy social media users, 30 percent thought it was important to engage in social media in order to show support for their favorite companies and brands. They don’t just want to purchase these products, but they are paying attention to the details and want to openly advocate around the brands that are delivering on their needs and desires. Transparency will continue to be a strategic driver of growth across personal-care products for the foreseeable future.