GMDC Identifies Retail Transformation Opportunities Through In-Store
GMDC Releases Latest Retail Industry Research
COLORADO SPRINGS, Colo. – June 6, 2018 – Leading retail industry trade association Global Market Development Center (GMDC) has released its latest health and wellness retail drivers research report, which identifies a top opportunity for industry transformation: supporting consumers’ health and wellness goals by providing in-store expert advice and authentic shopping experiences.
It is commonly accepted within the industry that brick-and-mortar retailers are facing challenges due to online competition. 95 percent of all products sold on Amazon consist of non-food merchandise, which largely comprise the highest profit margin items in stores. With local retailers experiencing these losses directly in volume and profit, GMDC predicts some merchandise categories will completely leave physical retail by 2025.
However, in its latest research, GMDC has uncovered one key area where consumers are continuing to return to brick-and-mortar retailers: health and wellness products. Shoppers are seeking authentic in-store experiences, enhanced services and personalized expert advice focused on products supporting healthy lifestyles.
Another key finding from GMDC’s research supports this trend – consumers’ growing distrust in the U.S. healthcare system. Only 53 percent of U.S. citizens report trusting in the healthcare system, which has dropped 9 percent in only one year. Consumers are increasingly seeking local retailers to fill this void by helping them to live healthy lifestyles. In fact, nine in 10 consumers report a desire for retailers to be more involved in their personal wellness.
GMDC suggests brick-and-mortar stores align their services with this opportunity to play a key role as healthy-living experts. GMDC states this transformation can help retailers differentiate and grow in the face of shifting retail competition by engaging with customers, providing personalized recommendations and building trust with shoppers. In turn, physical retailers should expect to increase loyalty with customers, re-build baskets and improve profits.
“Consumers continue to gravitate toward online shopping for convenience reasons,” said Mark Mechelse, GMDC’s vice president of insights & communications. “However, trading partners’ ability to convert, educate and have meaningful self-care conversations can only happen in the physical store. Selecting the right supplier who has a relentless focus on those strategies is essential to win.”
Retailers generally have been more focused on competition and efficiency, detracting from building credibility as healthy-living experts. By catering to the consumer experience and mindset, physical stores hold the opportunity to create high-engagement experiences with shoppers.
GMDC reports that the health, beauty and personal care department has grown the second fastest of any retail department during the last year (second only to the deli) and the third fastest over the last four years (to the deli and produce departments).
In its research, GMDC identifies three categories that are beating total store sales, year over year, and producing the greatest incremental growth. First, analgesics is a leading self-care category when examining overall size and dollar growth. Analgesics is often considered the original self-care category and thus is well aligned with consumer trends driving self-care growth today.
As well, adult incontinence is an often overlooked personal care category that is on-trend with the growth in the aging population and the demand for home health care. GMDC has identified it as the top growth category in the past year for personal care, with strong projected growth through 2020.
The third high-growth category is homeopathic products, an emerging care category that is quickly going mainstream. While this category’s household penetration still has room to build, it is growing twice as quickly as the average category.
To support retailer plans for future growth, GMDC has also identified five categories within the health, beauty and wellness department that are projected for top growth by 2020: cosmeceuticals, weight management, vitamins and supplements, core OTC and adjacent OTC.
“Where retail was yesterday, where it is today, and where it will be tomorrow are all related, but never the same,” said Patrick Spear, president and CEO of GMDC. “When it comes to health and wellness, GMDC is focused on tomorrow: What are your next practices?”
To download the executive summary of the report, please visit https://www.gmdc.org/content-library.
To create cohesive and proven insights in the report, GMDC collaborated with Nielsen, CRN, Kantar Consulting and A.T. Kearney. The partners and supporters whose contributions have made the report possible are Acosta, Crossmark, Hyland’s, Kimberly-Clark, Kantar Retail, Pfizer Consumer Healthcare, and Unilever.