Insights for Retailers

Health & beauty goes top

GlobalData research shows that Health and Beauty is now retail’s fastest growing sector. Add to that the consumer drive for sustainability and naturalness, and health stores can put themselves in pole position.

The analyst says the sector is set to grow by 16.5% until 2023. Meanwhile another data company, Statista, found that the market value for beauty and personal care reached around £14.7bn in 2019 and is likely to grow by over £15bn next year.

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Pet nutrition to grow as animal feed gets healthier

Pet nutrition is expected to expand globally at a compound annual growth rate (CAGR) of 5.5% over the next six years, according to market analyst Frost & Sullivan.

Increased awareness among pet owners about the health of their pets is one reason why the total market for animal and pet nutrition ingredients is expected to grow from $16.6m in 2018 to reach $24.2m by 2025.

“The practice of supplementing diets with additives such as vitamins, amino acids, organic acids, enzymes, and probiotics is expected to intensify,” says Smriti Sharma, industry analyst at Frost & Sullivan.

Overcoming the hassle of click-and-collect

Two out of five shoppers say they would visit the high street more often if click-and-collect was improved, according to technology consultancy Fluent Commerce.

Despite converse data showing that some consumers find click-and-collect is “too much hassle”, Fluent’s Rob Shaw believes it provides an opportunity for retailers to compete in today’s hostile environment for high street shops.

“By optimising click-and-collect, retailers will benefit from additional revenue brought by those collecting goods who might then purchase additional items in-store,” he says.

UK consumers switch on to CBD

Well over half of UK consumers who have taken CBD-based products are likely to use them again. New research of 4,451 Internet users by GlobalWebIndex reveals 58% would come back for more.

Meanwhile, 68% found CBD products to be effective in alleviating symptoms of physical pain, such as cramps and muscle soreness, as well as mental health conditions including anxiety and depression. In the US, this figure rises by 16 percentage points.

Virna Sekuj, Strategic Insights Manager at GlobalWebIndex, comments: “Interestingly, UK consumers appear to be in a more experimental phase of trying CBD oil in various forms. While CBD is taken primarily via oral supplements in the US (45%), in the UK, 35% have consumed CBD in chocolate and 32% have inhaled CBD through a vape pen.”

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Caring consumers look for ethical certification

British consumers are increasingly eating with a conscience as the latest research from Mintel reveals that last year the nation spent £8.2bn on ethical food and drink. Over the past five years, sales of ethical produce – especially products certified organic, Fairtrade, Rainforest Alliance and Marine Stewardship Council (MSC) – have shot up by 43% from £5.7bn in 2013.

Mintel forecasts sales will increase a further 4% to reach £8.6bn this year and by 17% to reach £9.6bn by 2023. Today, 83% of UK adults say they have bought food/drink with ethical certification with those most likely to buy ethically-certified food/drink aged over 55 (87%).

But while ethical food and drink is growing in popularity, Mintel reveals that cost is a significant barrier, as seven in ten UK adults say that eating sustainably/ethically is harder when money is tight. Confusion is having an impact too, as 60% of UK adults say it’s difficult to understand the differences between the various sustainable/ethical schemes.

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Bank spells out its vision for healthier farming

Modern farming systems, currently dominant in western economies, have serious negative consequences. They cause severe soil degradation – over 50% of global arable land is degraded.

Biodiversity loss is a major issue as indicated by the 75% decline in flying insects over the past three decades, according to research conducted in Germany. Water depletion occurs with agriculture accounting for 70% of global freshwater withdrawals.

And farming has high greenhouse gas (GHG) emissions where between 20-30% of global GHG emissions are related to agriculture. This is because modern farming systems depend heavily on synthetic inputs, adopt limited diversity, produce for global markets and have a high weighting towards livestock.

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Health stores handed a role in Social Prescribing project

The NHS frontline is changing with GPs under increasing pressure to cope with daily demands on their time. People are living longer and as they get older are developing long-term health conditions. Their health is affected by a wide range of factors including employment, housing, debt, social isolation and culture.

These factors are not amenable to traditional health interventions. The NHS England Five Year Forward View calls for a radical upgrade in prevention and public health, and greater engagement with people and communities to harness the energy and potential they have.

In June, the Health Food Institute invited Dr Michael Dixon, Chair of the College of Medicine and personal physician to Prince Charles, to present the opportunities presented by “Social Prescribing”, a national project which he also heads.

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Getting tangible results from in-store promotions

The high value of retailer support programmes is revealed in figures from a leading VMS supplier. Loyalty cards and staff training combined with striking POS are returning some startling figures in UK independents.

Solgar reports that stores implementing its Gold Card loyalty card programme are seeing an average 20% increase in sales, while its ‘staff recommends’ scheme has shown a huge 36% increase in one store. Stores engaging with the Solgar Academy, which provides specific training on product sectors, are seeing similar results across the board.

This emphasis on training enables staff to identify opportunities and make recommendations that heighten the shopping experience as well as increase sales and cash margin.

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How to improve on the 7% spike in organic sales we saw last September

In 2018, retailers, consumers and businesses got involved with demonstrations, talks, sales offers and social media during Organic September. More than 200 independent retailers took part in Organic September Saturday. This all led to a 7% spike in sales of organic during that month.

The Soil Association has announced plans to beat that figure this year and show consumers the positive impact organic can have on the planet.

From the food we eat, to the beauty products we use and the clothes we wear, going organic has a positive impact on our planet. We’re in a climate emergency and this Organic September will show how choosing organic is a simple but powerful form of direct action:

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Flagging Brits know what they need

Market research by UK oatcake producer Nairn’s has revealed that although many Brits are suffering from a bad case of lethargy, most of them know what to do about it.

Data researched in June has found that we are most energised at 11am but by 2pm, just three hours later, we’re already flagging. What’s more, people don’t have enough energy to get through the day at least three times a week.

Nairn’s asked respondents what they thought they should do about it. Four-fifths (80%) believe taking better care of themselves would lead to feeling more energised. But a conundrum arose from the next question: almost three-quarters (71%) admit they would be more likely to challenge themselves to do more physical activity if they didn’t feel so lethargic!

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Where does the snacking market go from here?

Less sugar, more protein and an expectation for healthier/more natural products are a major influence on snack and food-to-go choices. So is demand for flavour innovation and new packaging formats. Products that embrace all these attributes are performing particularly well – these are the key points in a white paper by brand design agency Brandality.

In the cereal bar category, now a key feature of any snacking/impulse fixture, the most successful brands play to their strengths such as no added sugars, lots of natural/plant proteins and minimally processed.

Kantar Worldpanel puts the healthy snack bar market, including cereal bars, at approximately £365m, with more than half a million more shoppers buying into the category and a household penetration of 61%. Last year, Nielsen reported that 40% of consumers say they would expect to pay more for a premium, healthy and functional snack.

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Crystal clear – beauty consumers are switching to new age philosophies

Market analyst Mintel, normally preoccupied with FMCG shopping trends, says consumers are turning to crystal healing as part of their beauty regime.

Brands are exploring the spiritual properties of crystal healing to create beauty products with emotional benefits, says beauty specialist Irina Ene, creating self-care rituals that elevate topical treatments to overall wellbeing boosters.

“Despite a lack of scientific backing, new-age philosophies are gaining momentum in an environment where consumer interest in emotional and spiritual self-care is closely linked to physical and mental health and overall wellness,” she reports. “Following centuries of Eastern tradition, healing crystals and energy cleansing have become popular methods of promoting emotional health.

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Plastic packaging – are you ahead of the supermarkets?

It’s probably not hard for independent health stores to lead the way in reducing plastic packaging and waste, but thanks to a Which? campaign the supermarkets may be forced to up their game and make recycling easier for all.

Almost half of packaging used by major UK supermarket chains cannot be easily recycled, an investigation by the consumer champion found. In your own audit as an independent, ethical retailer, how does your store compare with these findings following the Which? investigation?

Which? analysed the packaging of a typical household shop of 46 of the most popular items from Aldi, Asda, Co-op, Iceland, Lidl, M&S, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose. Researchers broke down each item’s packaging into its component parts and assessed whether each piece could be easily recycled.

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What consumers want retailers to do about climate change

Almost 80% of UK consumers think that retailers are not doing enough to address issues around sustainability and climate change, according to GlobalData.

The data and analytics company’s latest report, UK Sustainability 2019, reveals that those who are most likely to purchase more frequently are often more engaged with sustainability and ethics, as many consumers wish to pass the responsibility on to retailers.

However, these young individuals may be the ones who are less able to make changes due to the often higher price points associated with sustainable and/or ethical products. Price is an important factor that many consumers are not willing to compromise on and a barrier to making more sustainable choices, says the report.

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‘Digital natives’ value brick-and-mortar stores more than their parents

Despite clear differences in expectations among shoppers of different generations, almost half of retailers (44%) have made no progress in tailoring the in-store shopping experience, according to a study conducted by Oracle NetSuite, Wakefield Research and The Retail Doctor.

The global study of 1,200 consumers and 400 retail executives in the US, UK and Australia found big differences in generational expectations across baby boomers, Gen X, millennials and Gen Z.

“We have seen decades of diminishing experiences in brick and mortar stores, and the differences identified in these results point to its impact on consumers over the years,” said Bob Phibbs, CEO of The Retail Doctor. “Retailers have fallen behind in offering in-store experiences that balance personalisation and customer service but there’s an opportunity to take the reins back. The expectation from consumers is clear and it’s up to retailers to offer engaging and customised experiences that will cater to shoppers across a diverse group of generations.”

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Search for Britain’s Best Small Shop of 2019 gets underway

The annual search to find Britain’s Best Small Shop, a competition managed by the Independent Retailers Confederation (IRC), has begun with a focus on consumer engagement and how independent retailers promote all that is special about their businesses to the local community and consumers at large.

Celebrating personal commitment, innovation and community engagement, the Best Small Shops competition recognises the contribution of independent retailers on the UK’s high streets and shopping parades. The 2018 competition had “by far the biggest impact of anything we have been involved in before”, said 2018 winner, Rosamund de la Hey of The Mainstreet Trading Company.

The competition is open to any UK independent retailer selling goods or services to the public. It closes in early September and a shortlist of the most impressive applicants will be invited to attend the competition reception at the Houses of Parliament in November, where they will have the opportunity to meet with MPs, trade representatives and other shortlisted retailers, before the winner and runners-up are announced.

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