Joe B. Natural is doing his weekly grocery shopping in your store. While musing whether it's possible to make a tofu meat loaf as good as mom's, suddenly he remembers: It's his mother's birthday tomorrow. Flustered that he hasn't yet bought a present, he passes an end cap displaying bath sets, candles, incense packs, even scarves and jewelry. He picks up a lavender soap and bath gel set packaged with a loofah and a candle. He's pleased with himself and with your store—dinner and a birthday present all in one shopping trip.
As the holiday season approaches, there will be an increasing number of Joes in your store, looking to combine grocery shopping with gift giving, or perhaps nudged to do so by your signs and displays. Manufacturers are recognizing this and are ramping up their personal care gift-pack selections. Look for everything from foot cream to hand lotion gift sets to appear in holiday catalogs this year.
"These consumers are gift givers, and they're in the stores every week. It's a good opportunity to cash in on the gift business," says Roxanne Quimby, president of Durham, N.C.-based Burt's Bees, which does 60 percent of its sales in gift and specialty stores.
Guys like Joe aren't the only ones buying personal care gift packs. Even the most organized and conscientious gift givers are susceptible to the lure of (and ease of purchasing) a prepackaged present.
"Everyone's looking for more time. Everyone wants a simple solution, a one-stop, grab-and-go gift. They want to buy gifts in a quick, easy, nice, contained manner," says Bill Osterhold, general manager of Maroma, an Alpharetta, Ga.-based incense manufacturer.
Time-strapped shoppers are relying on retailers and manufacturers to do their creative thinking for them. They want gift ideas that look personal but take little or no effort to assemble. Holiday gift sets of health and beauty-care items can be prepackaged in ways that add a personal touch to the most generic soap or bath salt. Look for gifts packaged for athletes and gardeners, for stress relief and aromatherapy, for both genders, and for nearly all ages. And there are gift sets for every scent sensibility, from lavender to citrus to ylang ylang.
"They say, 'I've thought about your needs and I want to give you a gift that reflects that,' " says Christopher Bogush, president of The Good Witch's Brew in Jamestown, Colo.
Department store shoppers and salon and spa devotees are already used to packaged gift sets, frequently given as promotional items. As naturals stores expand their personal care sections, it makes sense to follow the lead of health and beauty retailers and capitalize on the gift set business. But naturals retailers need to learn a few different rules than their health and beauty store counterparts to ensure that personal care gift sets fly off the shelves this holiday season.
Most naturals manufacturers don't expect great profits from personal care gift sets. Instead, the sets are marketing tools. Naturals retailers can adopt the same philosophy, using gift pack displays to lure customers to the health and beauty aisle or to introduce them to new products or manufacturers.
"We put in things that need extra sampling or that are new," says Quimby, who admits Burt's Bees' gift sets "don't really make the margins for profitable products—we charge them to our sampling or trial budget."
Retailers can mark up gift sets the same amount as other personal care products, so profitability isn't a problem. But, points out Kathy Swanson, president of Plainfield, Mass.-based Kathy's Family, "Gift sets are a good way to have a person try more than one of our products. With the economy the way it is, the more products we can get people to try, the better." Pairing a popular item, like bath salts, with a less common product, such as shea butter lotion, allows customers to try new products, free of risk. Most gift sets also combine several full-size SKUs in one package, possibly saving shelf space.
"[Gift sets] drive the business of full-size product sales, and that's good for the retailer," Quimby says.
Customers perceive gift sets as value-added purchases because they combine products at single-item prices in a special package. Retailers usually eat the cost of the packaging rather than mark up products because, as Quimby says, "People aren't really going to pay for packaging. Customers add up the total of the stuff and if it's too expensive, they think, 'I'll just buy something else.'" In fact, Quimby says, "most consumers think if they buy two or three things together, they want it to be actually less" than the cost of the items purchased separately.
Retailers benefit from this value-added packaging and from the penchant of personal care manufacturers to include such items as loofahs, hair clips, pumice stones, sachets, incense holders, music CDs and even tea bags in their gift sets. "Something like a small incense holder is relatively inexpensive for a manufacturer, but it adds such a high value on the consumer end," says Maroma's Osterhold.
Follow Your Impulse
Unlike in spas or department stores, or even online, purchases of gift sets in natural foods stores are frequently impulse buys. After all, shoppers usually don't go to your store to buy gifts. That's why it's key to price personal care gift sets correctly.
"Pricing is very, very sensitive," says Stacey Egide, president of Avalon Natural Products in Petaluma, Calif. "Gifts priced under $20 are no-brainers. If you get over that [price point], you're making people think more—'I'm not sure I want to spend that; I think I'll look a little further.'"
Quimby prefers that Burt's Bees gift products retail for less than $15. "When they get to be more than that, people start really looking at what's inside—they start picking it apart, saying 'I don't want that.' If it's under $15, it's not worth the trouble" to analyze exactly what's in a gift set, she says.
Osterhold believes personal care gift packs priced under $10 are even more attractive, since they can be purchased as "duty" presents for co-workers or neighbors, and can replace traditional hostess gifts such as bottles of wine.
Still, points out Bogush of Good Witch's Brew, "it's real easy to try and second guess your customer base. Some people want to do a $100 gift." Bath sets and gifts that re-create the spa experience can also be priced higher, says Cindy Wong, general manager of Zenses, a Walnut, Calif.-based manufacturer of teas, soaps and bath products. "In a high-end boutique, a spa pack can sell for $40," she says, because at-home relaxation products are still less pricey than a day at the spa.
Presentation is an important factor in appealing to gift givers' impulses. "Colorful and exciting end caps can pull customers into a personal care display. You don't want people to guess whether you have a gift program," Egide says. Quimby says she's seen natural products stores that have end caps that contain everything from candles to scarves and slippers. "They're as nice as gift stores. They visually stimulate people."
Packaging also appeals to impulse purchasers. Quimby points out that natural products merchants have a little more leeway in packaging than do gift store retailers. "Gift store shoppers are more into fancy presentation; natural foods shoppers are more interested in what's [contained] in the packaging," she says.
Still, that doesn't mean you can just stick a bottle of organic shampoo in a paper bag and call it a gift. Many naturals personal care manufacturers opt for two different types of inexpensive, practical but attractive packaging: clear vinyl bags and cardboard boxes.
"Vinyl totes are clean and you can get a good look at the product," Egide says. "It's easy to merchandise because all the product is sitting up." Also, Quimby notes that vinyl bags are reusable, which adds value to the product.
Cardboard boxes allow more room for appealing artwork, says Victoria Palmisano, spokeswoman for EO Products in Corte Madera, Calif. They also are popular with environmentalists because they're frequently made from recycled paper. They stack well, but take up space because at least one box needs to be displayed open so that customers can see the product.
Executives at Bioforce USA, distributors of the Italian personal care gift line L'Erbolario, believe customers would rather choose and package their own gifts. The company sells displays filled with bath and body products, skin and hair care, perfume, and anti-aging creams. Customers make their own gift packs using the boxes, ribbon and tags provided in the display.
Retailers can also make store-label personal care gift packs, says Bogush. "I've seen some merchants that use their own gift wrapping or custom-printed bags with the store logo."
Appropriate vs. Inappropriate SKUs
Certain products lend themselves more to gift sets than others. You're not going to get on anyone's good side by giving them deodorant or mouthwash. Skin care is also a dicey proposition, because people have definite ideas about the type of skin they have and the products necessary to treat it. "If someone gave me a gift of anti-aging cream, I don't know how I'd take it," says Stephanie Smith, account executive at Bioforce USA.
Makeup is another too-personal item, but hair care and body care are OK. Best, though, are the gifts that pamper. "The holiday season can be really stressful, so give the gift of relaxation," says EO's Palmisano. EO makes three "bath therapy" kits that contain lotion, bath salts and bath foam. "People typically don't spend money on that type of thing for themselves," Palmisano says.
Sachets, candles and incense are even less personal and are good choices for people you don't know well. They also have a key component in personal care gift giving: scent. "Whatever you do, you want to make sure the gift smells great," says Avalon's Egide.
Vicky Uhland is a freelance writer based in Denver. Reach her at email@example.com.
Natural Foods Merchandiser volume XXIV/number 10/p. 32, 40, 42