With so much advancement in natural and organic personal care, it’s no surprise that this emerging industry continues to thrive. Mounting awareness of harmful chemicals in conventional products is driving consumers and retailers to demand better, safer personal care. These pleas have even caught lawmakers’ attention, as Congress last year held the first hearing on cosmetics safety in more than three decades and is now considering the Safe Cosmetics and Personal Care Act of 2013, which would require more safety measures and transparency.

Regardless of legislation, natural and organic likely will continue to influence the entire personal care industry. As more consumers shunned conventional products and more efficacious nontoxic options hit the market, natural and organic personal care experienced 9.8 percent growth in 2012—the largest increase since 2007—and now reaches $9.6 billion in sales, according to NFM’s 2013 Market Overview Survey.

“It’s very clear that consumers are getting more savvy and knowing what to look for in terms of safer and organic ingredients,” says Jessica Walden, technical specialist for Quality Assurance International (QAI), a certifying agency that leads natural and organic personal care efforts. “The green sector in personal care seems to be one of the fastest-growing [personal care] markets.”

But this growth also can cause growing pains for natural retailers. Stores that have long stocked better-for-you personal care products now must compete with conventional retailers that have begun allotting more shelf space to natural, nontoxic alternatives.

Click here to get the complete 2013 Market Overview with all of the charts and data included.

So how can natural retailers give their health and beauty aid departments a competitive advantage? Category management—including product selection, merchandising and education—is key to maintaining a successful department, capitalizing on emerging trends and ultimately competing with conventional stores, says Lauren Bartel, wellness manager of Mississippi Market Natural Foods Co-op in St. Paul, Minn.

“We need to share with our customers exactly what makes our products different,” Bartel says. “Perhaps it’s that a hair care line is not only salon quality but is also certified organic. Or maybe it’s discussing the positive impact a company has had through fair trade in addition to how great its lotion is. We aim to provide the full package and explain the benefits.”  This approach is working for Mississippi Market. The newer of its two locations, now in its fourth year, is experiencing 20 percent health and beauty growth.

Stand out with product selection

Mississippi Market’s original location, which opened in 1979, also saw success over the past year thanks to a major category management project in the HABA section led by Bartel. Making room for “fresh, new products,” she phased out slow sellers and focused on categories such as skin care showing the strongest growth. 

According to Nutrition Business Journal, natural skin care was once again the biggest dollar contributor to natural and organic personal care sales in 2012, bringing in $3.7 billion (followed by hair care and bath and soap products). Categories notching the greatest growth were cosmetics, hair care, fragrances, and bath and soap products. Essential oils, still somewhat exclusive to natural retail, and baby care products, which have major potential to snag crossover consumers, are two more areas in which natural retailers can stand out from the competition.

Click here to get the complete 2013 Market Overview with all of the charts and data included.

“As retailers, we need to be open to new lines and trends and pay close attention to what our customers are looking for now,” Bartel says. Such efforts include gathering data on product performance, both storewide and regionally, and tracking customer requests, which can indicate where gaps exist.

In addition to focusing on top product categories, natural retailers are paying close attention to ingredients. Strict ingredient policies such as those of Whole Foods Market and Natural Grocers by Vitamin Cottage, which prevent allergens and potential carcinogens from landing on shelves, earn consumer trust by ensuring product purity. And stocking items that use research-backed ingredients may help convince customers that the products will work and they should give them a whirl. “We look to clinical trials or research, testing of ingredients and final products,” Bartel says.  

Finally, offering a range of prices within the HABA department can help natural retailers compete with low-cost products sold at drug stores as well as higher-priced items from salons, spas and department stores. “Remember, 80 percent of the department sales will come from 20 percent of the product selection,” says Cheryl Bottger, former HABA merchandiser for Nature’s Fresh NW in Portland, Ore. “Within that 20 percent, you need a variety of price points to meet different consumers’ needs.” 

Appeal with merchandising

High-priced HABA products might be the toughest for natural retailers to sell, since many customers aren’t used to purchasing these items at health food or grocery stores. Still, top-dollar goods present a significant opportunity because your shoppers, in general, may be willing to pay more for quality. Facilitating a unique, satisfying shopping experience in the wellness department can only help push purchases.

Click here to get the complete 2013 Market Overview with all of the charts and data included.

“Category management and creative merchandising are the keys to building sales, no matter the department size,” Bottger says. “Stocking what is new and on-trend will keep the department fresh and grow sales.” She recommends creative endcaps, color blocking and cross-merchandising—such as integrating topical beauty products with supplements—to lure more customers into the department.

Even if you’re not growing your department in size or adding more SKUs, effective merchandising means maximizing exposure of existing products. “We widened the aisle, decreased the size of the wellness counter to add more shelving, and increased shelf height,” Bartel says of Mississippi Market’s category management project. The result: a more comfortable, boutique-like appearance that differentiated the wellness department from the rest of the store and helped bring dwindling sales back up to double digits in 2012. She says the most important move was to allocate ample shelf space to “emotional” products such as skin care. “Picking out the perfect day cream for your skin type is a different process than finding a vitamin D supplement,” Bartel says.

Educate to build loyalty 

No doubt, more consumers are purchasing natural and organic personal care. But your educational efforts can determine whether they buy these products from your store or somewhere else. “The more we showcase and teach the value and effectiveness of natural ingredients, the more customers we bring into the market and keep there,” says Renee Southard, owner of Organic Marketplace in Gastonia, N.C.

Education starts with employees, says Bottger, who recommends that owners and department managers educate staff about ingredients on a weekly basis. “Learn two ingredients a week, and you will know 100 in a year’s time,” she says. When it comes to conveying this information to consumers, focus mostly on various ingredients’ benefits, Bottger advises. In-store demos and partnerships with aestheticians are great ways to show that products can meet customers’ specific needs.

Click here to get the complete 2013 Market Overview with all of the charts and data included.

In addition to explaining ingredients and benefits, offer consumers clarity about labels and certifications. A key one to focus on is organic. In 2012, sales of products containing 70 percent or more organic content grew 23 percent and brought in $40 million in natural stores, according to SPINS. In the conventional market, they grew 60 percent to hit $72 million.

To capitalize on this booming category, natural retailers should communicate the meaning of USDA Organic and NSF/ANSI 305 certifications. Developed specifically for personal care, NSF/ANSI requires 70 percent organic content but allows some processes prohibited under USDA Organic certification—a food standard. Now appearing on more than 300 products, many with complex, sophisticated formulations, this sealhas potential to convince customers of both purity and efficacy—that is, if they recognize and understand the seal. Communicating these messages requires collaboration between certifiers, retailers and vendors, according to QAI’s Walden. “It’s a ripple-down effect,” she says. “We work with our manufacturers—provide them with educational materials so they can bring those to their retailers and they can then educate the consumers.” 

For a complete list of personal care labels, including NSF/ANSI 305, and what they mean go to newhope360.com/beauty/guide-personal-care-labels