If you believe the online market is where your main competition is, you would be incorrect.
If you believe the online market is where your main competition is, you would be incorrect.According to a recent survey from New Hope Communications, 44 per cent of consumers are shopping in the mass market for their natural health products. This means at the current market share, for every one per cent of our shoppers we lose to the mass market, that translates to $655M in lost sales from traditional health store sales.
Mass is the culprit
It was not long ago that traditional retailers had the majority of the NHP business in the community. According to this survey, 38 per cent of consumers currently buy in natural health stores. It is the mass market who is taking the biggest chunk of the business in our communities, as conventional grocery, drug and big box stores have taken over.
The online market accounts for only four per cent of the entire natural health product (NHP) category and that is expected to rise to five per cent in the next two years. Meanwhile, mail orders account for three per cent; MLM (multi-level marketing) for seven per cent and practitioners account for four per cent of NHP sales.
I understand that for the most part mass sells commodities like fish oil, vitamin D, vitamin C and multis. However, this is the fastest growing category in conventional retail, and mass has really raised itsame. Recently, I read in a grocery magazine how this is becoming a challenge for conventional grocers, as staff must now become health gurus to keep up with the consumer demand for keto, vegan, gluten-free, collagen, etc.
Convenience is “number one”
As mass market stores line their shelves with more of the top sellers, it is only natural that consumers will change their buying habits due to convenience. It is not that they do not like you anymore or appreciate the service given in the past, but convenience is still number one to a consumer.
And online is not convenient, especially to boomers who buy the majority of NHPs. Fourteen per cent or 14 of 100 consumers in your community shop only on price. As the old story goes, ‘They’ll spend $10 on gas to save a dollar.’
I am not yet convinced online is an immediate threat or will ever be a big threat to NHP retailers, but I see mass market as a direct threat, taking aim at the traditional health food store customer in the community, offering identical products, supported with regular promotions and impulse merchandising in-store.
I suggest you need to study how to compete against the mass market retailers. There is a lot of information available but I believe the number one way to compete against the mass market is to position yourself as an advisor!
News, Views and Happenings in the world of Canadian Natural Health.
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