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Category focus: Banish the babycare blues

Pharmacy is losing its share in the tough babycare market, so how can you boost your sales?

The babycare market is undeniably tough. Hit by a combination of declining prices and the increasing popularity of discounters, it is little wonder that the market was in decline throughout the whole of 2015. And pharmacies took the brunt of this falling value. While overall sales in the market declined by 0.6%*, the decrease was a disappointing 5.4% in pharmacy.

Despite the clear challenges involved, the babycare category is worth investing in. Overall, it is worth £1.47 billion – and pharmacy takes home a £135 million slice of the pie. Here’s how to grow your share by taking into account the strengths, weaknesses, opportunities and threats in the market.s


Strengths: Healthcare 

Pharmacy registered a decline in the majority of the babycare subcategories last year, including nappies, baby milk, baby wipes and toiletries. But there was one clear success story: baby healthcare registered a 9% growth in sales. Considering this subcategory is worth £25m – representing 18.5% of pharmacy’s income – it is certainly not an area to be ignored.

“Healthcare remains a reliable source of respite for the [pharmacy] channel,” says Gareth Gwynne, analyst at Kantar Worldpanel. “Although pharmacies have seen the number of shoppers buying into healthcare fall over the past year, the increased frequency in the market more than offsets this, as shoppers spend more.”

To capitalise on this category, pharmacy needs to play to its natural strength of advice. Numark’s marketing co-ordinator Cathy Crossthwaite points out that some of the best-selling products across its network – Colief, Infacol and gripe water – are readily available from the supermarket. This suggests that parents are visiting pharmacy for advice on how to treat their child, she points out.

“Parents often make pharmacy a first port of call, before their GP, for advice, due to longer opening hours and convenience,” she says.

This puts pharmacies in a “prime position” to secure new customers. “New parents are always keen for advice so they will return if they feel they are being helped,” Ms Crossthwaite stresses.

Weaknesses: Shopper losses

Shopper losses are a “key issue” for the category, says Kantar Worldpanel’s Mr Gwynne. As price-savvy shoppers defect to the “big four” supermarkets, pharmacy is steadily losing its share. Mr Gwynne says sales of wipes and nappies – which fell by 9.3% and 13.1% respectively – have been particularly affected by this trend.

Numark’s Ms Crossthwaite says this is largely down to the “perception that pharmacy is more expensive”. This is particularly true for nappies, she says – pharmacies tend to stock smaller pack sizes for space reasons, rather than the larger value packs. This means parents will rarely see pharmacy as a destination for these items unless it is “a distress purchase”.

Similarly, Ms Crossthwaite says parents shopping regularly for baby food are probably “used to the variety of range held by supermarkets” so may only come to pharmacy for these products as “an emergency or stop-gap”.

There is little pharmacy can do to combat this trend when faced with the buying power and convenience of supermarkets. But don’t give up on these sub-categories altogether. After all, baby food sales increased by 7.9% last year and, despite the overall decline in wipes, Water Wipes broke into the top 10 babycare brands in pharmacy.

 

£1.47 billion

What the babycare market is worth

5.4%

The amount that babycare sales declined by in pharmacies last year

£27m

Amount own brand sakes were worth in pharmacies last year

 

Opportunities: Own-label lines and baby milk

Own-brand products may not seem an obvious opportunity for pharmacy. After all, their sales declined by 4% last year. But, when compared with the 5.8% fall in branded sales, their performance takes on a more positive light.

Numark has spotted a movement towards own-label products in its network of pharmacies. “Numark branded paracetamol suspension is the best-selling [product] in our core range, indicating that customers are trusting own brand as much as branded,” says Ms Crossthwaite.

Boots tells a similar story. According to a Boots UK spokeswoman, customers are “more savvy to the fact that often [own-brand] products contain the same ingredients as the propriety brands, at a greater value and still under a name they can trust”.

There is also a hidden opportunity in baby milk. Sales decreased by 18% in pharmacies last year, but grew by 3.3% in the overall market – suggesting the sector could be missing a trick.

Georgina Driver, lead category manager for pharmacy at Danone Nutricia, stresses that milk is an important subcategory. She explains that the subcategory is experiencing “significant growth” driven by “strong performances” in first, follow-on and growing up milks. Ready-to-feed liquid milks – in particular the smaller 200ml formats – are popular due to their convenience, she says.

Ms Driver believes pharmacies have “a unique opportunity” to grow sales and customer loyalty through baby milk. She advocates keeping a “well-stocked range of leading brands” and offering “both powder and liquid formats”.

And baby milk sales can fit in well with pharmacy’s advice role, points out Numark’s Ms Crossthwaite. Symptoms such as colic, reflux, lactose intolerance and constipation may prompt parents to visit their pharmacy for advice – and Ms Crossthwaite says “more is being made” of the specialist formulas to cater for these needs.
 

Threats: The growing role of discounters

It’s not only major supermarkets that are increasing their share of the babycare market – the discounters have clearly made their mark over the past year. Aldi, for one, has registered growth of more than 58%.

Its strong performance has seen it break in to the top 10 babycare brands at number eight and its share of own label is now nearly double that of Boots.

The discounters clearly have the lead on price. What they cannot offer, however, is advice. This may not be deterring consumers at the moment, as even the advice-led category of baby healthcare grew by 12.8% over the past year in the total market. But if pharmacy establishes itself as a destination point for advice, it should be able to fight back in this lucrative category.


* Unless otherwise specified, all quoted data is provided by Kantar Worldpanel; value sales, 52 weeks to January 3, 2016

Expert view
 

Stephen-Andrew Whyte, pharmacist, lead paediatric site practitioner at the Portland Hospital for Women & Children, and owner of the Children’s Clinic in Aberdeen

 
'It is important to be aware of red-flag symptoms'
 

 

If any of the following are observed, the pharmacist should consider calling an ambulance for immediate assistance:

Fever (temperature):

Pale/mottled/ashen/blue skin, lips or tongue

No response to social cues

Does not wake or if roused does not stay awake

Weak, high-pitched or continuous cry

Grunting

Diarrhoea and vomiting:

Has sunken eyes

Has pale or mottled skin

Projectile vomiting

Bilious (green) vomit

Severe or localised abdominal pain

Regurgitation of feeds or “reflux”:

Regurgitation becomes persistently projectile

There is bile stained (green or yellow‑green) vomiting or haematemesis (blood in vomit)

Signs of marked distress, feeding difficulties or faltering growth

There is persistent, frequent regurgitation beyond the first year of life

Cough and cold:

Apnoea (observed or reported)

Severe respiratory distress, eg grunting, marked chest recession, or a respiratory rate of more than 70 breaths/minute

Central cyanosis

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