Private Label Buyer

Soft Sell

December 1, 2007

Soft Sell

With name recognition relatively low on the national brand side, the future looks bright for private label cotton products — but a little extra effort will be needed in packaging and promotion.

The key consumer:
Female shoppers age 22 and up account for the bulk of private label cotton ball and cotton pad sales, while moms are the primary buyers in both the regular and safety cotton swab segments. Of note here is a rather skimpy list of competitors in terms of national brands — making private label one of the only options in some stores. Often it boils down to one reality in the cotton products category: If the consumer trusts the store, then they trust the store brand.
Cotton Balls/Swabs
Sales (in millions) and promotion lift
ACTIVITY PRIVATE LABEL TOTAL CATEGORY
$ Volume$118.9$236.8
% Change vs. Year Ago9.43.6
% Dollars, Any Merchandising33.630.4
% Change vs. Year Ago1.12.8
% Dollars, Display Only18.015.0
% Change vs. Year Ago-0.71.2
% Dollars, Feature Only3.94.9
%Change vs. Year Ago0.50.6
Source: Information Resources Inc., total supermarkets, drugstores and mass merchandisers (excluding Wal-Mart), for 52 weeks ending Nov. 4, 2007.

The private label skeptic:
Consumers who shy away from store brand cotton balls, pads and swabs often are put off by outdated packaging. Too often, such packaging is dull, cluttered or too “medicinal” to appeal to younger shoppers. A push is underway, however, to clean up and brighten up such packaging. Retailers who make an effort here could see an increase in private label “believers,” especially for impulse-type buys.
Outlook, opportunities and strategies:
Recent growth in private label cotton products is impressive. Dollar sales of private label cotton balls and swabs jumped 9.4 percent during the 52 weeks ending Nov. 4, 2007, according to data from Chicago-based Information Resources Inc., while the total category saw only a 3.6 percent rise. Most of the growth is being realized on the premium side of things, with products touting a “softer and stronger” message attracting more attention.
Store brand cotton balls and swabs now account for roughly 50 percent of the category’s sales. But with name recognition relatively low on the national brand side, that share could increase significantly — if you put a little extra effort into the packaging and promotion areas.
That said, make sure your store brand cotton products sport modern, uncluttered packaging that appeals to your target audience. If you’re promising a premium product, then make sure the packaging matches the promise.
Opportunity also exists on the organic side of things. Organic cotton products are beginning to appear on store shelves. The key question here is whether or not the consumer will be willing to pay more for these products.
Because cotton products tend to be more impulse-type purchases, promotions can make a big difference in private label sales. And combined with displays, they can make a huge difference.
Sidekicks are one very effective display option. Display cotton balls and pads near the makeup section, for example, and swabs in both the baby and beauty aisles. End cap displays featuring all segments of private label cotton products also work well.
A little creativity can go far in cross-merchandising. Display cotton pads with fingernail polish remover, for example, or cotton pads with makeup remover.