By Mike Montemarano, Associate Editor10.11.21
At Natural Products Expo East 2021, two retail strategy experts in the nutrition space, Dries Zander, vice president of brand growth solutions for SPINS, and Alex Evans, managing director of LEK Consulting, discussed the importance of tailoring sales strategies based on unique factors at play in a variety of channels: natural, conventional, online, brick-and-mortar, and direct-to-consumer.
The 4Ps
Ultimately, it’s always a good idea to fall back on a “4P” strategy, Zander said, ensuring that the positioning, product, placement, and price are each optimized to appeal to a core of reliable consumers.
“The key differences across e-commerce, natural channels, scaled channels such as grocery and club stores, and convenience stores, are that the consumers populating these different areas show up with different motivations,” Zander said. “In natural retail settings, consumers are more inclined to buy progressive products, and tend to have more adventurous attitudes. Scaled or conventional channels are typically occupied by consumers who go there on a routine-based occasion, with specific needs that they’re trying to fulfill.”
Online Retail: The Space for Growth
Core shoppers in the natural products segment tend to be omnichannel, and while many consider Amazon their preferred shopping platform for buying natural products, it’s important to understand that the bulk of spending takes place in conventional brick-and-mortar retail establishments. Meanwhile, Amazon serves an important role as a trial ground for breakthrough ingredients. “The growth of online retail represents a growing space for condition-specific ingredients and novel products, the open shelf space, so to speak, serves as a great testing ground,” Evans said.
While Amazon is an important outlet for shoppers who have a more intentional attitude in their purchase, impulse and convenience can be more important in conventional shopping scenarios, which means that sales and promotions, especially those geared more toward trial than bulk shopping, can hold more water, Evans said. Core natural shoppers make up just a small portion of the overall VMS consumer base, he added, and one of the peak opportunities for brands in the natural/specialty space is that conventional shoppers represent such a huge pool of supplement consumers to pull from.
Differentiating in Natural & Conventional
In natural channels, consumers are more likely to have a comparable product in mind, which means that key differentiators could include a focus on the appearance and convenience of products, as well as promotions which can drive loyalty. However, conventional channels require natural products companies to focus on diverting shoppers away from conventional foods and products, with less in-competition from natural-positioned competitors.
Conventional channels, on the other hand, are ideal for converting consumers who want to try a natural alternative product for the first time. When it comes to food products, this means comparing performance against many standard products. A plant-based chocolate ice cream, for example, needs to stand out in taste and texture compared to conventional alternatives as opposed to direct competitors, Zander said. Pricing is also more top-of-mind in conventional channel shoppers, meaning that promotions to remove price as a barrier become more important.
The shift to online retail experienced over the past year-plus is exhibiting a crossover effect in conventional and natural shoppers, Evans said. With virtually unlimited shelf space, more progressive, innovative, and niche products can shine compared to a retail experience. Both natural and conventionally-minded consumers rely on deeper research, clinical outcomes, and reviews in order to evaluate unfamiliar products or ingredients. Especially in the mental/cognitive support, beauty, and energy categories, condition-minded consumers are more adventurous and willing to try new things, with less preoccupation with value and sales.
Omnichannel Opportunity
Regardless, “VMS consumers may have preferred channels but none of these channels are exclusive. Spending flows back and forth across channels, and there will always be opportunistic spending and promo-chasing. Brands need to think holistically across different channel paradigms in order to capture spending across all channels,” Evans said.
Mike Montemarano has been the Associate Editor of Nutraceuticals World since February 2020. He can be reached at MMontemarano@RodmanMedia.com.
The 4Ps
Ultimately, it’s always a good idea to fall back on a “4P” strategy, Zander said, ensuring that the positioning, product, placement, and price are each optimized to appeal to a core of reliable consumers.
“The key differences across e-commerce, natural channels, scaled channels such as grocery and club stores, and convenience stores, are that the consumers populating these different areas show up with different motivations,” Zander said. “In natural retail settings, consumers are more inclined to buy progressive products, and tend to have more adventurous attitudes. Scaled or conventional channels are typically occupied by consumers who go there on a routine-based occasion, with specific needs that they’re trying to fulfill.”
Online Retail: The Space for Growth
Core shoppers in the natural products segment tend to be omnichannel, and while many consider Amazon their preferred shopping platform for buying natural products, it’s important to understand that the bulk of spending takes place in conventional brick-and-mortar retail establishments. Meanwhile, Amazon serves an important role as a trial ground for breakthrough ingredients. “The growth of online retail represents a growing space for condition-specific ingredients and novel products, the open shelf space, so to speak, serves as a great testing ground,” Evans said.
While Amazon is an important outlet for shoppers who have a more intentional attitude in their purchase, impulse and convenience can be more important in conventional shopping scenarios, which means that sales and promotions, especially those geared more toward trial than bulk shopping, can hold more water, Evans said. Core natural shoppers make up just a small portion of the overall VMS consumer base, he added, and one of the peak opportunities for brands in the natural/specialty space is that conventional shoppers represent such a huge pool of supplement consumers to pull from.
Differentiating in Natural & Conventional
In natural channels, consumers are more likely to have a comparable product in mind, which means that key differentiators could include a focus on the appearance and convenience of products, as well as promotions which can drive loyalty. However, conventional channels require natural products companies to focus on diverting shoppers away from conventional foods and products, with less in-competition from natural-positioned competitors.
Conventional channels, on the other hand, are ideal for converting consumers who want to try a natural alternative product for the first time. When it comes to food products, this means comparing performance against many standard products. A plant-based chocolate ice cream, for example, needs to stand out in taste and texture compared to conventional alternatives as opposed to direct competitors, Zander said. Pricing is also more top-of-mind in conventional channel shoppers, meaning that promotions to remove price as a barrier become more important.
The shift to online retail experienced over the past year-plus is exhibiting a crossover effect in conventional and natural shoppers, Evans said. With virtually unlimited shelf space, more progressive, innovative, and niche products can shine compared to a retail experience. Both natural and conventionally-minded consumers rely on deeper research, clinical outcomes, and reviews in order to evaluate unfamiliar products or ingredients. Especially in the mental/cognitive support, beauty, and energy categories, condition-minded consumers are more adventurous and willing to try new things, with less preoccupation with value and sales.
Omnichannel Opportunity
Regardless, “VMS consumers may have preferred channels but none of these channels are exclusive. Spending flows back and forth across channels, and there will always be opportunistic spending and promo-chasing. Brands need to think holistically across different channel paradigms in order to capture spending across all channels,” Evans said.
Mike Montemarano has been the Associate Editor of Nutraceuticals World since February 2020. He can be reached at MMontemarano@RodmanMedia.com.
