Cultivating the C-store HBC Habit

NATIONAL REPORT — Health and beauty care (HBC) has newfound respect in the convenience channel. Once overlooked, the category has garnered more attention since the onset of the COVID-19 pandemic, which has led consumers to look at c-stores differently.  

“When c-stores were deemed as essential businesses during the pandemic, they were often some of the only places for consumers to turn to meet their everyday needs,” said Michelle Ridder, director of category management for Lil’ Drug Store Products Inc., based in Cedar Rapids, Iowa. “Now that consumers know [health and beauty care] can be found in c-stores, we believe some will keep this habit.”

The initial hook was need-based products, according to Katherine Policelli, business analyst with Cadent Consulting Group, based in Wilton, Conn. Consumers who have a need and require an immediate solution, such as an OTC medication, skin care product or shampoo, are the logical target for c-store HBC, she told Convenience Store News. “These products offer the best opportunity to increase category margin for c-stores.”

Average sales per store of HBC were up 4.2 percent in 2020, compared to 1.3 percent category growth in 2019, according to the latest Convenience Store News Industry Report. The HBC segments with the largest c-store sales growth included grooming aids, vitamins/supplements, and cough/cold remedies.

But that only tells part of the story, especially now that convenience retailers have embraced more widespread HBC category trends. And industry experts have ideas for how they can build on the recent momentum and keep the sales growth going.

Performers With Staying Power

HBC items with staying power include both core and non-traditional segments.

First off, there’s been an “increased reliance on the basic, core HBC items,” according to Policelli. Cadent Consulting gives high marks to key areas such as analgesics, lip balm, antacids, cough/cold medications, and family planning.

“Some of these are just an impulse purchase/basket builder, such as lip balm, and some can be very price-competitive, such as family planning items, but still offer a significant margin trade-up,” the analyst explained.

Ridder noted that allergy-related sales continue to see double-digit growth as consumers “are more proactively treating allergy symptoms to avoid the stigma of coughing or sneezing in public during the pandemic.”

Additionally, category experts say these trends and product attributes should be on the radar of convenience store retailers if they’re serious about boosting HBC sales:

• Personal protective equipment (PPE)
• At-home test kits
• Immune health
• Long-term wellness
• Self-care & home self-care
• Relaxation aids
• Digestive support
• Localized beauty care
• CBD-infused tinctures & balms
• Essential oils
• OTC basics
• Sun care as skin care
• Better-for-you

While convenience stores are not drugstores, they are learning to portray a more reputable image in OTC medications and other health-related items. This can be helped along by stocking both a leading brand in each segment and a private label offering, according to Policelli. This approach offers a range of quality and value, covering the spectrum for most health-oriented categories, she said, adding that this “one plus one” strategy is especially important in more rural environments where c-stores often become the local one-stop shop.

Lil’ Drug Store Products’ Ridder agrees that c-stores should offer the best-selling HBC items in a variety of sizes and prices, as well as private label where it makes sense.

She also pointed out that with COVID-19 variants very much a concern these days, maintaining in-store pandemic safety precautions and touting them to customers is another way c-stores can better compete with the drugstore channel. 

As far as in-store placement goes, Jim Beghtol, senior category manager for Lil’ Drug Store Products, believes HBC belongs in a centralized location, but also in secondary locations that feature consumer values and new-item launches. “This will continue to drive category awareness and profits,” he said.

Moving forward, Beghtol encourages c-stores to embrace “the new normal” and expect many of the new habits created during the pandemic to stay post-crisis.

The key point to remember is that c-store consumers have become a captive HBC audience — and they’re not likely to retreat if retailers keep up the momentum. 

The Best Care for the HBC Category

Industry experts offer these final tips for c-stores to garner more HBC sales:

• Increase awareness. Let consumers know HBC is “in the house” through signage, promotions, loyalty and placement. Understand and convey a heightened interest in health, driven by the pandemic.
• Be well-rounded. Carry the best-selling HBC SKUs in immediate consumption sizes, and allow customers to trade up to larger-size SKUs to increase market basket. Offer private label SKUs where it makes sense.
• Manage the category. Assign an HBC category manager at the retail level to work with supplier category managers to ensure the best products are included in sets. Utilize vendors for category insights.
• Sprinkle in relevant terminology. Create a wellness destination section, planogram or endcap in the store. Use loyalty programs to bolster “Wellness” and “Better-for-You” offers.
• Manage the message. Category messaging in-store, on social media, at the pump, etc., should be simple and educational without making any health claims.
• Embrace the new normal. Yes, there’s been increased reliance on basic, core HBC items, such as analgesics, antacids, cough/cold, and lip balm. But there’s also a greater understanding now that some HBC “fads” are proving to be modern solutions to classic problems. Offer both sides of the spectrum.