By David Gill
Recession or not, consumers’ desire to look their best will continue to drive sales of personal-care products in 2009.
Comments from manufacturers indicated that the industry is coming off a comparatively robust year in 2008.
“Even though the economy is tough, I’m seeing nationally that our business was up in both units and dollars,” said David Williams, group marketing manager for personal-care and professional products for Panasonic.
Williams added that he expects 2009 to be “more of the same. What we are seeing is almost like two ends of the spectrum. The opening-price-point products are doing well because consumers are cost-conscious. [But] we also see growth at the high end. As long as manufacturers continue to innovate and give people a reason to buy, and not put out me-too products, the high end will remain in demand.”
Other manufacturers believe that the need to care for one’s looks will keep personal-care merchandise at all price points in demand this year. “Hair care is a necessity, not discretionary,” said Amir Abileah, vice president of Epilady. “As far as personal care is concerned, the effect [of the down economy] has not been as strong.”
Abileah also said the level of orders for Epilady products has ramped up since the beginning of this year.
“Retailers weren’t carrying a lot of inventory during the holidays, only what they needed,” he said. “I would assume the items moved off the shelves because now we’re seeing more orders.”
He also believes that this momentum will gather force in the first few months of this year. “Toward the end of the quarter two, we will once again be in a growth mode,” he said. “Toward the end of the year, the stimulus packaged [from the administration of President Barack Obama] and the housing rebound will raise the level of consumer confidence, and we will see a strong holiday season.”
In one sense, a sliding economy such as the one the nation is now experiencing benefits personal-care product sales.
“In a weak environment, women find it more cost-effective to do it themselves rather than go to a salon,” said Robin Linsley, director of marketing for Conair. “For me to get my hair cut in a salon, it costs $100. At retail, straighteners range from $45 to $100, and curling irons range from $20 to $30, and these products can give you professional results.”
Another trend that is helping some manufacturers is the shift by some retailers from private-label merchandise back to branded products. Gerald Rubin, chairman, president and chief executive officer of Helen of Troy, said as much in a Webcast to financial analysts following the company’s release of its third-quarter financial results.
“Several retailers always want to try their own brand of merchandise because they think it’s more profitable for them,” Rubin said, “but little by little, they do come back and buy branded merchandise because they do get new product [and] they get our innovations.”
Rubin added that this trend will hopefully prove to be a positive for Helen of Troy in 2009. “We’re seeing a trend that’s not increasing in non-branded merchandise,” he said, “and we’re seeing several retailers that are coming back to branded merchandise because that’s what customers are buying.”
Nevertheless, Rubin also cautioned that the personal-care industry needs to keep in mind that things are tough for consumers. “We believe that recent credit-market instability, extraordinary stock-market volatility, increases in the unemployment rates and the uncertainty regarding the impact and extent of U.S. government intervention on behalf of the financial-services and automotive sectors has fueled consumer uncertainty,” he said.
The manufacturers feel that the right response to such uncertainty is to continue raising the bar on technology in personal-care products.
“We’re committed to finding the next technology, and our Arc 4 is representative of that,” Williams said. Arc 4 is a trademarked Panasonic shaver with nano-technology blades behind a quadruple arc foil, which enables the shaver to cut whiskers at the root.
Linsley cited Conair’s SS9 steam straightener as an example of how “technology and innovation will always be a predominant factor in the market.” Sold under the Infiniti brand, the SS9 incorporates “all the technology for creating silky, smooth hair,” she said, including steam for conditioning the hair, tourmaline ceramic plates and an ionic generator.
Although the signs for 2009 may be better for the personal-care industry than for other consumer products, manufacturers are uncertain as to whether this will translate to an upbeat mood for the International Home & Housewares Show in March.
For some vendors, the overall economic climate may dampen the mood at the show. “Traffic is going to be smaller due to some of the shakeout at retail,” Williams said. That being said, retailers committed to the personal-care category “will be looking for good news,” he added. “They will look to the manufacturers to give them reason to believe that this year will be better.”
This, too, is where innovation will play a crucial role. “They will be asking, ‘What can you bring to me that I haven’t seen before, that can get consumers motivated,’” Williams said. “It’s up to the manufacturers to get innovations out there to get people excited.”