Natural and specialty retailers were always the most popular places for consumers to buy supplements, but that’s not necessarily true anymore. Nowadays, most conventional grocers, drugstores, big-box stores and club retailers boast expanded supplement selections and discounted prices that many shoppers just can’t resist. Meanwhile, Amazon and direct-to-consumer brands dazzle with convenience, cost savings and other perks to steal even more supplement sales away from natural brick-and-mortar.
As a result, Nutrition Business Journal predicts that this year, for the first time ever, the mass-market channel will eclipse natural in total U.S. supplement sales. Then in 2025, e-commerce will blow past both natural and mass to become the dominant sales channel.
Given the shifting dynamics, what’s an independent natural products retailer to do? How can a store retain supplement shoppers and possibly even win some market share back? We called in an A team to offer nine smart strategies.
Consultant
Greg Horn, president and CEO of Specialty Nutrition Consulting and managing director at William Hood and Co.
Dissect, then counteract, market-share losses. If I were a natural or specialty retailer today, I’d really ask, why am I losing market share? Why now, at a time when shoppers are returning to retail and well-documented, highly efficacious products are so popular? I’d probably find that I’m losing on price to the mass market and losing on storytelling to skilled direct marketers—and there’s a lot to learn there. Study the reasons why people are migrating to other channels, then craft a well-researched set of countermeasures to try to change that tide, such as better service, storytelling or merchandising—or a more specialized product assortment.
Seek out natural allies. You won’t be able to stem market share losses and regain share all by yourself. There are several million-dollar-plus supplement brands that haven’t fully migrated to the mass market, so look to them as natural allies. Brands such as Garden of Life, Gaia Herbs, MegaFood, Solaray or New Chapter all have scale yet remain mostly in the natural channel. These types of companies can help with marketing and driving traffic to your store. For example, when I was with The Vitamin Shoppe, we had great success with Garden of Life, which represented a big portion of our business.
Embrace experimentation. In the highly disciplined world of big-box retailing, a Walmart, Costco or Sam’s Club has such high-volume requirements to justify their floor space that they really can’t afford to be experimental. But if you have a smaller-format store or several smaller stores, you should almost only be experimental in the early stages of things. You can test anything in a limited market, measure the results right away, pour more money and inventory into what’s working and abandon what isn’t. While you might think you know what’s going to happen, sometimes the consumer surprises you, so I’m a big fan of doing lots of experiments.
Wellness Category Manager
Lauren Bartel, wellness category manager at the Independent Natural Food Retailers Association in St. Paul, Minnesota
Expand on mass trends to serve crossover shoppers. Mass/conventional has been taking market share from natural independents for years, especially in grocery, so to see this happen in the supplement arena isn’t surprising. A useful approach is to extract actionable information from the trends in mass while maintaining our differentiators as independents. For example, notice that more space allocation and off-shelf displays are going to gummies and powders versus capsules and tablets, then meet crossover shoppers’ needs by offering alternative delivery formats in trending categories. And when bringing in those items, seek out trusted, excellent-quality brands with certifications like organic, non-GMO, Regenerative Organic Certified and fair trade.
Level up storytelling. E-commerce brands can be tricky to compete with. They tend to be very good storytellers and offer subscription programs. But brick-and-mortar can compete with education, personalization and customer service. Use storytelling to your advantage. Talk about how much local product you source or your vetting process for selecting the items on your shelves, or hang “staff picks” to help shoppers connect with your team.
Nurture new supplement users. With e-commerce brands looking to launch in brick-and-mortar, I sometimes notice a lack of certifications, somewhat generic formulations and high price points. So, while retailers will want to consider whether an e-commerce brand brings something new to the table, also appreciate that these brands are doing the hard work of bringing new folks into the world of supplements. Helping a new customer create a supplement routine or interest in natural health is a huge step—and it’s one that you can build on when that shopper visits your store. Remember the categories and product types that are most accessible and least scary to the new-to-wellness shopper and create endcaps and promotions with that in mind.
Retailer
Ramona Billingslea, marketing manager at Betsy’s Health Foods in Spring, Texas
Prioritize private label. We strongly feel we would not be in business today had we not made some big shifts in how we do business. One was our decision to really support the growth of our store brand, Betsy’s Basics. To do this, we let our employees buy it at cost, giving them valuable experience with the products to help them get enthusiastic about our brand. We also have an app and send customers emails to highlight products and give extra discounts to those who show us the app or email at checkout. And every month we pick two Betsy’s Basics products to highlight and put on super sale, usually our popular products to give more customers an opportunity to save.
Price strategically. Since we discount all the supplements we sell, we have to pay attention to little details. And now that we’ve grown our store brand to such popularity, we must work harder than ever to stay on top of pricing. Whenever we offer a private-label product that’s similar to a name-brand item, we strive to match or even beat the name-brand price. For example, we have our vitamin K2 120 mcg and ubiquinol 50 mg priced so low that we consider these (everyday low pricing) items for which we don’t apply any coupons. We’ve also price-slashed our multivitamins to encourage customers to try them, and we offer a higher percentage off on our probiotics every day.
Shore up e-commerce offerings. As a small family business, our main emphasis is providing the best in knowledgeable customer service for our local customers. Still, if we hadn’t shifted to some omnichannel retailing, we wouldn’t get as many return customers as we’ve managed to keep. Fortunately, we got our store online before Covid hit, so we could serve customers who could no longer come in. We see our online store as an extension of our brick-and-mortar location. Customers come in so we can help them find the supplements that meet their needs, and then they can go online to reorder.
