Regaining market share for a high-value hair wash brand


Regaining market share for a high-value hair wash brand

Beauty secrets: How one beauty brand is preventing sales decline and regaining market share

Many measurement tools in use today were optimized for the shopping environment a decade ago, built to measure in-store performance. But in today’s multichannel environment, with 68% of consumers now omnishoppers, these tools can leave costly blind spots.

Learn how one national beauty manufacturer used modern omnichannel tools to identify the cause of dwindling sales as well as the best strategy to return to growth.

Problem: Finding the true source of leaks

A large national beauty manufacturer was losing in-store sales for its hard value hair wash brand, which we refer to as Brand A. Despite an 89% growth in online sales in the category, Brand A’s performance was declining each year. They needed to answer three key questions:

  • What type of customers were leaving, and where were they shopping instead?
  • Were customers leaving because of the price?
  • Were online sales enough to offset the loss in brick-and-mortar sales?

Most importantly, they needed to understand the underlying reasons for the decline, the pricing that would draw customers back to the brand, and what steps to take to profit from the category’s explosive online growth.

Data from NielsenIQ Omnishopper showed that customers were leaking to premium brands. This was driven by several factors, including:

  • A diversified customer base: Shoppers were increasingly shunning one-size-fits-all products in favor of more personalized hair wash options that addressed specific conditions, such as dandruff or frizz, or specific hair types
  • Category premiumization: High growth in premium and super-premium segments were fueling an increase in category pricing, with super premium brand prices rising an average of 17% in the past year alone
  • Less promotion: A decline in promotional pricing further contributed to higher category pricing

Data showed that even shoppers in the lowest-income spectrum, earning under $25,000 annually, showed a willingness to “treat” themselves in the hair wash category. Omnishopper insights showed Brand A exactly where shoppers had shifted and why so that future strategies could be tailored to these new spending habits and preferences.

Modern channels require modern measurement tools

With Omnishopper insights, Brand A and manufacturers like them can account for shopper mobility. These insights clearly show whether in-store customers have been lost to competitors or merely shifted to shopping online. Companies armed with Omnichannel measurement tools can pinpoint true incremental growth, identifying new customers the business has acquired and granular insights that can be leveraged to attract even more.

While 75% of the shifting of Brand A’s customers was driven by shoppers upgrading to higher-tier products in-store, 25% was driven by shoppers simply changing channels, moving online when purchasing brands in the hard value, value, and mass price tiers. These discoveries provided a clear indication of where resources and time should be prioritized to increase sales.

Omni Use Case Video: How one beauty brand is preventing sales decline and regaining market share

Customer behavior varies by channel

Leveraging channel growth effectively plays a large part in a company’s ability to tap into profitable Omnishopper trends. In the example of Brand A’s hard value hair wash products, the majority of Brand A’s share of wallet came from in-store shoppers. However, the in-store channel was declining: 89% of category growth stemmed from online sales.

Online hair wash shoppers also spent an average of $12 more than in-store customers, presenting a lucrative missed opportunity. Since Brand A had not invested in online distribution channels, it failed to tap into profits from skyrocketing online sales enough to offset its in-store losses.

Key actions to win back shoppers

Based on Omnishopper data, Brand A determined the most important steps to take to reverse its shrinking sales, including:

  • Increasing prices: Since customers were shifting because the price was too low, joining the category trend of premiumization would help attract them back to Brand A.
  • Decreasing online promotions and discounting: Since online shoppers spent more on hair wash than in-store shoppers, promotions would not engage them.
  • Expand online presence through digital distributors: The rapid 89% growth of online spending in the category gave a clear signal that the future was in e-commerce.

In today’s complex environment, it is becoming increasingly important to accurately measure sales, understand consumer behavior, and optimize performance and execution. With tools designed for Omnishopper behavior, CPG manufacturers and retailers can pinpoint the true motivations behind buyer behavior and win against the competition.

Learn more about NielsenIQ Omnishopper here