From cosmetics to disposable raisors, personal care items are increasingly being delivered to consumers’ doorsteps as more online retailers adopt subscription services.
Nearly 40% of US consumers who regularly purchase health and personal care products online say they’re signed up for at least one subscription e-commerce service.
Consumers largely sign up for subscription e-commerce services for the time-saving benefits. And when it comes to products that consumers use regularly — such as those that fall under the health and personal care category — subscription services remove the need of having to make frequent trips to the store.
But besides accommodating consumers’ busy lifestyles, retailers are seeing added benefits: They’re earning more revenue and building customer loyalty. For example, Dollar Shave Club, which uses the subscription model to replenish men’s grooming products, expects revenue for 2015 to top $US140 million, up from $US65 million in 2014.
In an in-depth report, BI Intelligence looks at how retailers like Amazon and Sephora are using subscription-based models to sell and distribute health and personal care products in ways that are more convenient for consumers. We analyse all the factors that drive consumers to shop online for everyday products, and we look at which CPG brands and retailers are the most digitally savvy.
Here are some of the key findings explored in the report:
- Subscription shopping models can help mitigate retailers’ costs and provide an added layer of convenience to customers, and these services are helping the health and personal care category grow. 38% of US consumers who regularly purchase health and beauty products online say they’re signed up for a subscription service.
- Online health and personal care sales volume is expected to grow at a much faster rate than traditional drug stores sales. We forecast that the online health and personal care market will grow at a compound annual growth rate, or CAGR, of 13% between 2015 and 2020.
- There are a number of subcategories within health and personal care, and these have not been disrupted evenly across the board by e-commerce. We expect this to change as retailers tweak their business models.
- The race to win the online health and personal category hasn’t been won yet. While Amazon is the clear leader, a good number of consumers do their online health and personal care shopping on a variety of websites, including buying directly from brands that otherwise would not have a direct channel to consumers.
In full, the report:
Looks at how new e-commerce models, especially subscription services, have helped drive an increase in online shopping in this category
- Looks at how new e-commerce models, especially subscription services, have helped drive an increase in online shopping for health and personal care products
- Sizes the market for online health and personal care sales and growth expectations
- Examines which products categories within the industry have had the most success transitioning consumers to e-commerce purchasing
- Underscores the challenges and opportunities in going after increased online health and personal care online sales
- Identifies where consumers are doing the bulk of their online health and personal care shopping today
To access the full report from BI Intelligence, sign up for a 14-day trial here. Members can sign up to gain access to new in-depth reports, hundreds of charts, as well as daily newsletters on the digital industry.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
Business Insider Emails & Alerts
Site highlights each day to your inbox.