“My Chihuahua Bites.” Identifying Sleeper Products That Boost Consumer Morale and CPG Sales.
Move over lipstick — here comes nail polish. In the past, industry experts would track the sales of lipstick as an indicator of consumer confidence and willingness to spend. Today, all eyes are on nail polish. It’s a sign of the economic times — low consumer confidence, stagnant job growth, and high food and gas prices have helped make nail polish the beauty product of choice. Polish is now the little pick-me-up purchase-of-choice for consumers who need a little morale boost in the current austere economic climate.
According to a recent article, U.S. nail polish sales from department stores and mass market retailers (excluding Walmart) rose 22 percent to $337 million in the six months preceding June 30. In all of 2010, sales rose 15 percent to $530 million. The same growth trend is occurring in Europe where nail polish sales leapt 29 percent from 2007 to 2010. In compairson, European make-up sales only rose 17 percent.
If a little dash of bright color (and frisky product names like “My Chihuahua Bites”) can boost consumer morale and consumer sales, we have to ask — what other morale-booster products are just waiting for you to notice them? Are there some “sleepers” in your SKU lineup that are generating growth in sales — items which, with a little promotional help, may perk up the price-conscious consumer? After three years, consumers are tiring of austerity budgets. And while they’re not ready to spend big bucks on feel-good purchases, they may certainly appreciate a cost-effective pick-me-up.
So how do you identify those products? Look to your POS data. What SKUs have, during the last three recessionary years, demonstrated an increase in sales — however slight. Do you see a trend in sales — slight upward ticks that show a growing consumer interest in that product? If so, take a closer look. Is growth shown around new item launches? Or is it based on price? Has there been any new innovation (new colors, patterns, scents) in the product that could be contributing to the lift in sales? Or was there a marketing campaign that really resonated with customers?
And think outside the box. Honestly, who would think that nail polish would be a salve for the economically-downtrodden soul? While this may be an obvious option for women, what about men? Consider other demographic populations and look for opportunities. What do men, Boomers, teens, college students, Midwesterners, Floridians or Hispanics seem to prefer?
Analyze sales data for different item and store attributes to determine where the trends are. Are the ‘high-end’ skincare brands at your discount store seeing large gains, as customers trade down from department stores? Are the stores close to college campuses selling more costume jewelry, as a low-cost alternative to updating the co-ed’s wardrobe without having to buy a new outfit? All of this information can be dissected and analyzed by using item and store attributes.
The key is to find those items that have either had a noticeable upswing in sales and those sleeper items that have grown at a slow and steady crawl. Then promote both the “wow” items and sleepers.
