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The Realities of Washroom Economics

By: Diana Dodson
Posted: January 10, 2008, from the January 2008 issue of GCI Magazine.
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According to Euromonitor International, bath and shower products are the slowest growing category within the beauty market, with global growth stagnating in real terms between 2001 and 2006. Commoditization is constraining unit prices and manufacturers are struggling to find new ways to add value.

Consumers are far more willing to economize on toiletries like bath and shower products than they are on cosmetics, such as skin care and makeup, trusting that the quality of even low-cost brands is of a high enough level to deliver basic hygiene. Despite a generally wealthier global market, price competition is fierce in the bath/shower category, brand loyalty is low and private label is a real threat—accounting for a fifth of global sales in 2006. This is further exacerbated by the retail distribution of the category—which is dominated by powerful supermarket chains and forces rival channels, including pharmacies, to compete on price.

Products faring best in the category are those that offer convenience and luxury—the dual demands of a wealthier global consumer base. Liquid soap was the fastest growing sector between 2001 and 2006, followed by body wash/shower gel. Bar soap declined in real terms by almost 9% over the same period.

Innovation Trends
Manufacturers’ challenge in this category is how to offer added benefits that will lead consumers away from budget product lines. Catering to pampering and wellness trends is one way they are achieving this. Cleansing is still the primary purpose of bath and shower products, but enhancing mood and offering an holistic at-home spa experience has also become key. Aromatherapy claims have, therefore, become commonplace, and formulations have become thicker, more fragrant and more luxurious. The launch of Shower Shock in the U.S. in 2007 is one of the more eye-catching examples of this trend. This bar soap contains caffeine and claims to give users their morning fix while they shower, equivalent to drinking two cups of coffee.