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Bath and Shower: No Longer a Drain

By: Briony Davies
Posted: March 5, 2007, from the March 2007 issue of GCI Magazine.

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Although Western Europe and North America currently account for a vast proportion of global value sales, the maturity of bath and shower products in these developed economies leaves little room for volume growth. In addition, increased competition puts pressure on prices, limiting opportunities for value gains. New product launches offer functional benefits, problem-solving formulations, and convenience and portable formats. Segmentation by age and gender is also a way for players to justify higher prices, as is the incorporation of natural ingredients and aromatherapy.

In North America in 2005, minimal value growth of 2% was driven by the dynamic body wash/shower gel product area (which itself grew by 10%). Specialist stores selling premium products, such as Bath & Body Works and The Body Shop, helped spur growth. Natural and organic ingredients are big draws for bath and shower products in North America, but, conversely, so are highly efficacious offerings such as antibacterial liquid soaps. Such innovation helped offset a 3% decline in bar soap, attributed to increased competition from liquid soaps for hands and the growing retail presence of bar soap alternatives in price-competitive mass-market retailers. In terms of segmentation, men were the new target, and after intense new product development, Unilever introduced a male-specific grooming line that included bath and shower items under its Axe brand.

Faster growth in both Australasia and Western Europe between 2001 and 2005 was stimulated by regional economies more buoyant than North America’s. This growth was further aided by successful product development. The U.K., Italy, Germany and France were the largest markets in Western Europe in 2005, but also the poorest performers in terms of value sales growth—due in part to the threat of low-priced private label offerings. In the U.K., new innovations focused primarily on pampering and attracting male consumers. The mega brand trend was also in evidence, with brands leveraging their popularity by expanding their presence. Unilever branched out its bath and shower brand Lux into liquid soap in July 2005, and made a similar move again in August by building on the success of Sure deodorant, and introducing the brand into body wash/shower gel for the first time.

Take Local Preferences into Account

Euromonitor International observes that differing national bathing preferences is a key factor impacting demand for bath and shower products across the globe. In Japan and the developed Western markets, hygiene regimens are fastidious and usage is heavy. There also are competing demands—for elaborate, pampering treatments as well as time-saving and portable products. In the hotter climates of Latin America, consumers also put a strong focus on personal hygiene, with some Brazilian consumers bathing up to three times a day. However, lower levels of disposable income in this region keep spending trained on economical bar soap. Added-value liquid variants are a dynamic but comparatively tiny niche. India, on the other hand, while relatively underdeveloped, has a strong tradition of using talcum powder in place of deodorants, making this the largest single-country market for the subsector.

Country-to-country variations in bath and shower products usage are expected to become less noticeable in the long term—as the spread of Western hygiene norms and rising global affluence kick-start demand in less developed markets. The previously mentioned hand washing campaign in India and similar educational campaigns have been successfully undertaken in underdeveloped communities, but education is not the only factor to penetrating these markets. Keeping unit prices down is also important in making products accessible to low-income populations. Maintaining smaller unit sizes—cost-effective sachet-sized versions, for example—is key to maintaining low unit prices. Modernization of distribution will also lift sales, making products more visible and accessible and increasing access to Western brands.

Innovation and New Niches Vital to Success