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Sales of cosmetics in drugstores grow by 7% in 2017 and confirm industry trend

Data from Abrafarma shows that sales of personal care and cosmetic items totalled R$ 14.17 billion in 2017 and accounted for 32% of total sales volume.

More cosmetics and toiletries on the shelves, the expansion of home-brand products and the revamp of loyalty programs have been reshaping the pharma landscape in Brazil. In 2017, sales of non-drugs items in the 25 drugstore chains associated with Abrafarma (Brazilian Association of Pharmacy and Drugstore Networks) climbed to over R$ 14 million, recording an increase of 7% - well above the national retail average. Sales of beauty, personal care and convenience products currently make up to 32% of total pharma sales.

Sergio Mena Barreto, president of Abrafarma

Sergio Mena Barreto, president of Abrafarma

Long gone are the days when local pharmacies dominated the market. Today, large drugstore chains are able to offer a wide range of products under one roof, which is synonymous with convenience for the consumer. They have become health and beauty temples,” says Sergio Mena Barreto, president of Abrafarma. “There is a growing offer of wellbeing products, which do not compromise drug sales”. He states that despite having lower profit margins than drugs, these products help enhance the shopping experience and build customer loyalty.

With more than 1,600 stores spread across 20 Brazilian states, Raia Drogasil followed the trend of transforming drugstores into wellbeing centers. Sales of beauty and personal care products in Raia Drogasil stores accounts for 30% of the company’s revenue. "We have been focused on product trialling and campaigns with beauty consultants as well as effective merchandising. Non-drugs are displayed in premium spots in the stores,” says Eugênio De Zagottis, VP of Planning and Investor Relations for Raia Drogasil.

Home-brand products are driving sales

Eugênio De Zagottis, VP of Planning and Investor Relationships of Raia (...)

Eugênio De Zagottis, VP of Planning and Investor Relationships of Raia Drogasil

Our home brands allow us to deliver high-quality, affordable products. This product offering includes over 500 products of brands TRISS (hair accessories and makeup), Needs (beauty and personal care), B-Well (vitamins, dietary supplements and nutricosmetics) and Nutrigood (functional foods),” says Zagottis.

Home brands are designed to cater for different customers, including those with lower purchasing power, by expanding their choices. "We compete on equal terms with the other brands. Products are displayed side by side on the shelves, so the points of difference are set by the consumers themselves. Our flagship home brand, Needs, has been gaining customer trust consistently,” he says.

Raia Drogasil launches an average of 210 new home-brand products every year and plans to continue expanding its offering. Some of the top-selling items include hand and body wipes, makeup removers, self-tanning lotions and manicure sets. Zagottis says sales of home-brand products don’t have a negative impact on other brands. “Our promotion of home-brand products respect existing partnerships with other brands and complement the product mix in the stores,” he says. “They work as an important tool to increase customer loyalty, profitability and competitiveness.

The drugstore chain has also redesigned its loyalty program by adding customized offers, as well as discounts on prescription drugs and perfumery items.

Services help boost revenues

Another trend that has bolstered drugstore sales is the delivery of health-related services in store. In 2013, Abrafarma created the Advanced Pharmaceutical Assistance program, aimed at offering clinical services to assist in the management of medical treatments. These services include vaccination and follow-up care for patients taking prescribed drugs, as well as diabetes, hypertension and cholesterol checks. Today, there are 1,650 clinical service rooms in operation across 350 Brazilian cities.

Daniela Belli

© 2018 - Brazil Beauty News - www.brazilbeautynews.com

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