You can’t blame traditional retailers for feeling a little jittery in light of it all. For just as eye-popping as CVS’s bid for Aetna was Amazon’s June 2017 announcement that it would acquire Whole Foods Market for the tidy sum of $13.7 billion—a move that would further boost online natural-product sales while also giving Amazon yet more consumer purchasing data to play with.
And once Amazon’s private-label Elements line went live in Spring 2017—starting with four organic, clean-label, transparently sourced supplements—turmeric root extract, calcium complex, vitamin D2, and vitamin K2—the notion that it might colonize the supplement space took on even more weight. After all, Amazon already offers rush delivery for a number of supplements and over-the-counter products through its Prime Now service, which is gaining traction in almost 30 metropolitan areas, Euromonitor notes in its report.
And when you think about it, shopping for supplements online makes sense. Depending on a consumer’s product choices, the relative privacy of purchasing them from the comfort of home may present a notable advantage over hunting down a clerk in the store and sheepishly asking him where to find them.
In fact, Euromonitor calculated that global Internet sales of vitamins and dietary supplements reached 14% in 2016 compared to 9% for consumer health products generally and a mere 2% for food—categories where the consumer may not be quite as interested about privacy.
Of course, it’s worth noting that while the online shopping experience itself may be private, very little about consumers’ purchasing data actually is. A signal asset that Amazon and other online outlets possess is the scads of data about what we buy, in what quantities, how frequently, and at what price point. So as these players get more entrenched in the industry, you can bet on them putting that data to use.
Filling the Void
In any case, while Lohman concedes that Amazon and now Whole Foods “are a force to be reckoned with, and are going to sell a lot of products by carving out a niche that will compete very effectively against the Krogers and Walmarts of the world,” the combined entity “does leave a huge void. And that void is an opportunity” for retailers and the brands they sell.
Which is a refreshingly optimistic spin on what can be a worrisome topic. And if optimism is the persistence of hope in the face of uncertainty, Lohman has some tips for brick-and-mortar supplement retailers that might help keep that hope strong, no matter what’s ahead…
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