GNC, the multibrand health and nutrition retailer, is trying to turn around its business and acquire new customers with a new focus on beauty supplements.
In April, the brand will feature its first-ever beauty end-cap display in each of its 6,000 stores. Brands in the end cap include collagen brands ResVitále, Neocell and Body Kitchen, GNC Hair, and Skin & Nails. Throughout 2019, the company is also investing in new proprietary beauty ingestible brands, like Body Kitchen and Earth Genius. In addition, it’s launching targeted digital ads and marketing and influencer campaigns around beauty.
Founded in 1936, GNC has been known predominantly for its protein and fitness supplements, despite the fact that it offers more than 100 products in the beauty and wellness categories, said Selena Cox, GNC director of merchandising. In 2018, the company earned $2.3 billion in sales, a decline of 5% from 2017, and it’s seen its revenue fall for 11 consecutive quarters.
“The end cap represents how we are evolving the category,” said Cox. “We aren’t always considered the destination for beauty, but we are showing the customer through our end cap and assortment that we are the headquarters for their beauty ingestibles.”
Vitamins, supplements and food alone make up $702 billion in the overall $3.4 trillion global wellness industry, according to the Global Wellness Institute. However, competition from upstart ingestible brands is increasing, and they too are focused on driving customers to their own brick-and-mortar stores.
Dirty Lemon opened its first location called The Drug Store in September, and Elle MacPherson-backed WellCo opened its own store that same month. The Nue Co. opened its first location in November and is stocked in places like Violet Grey and Net-a-Porter. Retailers like Nordstrom and Sephora have also been building out their departments to include more ingestible offerings from the likes of Hum Nutrition.
Coinciding with the enhanced physical presence of beauty within GNC stores is also a concerted effort to bring female customers into locations. Part of that strategy consists of offering new brands and products that fit into the beauty and wellness category. In November 2018, GNC tested this through the additions of Body Kitchen, Earth Genius and ResVitále to its existing assortment. GNC saw its customer breakdown change significantly, from 43% female in November 2018 to up to 47% by December 2018, according to Cox.
“Our strength is in sports and performance, and we have a stronghold on that [type of] customer,” said John Learish, svp of marketing for GNC. “But the opportunity for us, and where we’re growing much quicker, is the health and wellness space in which beauty lays. We are trying to rid ourselves of the sports and performance image, [because] female customers can be intimated by that.”
To reach and acquire new female customers interested in beauty ingestibles, the company is investing in digital marketing, Learish said, but declined to provide exact figures. Most of the digital investment is on Instagram, where it has 297,000 Instagram followers, and Facebook, where it has 1.5 million “likes,” but it is also running paid ads on Twitter, YouTube and Snapchat.
The campaigns will also consist of display ads, carousel ads and expanded page units, as well as targeted emails and direct mail campaigns — GNC declined to state how many subscribers it has for either program.
GNC is also targeting female beauty customers through lookalike modeling, where it identifies people who look and act like their target customer and then, through a tactic called “competitive conquesting,” deploys an advertisement for products adjacent to competitors’ ads. Additionally, GNC has plans to invest in paid influencer campaigns in 2019, said Learish.
“Beauty and wellness is a natural place for us to play in,” he said. “We are designed to provide products for specific needs, mostly about your body, so the beauty portion of that regimen is a natural extension.”
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