In our recently released “E-Commerce Health & Wellness Spotlight,” we talked about how the numbers bear out a “tale of two channels.” When we look at industry figures for what was projected to be the top-three categories for over-the-counter, online and off-line, across the board, the first category, weighing in at 45%, is cough, cold and allergy, the No. 2 category was analgesics at 21%, and the third-biggest category across the board was targeted to be vitamins and supplements at 17%.
However, when we compare this picture to 1010data’s own e-commerce sales data, these rankings are practically turned on their head. In fact, our largest category by far in online sales was vitamins and supplements, taking up 75% of O-T-C share. When we probed for a reason for this ranking, and why painkillers and analgesics, which loomed so large in the consumer mindset during COVID, wasn’t the biggest online growth category, the numbers made total sense.
We’d posit that people think of buying cough and cold remedies and analgesics when there is a need — and COVID certainly qualifies in that department. But then the consumer bumps up against online obstacles to purchase — indeed, many pharmacies have restrictions on how they sell some of these O-T-C products. Vitamins, however, as a recurring and more preventive purchase, lend themselves well to online purchase, as we saw in our data. They are not designed to treat symptoms someone is currently experiencing, so they represent a less variable purchase. Not surprisingly, the biggest growth in vitamins from a retail perspective came from Amazon’s subscription service. It’s simple and easy to sign up for a given supplement, consumers know they are taking specific vitamin every day, and the supply is replenished without the consumer having to give it much of a second thought.
This dramatic shift in buying habits for O-T-C pharmaceuticals illustrates the importance of having channel-specific marketing strategies tailored to the online and off-line consumer. Furthermore, comparing the online and off-line data points, what we see is a clear and present opportunity for chain pharmacies to grow their share in certain O-T-C categories.
Looking at online only vitamins and supplements, which accounted for 75% of online O-T-C sales, we witnessed a growth of 68% year over year. In other 2020 O-T-C online year-over-year growth, we saw in our e-commerce panel that probiotics were up 58%, allergy relief was up 143%, sleep aids were up 108%, pain relief up by 164%, and cough and cold by 131%. And while online sales of cough and cold grew 131% year over year, as big as this jump seems, this category was not the greatest growth segment or best-performing category — probably due to the aforementioned limitations on buying these products online.
Vitamins: Being in the right place at the right time
The vitamin category was the shining star, surpassing all other categories of online O-T-C, so it’s worth a closer look. The three top-performing O-T-C manufacturers — NOW Foods, Nature’s Bounty and Garden of Life — squarely inhabit the vitamins and supplements space. While there are several possible interpretations as to why people bought so many vitamins and O-T-C products during this time, clearly in the early days of the pandemic the lack of a research-based medical protocol for COVID-19 loomed large.
Some vitamin and supplement brands saw huge growth during 2020. 1010data’s e-commerce panel has been tracking trends and emerging growth in natural products focused on gut health (probiotics), mood and key conditions including diabetes and cancer. While these topics have been front and center in the mind of health-conscious consumers, the options for preventive care and natural solutions continue to grow — and COVID was a natural mind-opener for more people than ever before. For example, Goli Nutrition stands out as a breakout winner with 571% year-over-year growth. Following several years of online popularization of apple cider vinegar, the company launched the “world’s first Apple Cider Vinegar gummy” prior to the pandemic and maintained soaring sales momentum throughout the year.
Our data on search terms and specific items help tell this story. People used some surprising search terms to deal with their fears around COVID; the top 10 search terms leading to consumers adding a product to the cart were: probiotics, vitamin C, vitamin D, melatonin, zinc, Tylenol, Mucinex, elderberry gummies, ibuprofen and probiotics for women.
How amazon subscription and Instacart won the day
It’s worth noting that today consumers no longer go to Google as the default; consumer loyalty has shifted how consumers shop online, with searches starting on preferred sites including Amazon, Walmart and Instacart, where many consumers have signed up for memberships. Target continues to experience strong growth, explicitly stating “no membership required” in response to Amazon’s Prime Day event. And with this shift has come a natural turn toward the big retailers’ private label lines; as noted in our 2021 Amazon Prime Day Primer, “A Spotlight on Amazon Private Label Brands” report, Amazon’s private label vitamins and supplements category grew by 50% year over year. During the pandemic, many people became so accustomed to buying their O-T-C health aids, vitamins and supplements through the giant retailer that Amazon Subscription took the majority of share in 2020, increasing 3.5 points and 133% in sales growth year over year.
Instacart’s O-T-C health sales grew the most in 2020 at 395% year over year, with big-box retailers like Walmart at 304% and Target at 240% hot on the trail. Costco was driving a majority of sales for Instacart, owning 31% of their seller share within O-T-C Health.
Lessons for chain drug retailers
Migration to online is real, and some subcategories of O-T-C that have traditionally been in the realm of the physical store or retail pharmacy not only are more conveniently ordered online, but the all-important search for and discovery of them starts online. Therefore, chain drug retailers and brands that aren’t doing everything in their power to understand this movement and maximize their online capabilities risk missing out on the growth of this all-important channel.
Jonah Ellin is chief product officer and Frank Riva is vice president of marketing at 1010data, a provider of analytical intelligence to the financial, retail and consumer markets. They can be reached respectively at Jonah.Ellin@1010data.com and Frank.Riva@1010data.com.