Baby-product categories are feeling the price pressure

Price, convenience, and nutritional content are driving baby-product sales as consumers continue to shift toward online channels for these items.

A February survey of 1,000 consumers conducted by research firm Jungle Scout found that Walmart brick-and-mortar stores were consumers’ preferred destination for baby products, cited by 10% of consumers. Close behind was Amazon at 8%, and then Walmart.com at 7%. Target stores and Target.com were each cited by 4% of consumers.

The research also found that baby products were one of the fastest-growing categories on Amazon in the first quarter, with sales up 9% year-over-year at the online retailer.

Overall dollar sales of baby care products across all retail segments were up 2% to about $19 billion in the 52 weeks through May 4, compared with the preceding year, according to research firm NIQ. Unit sales, however, declined 5% in that time period, as the average unit price rose 7.3% over year-ago levels.

Among the largest categories, dollar sales of diapering needs were up 3.6%, with unit sales up 1.4%, showing minimal impact of inflation. Within the diapering needs category, disposable diapers saw dollar sales gains of 2.8%, with unit sales up 0.7%, while baby wipes were up 7.1% in dollars and 2.9% in units.

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Baby food saw a greater impact from inflation, with dollar sales up 1.3% but unit sales down 6.2%, with unit price inflation of 8%. Dollar sales of infant formula rose 6.9%, but unit sales were down 7.3% amid unit-price inflation of 15.3%.

A recent McKinsey & Co. survey, meanwhile, found that unit sales of baby products declined about 4% in both grocery and mass retail stores in 2023, while unit sales at online platforms were basically flat. Among those consumers who reported declining purchases of baby products, most said they needed less than they did the previous year, but 25% said they bought less because prices had increased, and 18% said they could not afford as much product for economic reasons.

The nutrition factor

While price and convenience are significant factors in the baby-products categories, parents are also increasingly interested in the nutritional content of the foods they buy for their babies and infants, said Christine McNerney, VP of merchandising operations and home, health and beauty categories at online retailer Thrive Market.

“Parents are looking for snacks and food that packs a nutrition punch, with attributes like high protein and low sugar, while also being on-the-go and convenient,” she said. “Thrive Market members are seeking out better alternatives to conventional products they grew up with and easier formats like pouches, snack packs, and bars.”

Related:Clean labels, convenience drive baby food

Sales of baby and kids’ foods at Thrive Market have been growing at high-double digit rates for the past two years, McNerny said. In addition to the sales growth in baby food categories, the online retailer has also been seeing babies’ and kids’ supplements and body care growing at high double-digit rates.

“We expect to be the everything destination for families,” she said.

Thrive Market’s membership base has been shifting toward new parents and young families, which now comprise about 65% of the company’s new-membership enrollments, McNerney said.

“It is a top priority for us to ensure we have all the needs for our parents at every life stage, and we plan to continue to expand the assortment to do so,” she said.

Building long-term loyalty

Becoming a one-stop shop for baby care is also the goal of supermarket rivals such as Target and Amazon, which seek to provide not only baby foods and other baby essentials, such as diaper, wipes, and HBC products, but also support for new and expectant families.

“I think that the retailers are looking to build loyalty,” said Jen Saxton, founder and CEO of Tot Squad, a platform that connects new and expectant families with experts who provide services such as sleep counseling, nutrition advice, and car-seat installation. “If Amazon can be the destination where you can get not just the products that you need, but also the support and the services, then they're really becoming that one-stop shop where you can find everything you need, and that drives loyalty for them.”

Tot Squad last year rolled out its services, which are often given as baby shower gifts, at Target, and the company has also quietly launched on Amazon, with plans for an official announcement in June.

Although Tot Squad’s roster of services is not currently available in any traditional supermarkets or drugstores, Saxton said she’s looking at both retail channels as potential future partners.

“I think absolutely there are opportunities there,” she said, noting that one of the company’s most popular services is advice on diet and nutrition strategies.

Those services can range from helping expectant mothers choose the right prenatal vitamins to the right nutrition for nursing mothers and for the babies themselves.

“We see a lot of our diet- and feeding-related services fitting into more grocery retail in the future,” said Saxton.

Mother’s Day tie-ins

Some retailers piggybacked on the recent Mother’s Day holiday to reinforce their positioning as a destination for new families.

At Jewel-Osco in Chicago, for example, the Albertsons-owned banner launched a new campaign earlier this year celebrating mothers that culminated in a prize giveaway just a few days before Mother’s Day. As part of the campaign, which was sponsored by Huggies, Kimberly Clark, Kraft, and Mondelez, Jewel-Osco made a $20,000 donation to the Junior League of Chicago for its Bundles for Babies diaper drive.

The MOMents promotion was created by Tina Browen, senior marketing director at Jewel-Osco, a spokesperson for Jewel-Osco told Supermarket News. The campaign encouraged customers to nominate deserving moms for the chance to win prizes and groceries. MOMents received more than 10,000 entries during the four-month on-line nomination process, and from those entries awarded surprise grocery deliveries worth $500 to 50 local mothers. Another 50 women were selected for the May 9 MOMents celebration at the Four Seasons Chicago. Other prizes included a $500 Jewel-Osco gift card, a pair of Justin Timberlake tickets, and a one-night stay at the Four Seasons.