Electronic Retailer - January 2012 - 32

‘BECAUSE THEY CAN’T AFFORD TO GET SICK’
specialty retail stores, such as Wal-Mart and the Vitamin Shoppe. The rest of the supplements – almost half – reached consumers directly by various means, “mail order” being a prominent one. Marketers say that direct response channels, especially DRTV, are well suited to nutraceuticals because they give sellers enough time to explain the health issues they are addressing and to differentiate their products from competitors who may tout the same ingredients. For instance, all Omega-3 supplements are not created equal. If you go into a specialty vitamin store and ask about Omega-3, says Sandnes, you likely will be steered to the store’s own brand. If you go to a mass retailer, the staff will have no knowledge at all. “We’ve done our own research and found that [retail salespeople] had no clue what ‘body-ready’ Omega-3 is,” he says. Even a two-minute DRTV commercial allows a marketer to explain such things, Sandnes says. While start-up Aminomega will concentrate initially on online advertising in order to save money, “We can use the same video we develop for the internet to create TV commercials,” he says. Ideal Living’s Williams says that because DR channels allow for explanation and differentiation, those channels let marketers sell higher-quality nutraceuticals than could survive in a retail environment, where cheaper versions on the same shelf would drive them out. Williams, who has marketed a wide variety of products via direct response, insists that long-form DRTV is the best medium for selling almost any products that require significant explanation. That emphatically includes nutraceuticals. About 85 percent of all Ideal Living revenue from nutraceuticals comes from DRTV, Williams says. Some of the television money comes from homeshopping networks in the United States and abroad, but each of the company’s best-selling nutraceutical products is supported by an infomercial. Majewski says that long-form radio advertising also is an excellent medium. Dr. Newton’s has been selling nutraceuticals for 16 years, mainly via direct response, including DRTV. But about four years ago, “the metrics flip-flopped on us and 30-minute radio infomercials 2:23:41 AM became more profitable,” he says. Dr. Newton’s uses radio infomercials in the U.S. and Canada to sell its top products, including calcium supplement CalMax, Super C22 vitamins and Skinny D, a nutrition product for dieters. Barring the imposition on the industry of any truly onerous government regulations, nutraceutical marketers see few obstacles to continuing growth. But they are aware that their industry is only recession resistant, not recession proof. So far, an economy that pushes people to look for alternatives to doctors and prescription drugs has favored nutraceuticals. “But if things get worse and disposable income continues to shrink,” says Williams, “spending on nutritional supplements eventually will go too.”

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Electronic Retailer - January 2012

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