The need to wash your hands frequently due to the pandemic and the cold winds of winter have led to an all-too-familiar side effect: dry hands. Scrubbing with harsh soaps and hot water combined with the immediate cold air once you step outdoors, compounds the effects of dehydrating your skin. With skin feeling dry, red, cracked, and inflamed, the need for lotion is high and consumers are stocking up through Amazon.
What trends are we seeing with the lotion category and where is it headed?
The Global Market
The global market for hand cream and hand lotions, which is a subsection of the lotion category, saw a decline due to the COVID-19 pandemic according to Business Wire. The market is expected to decline from $5.1 billion in 2019 to $4.9 billion in 2020. Business Wire states that while social distancing and remote working may have reduced consumer demands, COVID-19 closing some manufacturing streams may have created operational challenges that disrupted the supply chain. This loss , however, seems to be limited to 2020, as the industry is expected to recover and reach $6.7 billion by 2023.
While Business Wire showed that the global market for hand cream and lotions declined during the pandemic, the Amazon marketplace for lotions actually saw dramatic growth. The category saw significant jumps in growth, with 19% growth from Q4 2019 to Q1 2020, and a staggering 70% from Q1 2020 to Q2 2020. Not only that, the category has grown 109% when comparing January 2020 to January 2021. The most popular targets as of Q4 2020 were body use (34% market share), general use (13.7 market share), and face use (10% market share) in Q4 2020. Just those three target areas accounted for over 3.4 million of the 5.7 million units of lotion sold in 2020.
Top Brands and Products
The top brands in the category were CeraVe with 15.2% market share, Hempz which had 7.1% market share, and Aveeno which had 5.6% market share. With that being said, CeraVe faced a decline in revenue of 14% from Q3 2020 to Q4 2020. It was one of only six brands in the top 20 that showed a decline in revenue. Other competitors saw significant growth in the same period, such as EO Products, which more than doubled in revenue.
The top 20 products in the lotion category accounted for 29% of the overall revenue for the category in Q4. The most commonly sold use case was body use, with 12 products in the top 20, followed by face use with three, and general use with two. The top 20 products saw tremendous QoQ growth in Q2 with an average growth rate of 104%. Only one product experienced a decline in revenue. As expected, the brand with the most products in the top 20 was CeraVe, with five. Three of those products were in the top 5 of the category.
Pricing & Search
If we looked at the ways that companies price and market lotion products, we can see some expected but interesting insights. The median average price of all lotions in the category is $17.69. If we split the data into quartiles, having a more affordable half and a more premium half, it can provide a bit more insight into how products are priced. We see that the more affordable options have a median price of $11.27, whereas the more expensive products have a median price of $28.08.
While price did give us an insight into how some products are marketed, we can also look into the way companies advertise their products to consumers by reviewing their titles and words that they include in marketing their products. There are 1,867 unique terms that are used to describe products. One customer preference we can look at is whether the product is scented or fragrance-free. For example, the term ‘lavender’ was used 1,319 times, while terms like ‘fragrance-free’ and ‘unscented’ were used 679 times and 997 times, respectively. There was also a high demand for lotion made out of specific ingredients, with coconut used 1,524 times, aloe used 1,744 times, and herbal used 918 times.
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