Will Vitamin Shoppe’s strategy pay off in its first quarter of 2017?

The Vitamin Shoppe continues to take steps to adapt to a rapidly changing — and still fiercely competitive — retail environment. The company, like many retailers across all channels, has implemented a turnaround strategy to tackle the issue of dwindling same-store sales. In 2015, the Vitamin Shoppe realized the key to winning customers was to differentiate itself from the competition. Its two-pronged approach was to overhaul its e-commerce platform and invest in its private brands.  

After revamping its website, the Vitamin Shoppe saw total comps dip 2.2% in its 2016 fourth quarter, with retail comps slipping by 1.8%. But the company saw a boost of 7% from its website. Driving that increase were the redesigned platform’s launch, as well as increased penetration for its private brands. In fact, the company’s private brand growth in the quarter outpaced overall sales growth, and represented 20.2% of the company’s total sales, up 110 basis points from the same period last year.

"It’s that type of personal connection that generates customer loyalty. And loyalty translates to sales.”

Optimists may see those 2016 Q4 figures as a sign that the company’s strategy is working, and that — if it keeps up the forward momentum — the Vitamin Shoppe can turn the tide. But the company’s figures bring up an important question about how we measure a retailer’s success. Some financial experts have questioned whether same-store sales are still are a relevant metric in a retail environment that is seeing shoppers flock away from brick-and-mortar stores and toward the convenience of online shopping. There is no question that consumers’ shopping behaviors have changed. Catalogs have been replaced with a desire for visually appealing and easy-to-navigate websites, and online feedback, be it from other shoppers on various social media channels or from established blogs and vlogs.

Shoppers also want convenience, as well as good quality for a bargain price. Retailers have had to make changes to adapt to and stay relevant in this new retail landscape, so it seems logical and inevitable that the way we determine how well a retailer has performed must eventually change as well.

Plnt and Earth Day 2017 campaignChange, of course, is complex and often slow. In the meantime, the Vitamin Shoppe is preparing to report its first quarter 2017 results May 10. Here are just some of the steps the company has taken this year to continue putting its turnaround plan into action.

In 2014, the Vitamin Shoppe launched a new private brand called Plnt that includes products made exclusively with natural ingredients. All Plnt products are free of gluten, dairy and artificial preservatives and offer a variety of herbs, supplements and whole foods. This year, to celebrate Earth Day on April 22, the company partnered with American Forests to plant at least 10,000 trees. For every Plnt brand product it sold from April 21 to April 23, the Vitamin Shoppe donated $1 to the nonprofit organization, and pledged to plant those trees in selected forests in Mississippi, Texas, California and Wyoming.

It’s an effective campaign strategy in that it promotes a better-for-you private brand that makes the retailer stand out from the pack. The strategy also serves as a vehicle for the Vitamin Shoppe to show that it’s doing its bit for the planet. But it goes a step further. It allows the Vitamin Shoppe to personally connect with shoppers who, in turn, feel like they are also participating in a good cause. Customers can feel good knowing that their purchase will help the planet thrive. It’s that type of personal connection that generates customer loyalty. And loyalty translates to sales, be it in a store or online.

In addition to Plnt, the Vitamin Shoppe’s private brand portfolio includes The Vitamin Shoppe, BodyTech, True Athlete, MyTrition, ProBioCare, Next Step and Betancourt Nutrition brands.

American Forests is the oldest national conservation organization and has planted more than 50 million trees since 1990 in all 50 states and 43 countries. This year, American Forests aims to plant 3 million trees — a number The Vitamin Shoppe wants to help the nonprofit achieve.

 

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