A growing senior citizen population and Americans' increasing lifespan are driving growth in the incontinence products market. Add in new materials and more product styles, and the market is ripe for continued growth. But are home medical equipment providers getting their share? Can HME companies compete with drugstores and grocers in providing incontinence products? Experts in the sector say yes.
Incontinence is experienced by 25 million adult Americans with 75 to 80 percent of them women. Incontinence, according to IRI data, was a $639 million market in 2008.
"I expect the incontinence market to grow significantly along with the growth of the senior market, at a higher rate of 5 percent annually, based on the proportion of woman living longer and the continued overall increase in longevity," says Peter Kaplan, category manager for incontinence and diabetes for Invacare Supply Group.
"The 65-plus market is expected to grow from 12.4 percent of the population to 19.6 percent by 2030. This translates into growth from approximately 35 million seniors to an estimated 71 million, with those 80-plus growing from 9.3 million in 2000 to 19.5 million in 2030," he adds. "The explosive growth of the senior market is the result of baby boomers living longer, eating healthier and pursuing more active lifestyles as well as improved medical care."
Daniel Lafferty, marketing home care director for SCA Personal Care North America, says incontinence product sales are continuing to increase by as much as 8 percent each year.
"The channel is still broken up into private pay/cash and Medicaid reimbursement. This split remains nearly 90 percent Medicaid reimbursement today, depending on how you choose to define the market," says Lafferty. "The cash side of the business is growing as business owners recognize that the reimbursed portion of the market is competitive and margins are extremely low."
The aging of America is directly related to the market for incontinence products, not only on the growth of sales but also on product design and consumer preferences.
"The new wave of aging Americans is used to being pampered. They are very proud of their dignity and they want solutions to help them manage and retain it," says Stuart Simonovits, COO of K2 Health Products. "Another two issues that we need to consider are the economy and sustainability. Obviously, the economic climate is affecting many retirees, and aside from quality, they are looking for ideas to help them save money. The other issue pertains to the environment. Increasingly, consumers are looking to do their part to help protect our planet."
Kaplan lists several additional trends affecting the market, including:
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A move to gender-specific products, specifically protective underwear;
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Increased interest in breathable briefs for improved air circulation, reduced heat buildup and less exposure to plastic that can irritate skin;
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A focus on improved efficacy with target areas and wicking material that is more effective at reducing waste exposure to patients' skin; and
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A focus on thinner, lighter weight materials with better absorption capacity and improved comfort.
Simonovits also sees an increased interest in gender-specific products. "The idea is logical, as today's adults are increasingly looking for more comfortable and dignified products," he says.
But today's customers are "not ready to settle for inferior products, or even for boring, albeit useful products," he emphasizes. "They are looking for innovation, and that is what we as manufacturers need to be providing for them.
"For years, the industry simply recycled products, trotting out the same unimaginative collection of so-called 'solutions' for incontinence troubles," Simonovits continues. "That is about to change. The companies quickest to realize this and change their approach will survive. The rest will fail."
Better Products, Increased Sales
Over the past decade, products have continued to change through refinements in engineering and the use of better raw materials.
"Utilizing consumer insights has been key to the change in product offerings, including the emergence of protective underwear, or pull-ups … or the new developments of gender-specific products," says SCA's Lafferty. He notes that SCA, for instance, has "continued to reach out to our customer and consumer base and implement change that is tested and asked for to ultimately improve the care of incontinence sufferers. These products have afforded individuals to live a higher standard of life and helped both their professional and unpaid caregivers [with] the opportunity to provide better care."
Innovation in the use of materials provides numerous benefits for consumers. Products have improved with the use of lighter weight, thinner and more effective materials that provide a more comfortable body-close fit that is far more discreet, adds Kaplan.
"Also, breathable products are becoming far more important, allowing an improved flow of air to pass through the material to the skin to reduce heat buildup for improved skin health and less risk of infection," he says. "Cloth-like material is quickly replacing plastic back product providing a more comfortable, less-skin-irritating result while eliminating the crinkling noise so common to baby diapers for a more discreet and natural experience."
Other design improvements include strategically placed enhancements at the target point of urine or fecal release that wick away fluid and/or separate waste from patients' skin, which reduces the risk of infection and improves comfort. Another improvement is the use of refastenable tabs for briefs that allow users to adjust the fit multiple times for a better, closer fit to improve comfort and reduce leakage, according to Kaplan.
Product innovation also means improving currently available products, Simonovits points out. "It's not only about new materials, but using existing ones to help improve products and packaging, thereby improving the look, feel and, ultimately, sales of these items," he says.
Growth Offers Opportunity
As the market for incontinence products grows and materials offer enhanced options for consumers, the opportunities for providers are expanding as well. But a major obstacle for some HME companies is the wide availability of these products in drugstores, grocery stores and mass retailers.
"Incontinence products provide HME providers with a well-rounded assortment of products that their current patient population is most likely buying elsewhere," says Kaplan. But he points out that creating a one-stop shop for current patients' medical needs is far more convenient for them, especially in the case of mail order where they can receive all their monthly supplies together in one shipment.
"For example, female diabetes patients have a 70 percent higher risk of incontinence than non-diabetic patients, and HME providers are likely servicing these patients now," he says. "Also, this is generally a cash purchase that is not impacted by recent Medicare reimbursement cuts and can help offset the margin loss from those cuts."
"By working with patients to answer questions and ensuring they have the appropriate incontinence protection that is right for them, as well as providing accessory products such as skin care, washcloths, gloves and so forth, HME providers create a nurturing environment that patients trust and will feel compelled to come back to."
In addition, home care businesses can provide an extended level of convenience while further improving their service level with home delivery of incontinence supplies. A distributor drop-ship program means providers don't necessarily have to stock additional product.
In sum, HME providers need to do what they do best, which is to leverage their smaller size to meet the individual needs of their consumer base, these experts say.
"Offer home delivery, offer product counseling and offer a wider range of products," advises Lafferty. Within that product range, however, he stresses that it is crucial to carry major brands. "While private-label products offer consumers a price break, brands drive loyalty," he says.
He also encourages providers to seek assistance from their vendors. "The market is large enough that medical equipment providers can compete with retailers if they [have] the right offering for their customer base," Lafferty says.
In retail, products have to tell a story, notes Simonovits, emphasizing that packaging and display play an important role in closing incontinence product sales.
"It's not enough to simply put them in a bag and hang them on a hook in the store," he says. "Use premium materials and packaging to help the customer make an informed, educated and, ultimately, an economically wise decision."
Simonovits acknowledges that national drugstores and mass merchants are strong competition, but he says HME providers can certainly play an important role.
"Carrying quality products, especially niche products such as reusable underwear and reusable bed pads, will enable you to set yourself apart," he says. "Doing this will provide something for every type of consumer whether they are looking for quality, cost effectiveness or sustainability."
Keeping Up with Competition
As the market for incontinence products grows, experts say HME providers can increase sales by incorporating the following strategies:
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Offer a wide selection of products. Don't forget about add-on products, such as skin care products and caregiver supplies.
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Stock niche products to help differentiate your business.
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Provide education on the availability of products both to current and potential customers.
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Market products and provide education to caregivers.
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Offer competitive pricing.
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Consider Internet sales and/or home delivery in discrete packaging.
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Market to assisted living facilities and home care agencies.
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Tap into manufacturer support and resources.
Customers Want Privacy When They're Shopping
Kimberly-Clark debuted its new gender-specific Depend products in March complete with the largest integrated marketing campaign in the history of the brand. But there are lessons in the rollout that go beyond the product itself.
Tailored to fit the unique body shapes of men (predominantly rectangular) and women (who have more variation in shape and size than men), the newest Depend designs look like regular underwear and replace the brand's unisex pull-ups.
"This isn't just a product, this is a hero product," says Blake Boulden, brand manager for Depend. "It allows people to stay engaged, normalize their life and get back to that person … they want to be and not have to be limited by what incontinence can often do to people.
Lafferty, too, believes providers have a significant opportunity in this area. Yet they must be conscious of pricing and provide a knowledgeable educational resource for customers.
"The common concern is price, and the reality is that consumers, especially in this economic climate, will be price-sensitive," he explains. "Traditional retailers will always be more competitive on price. That being said, consumers — wearers of products, their unpaid family caregivers and professional caregivers — are all starving for information in this category."
Lafferty advises HME providers to become the local "specialists" in this area and in related fields, such as diabetes and aids to daily living products. "Customer service will go a long way in this area to help an overwhelmed and confused customer base get into the right product at a fair price at the right time," he says.
"A larger product selection than found in traditional retail is key. For instance, most major retailers are no longer carrying briefs. This is a huge opportunity to capture this customer base."
Kaplan agrees. "HME providers can provide a better value by offering a competitive price combined with a level of service patients cannot get in a pharmacy, grocery store and certainly not a mass merchant," he says.
"When you think about the boomers and who that consumer is," Boulden continues, "they are getting to the age now where incontinence is something they are going to have to start thinking about dealing with, whether it's for themselves or somebody they are caring for. It's going to take this market to a whole new level."
But considering baby boomers' lifestyles and expectations, he adds, "this is a different consumer, and you really need to think how you are meeting their needs."
Those needs include more than product alone, Boulden says, so K-C's Depend Underwear for Men and Depend Underwear for Women feature packaging that can make choosing the right product faster and easier for shoppers. The company's research indicates that both users and caregivers can be uncomfortable shopping for incontinence products, so the new packaging offers a simpler "selection experience" at stores.
While K-C says its Depend and Poise brands hold a combined market share of more than 50 percent in the North American adult incontinence category — which the company estimates at $1.2 billion — "consumers don't want to buy these products in stores," Boulden says. "They're afraid they'll run into their neighbor or someone will see it in their cart so they're shopping early in the morning or late at night. They may make a dry run down the aisle first to see if anyone is there."
The fact that HME providers can offer customers discreet shopping is a big advantage over drugstores and groceries. And because the privacy factor is of such concern, Boulden notes, Internet sales will also become a much bigger play "as more Web-savvy consumers who are used to buying online move into the market."
Experts Interviewed
Daniel Lafferty, marketing home care director, SCA Personal Care North America, Philadelphia; Peter Kaplan, category manager for incontinence and diabetes, Invacare Supply Group, Milford, Mass.; and Stuart Simonovits, COO, K2 Health Products, Brooklyn, N.Y.
