Customer Segmentation Case Study: Cleaning Products

Customer Segmentation Case Study: Cleaning Products

Grove Collaborative and Blueland take on Amazon and P&G for Green Consumers

Driven by COVID concerns, household cleaning products of all sorts grew rapidly in 2020, with most large manufacturers like Procter & Gamble, Unilever, Reckitt Benckiser, Clorox, Gojo and SC Johnson initially struggling or unable to provide the supply needed to meet the demand.  Many of these firms have since responded with capital and labor investments to increase their supply. 

    With the initial rising tide of demand lifting all boats, there seemingly was no need for a cleaning products customer segmentation case study or detailed understanding in the face of the demand surge.  

    Cleaning Products Customer Segmentation Case Study: 2020 Dynamics Put New Products on Hold for Large Manufacturers

    And with supply challenges and grocery and mass retailers facing out-of-stocks, focusing on new products to meet the demands of specific customer segments was not the priority. Instead, many large CPG (consumer packaged goods) firms delayed or eliminated new product launches in 2020 to focus on supply of their core brands and products. Traditionally, CPG firms follow a long-term innovation strategy, releasing new products each year that are tailored to meet the needs of specific customer demand segments. 

    Cleaning Products Customer Segmentation Case Study: Consumer Segments Who Prefer Green

    Consumers who prefer green or natural cleaning products and packaging are an example of a customer segment in cleaning products.  This group is large.   For example, one study found that 33% of US consumers strongly or somewhat agree that “I am concerned that the chemicals in my household cleaning products could cause health problems,” with significant variation by segment.  For a larger estimate of green cleaning product demand, Airbnb reports that 88% of its hosts use green cleaning products.

    With greener, more natural and sustainable cleaning products addressing an enduring long-term demand trend, there are several meaningful customer segments who prefer natural or greener cleaning products. These customer segments form an attractive target for new products from existing brands, new brands and “new” delivery models like subscription services.

     A broad outline of some possible green or natural consumer sub-segments includes:

    • Health Fanatics
    • Animal Lovers
    • Outdoor Enthusiasts
    • Resource Conservers

    While these sub-segments are interesting to consider, we recommend category specific customer segmentation, such as household cleaning products customer segmentation.  

    We also recommend an updated approach, given the increased scrutiny on household cleaning in 2020 and 2021.

    Keeping a clean home has always been important to US consumers, with around 60% agreeing that “Keeping a clean home is part of living a healthy lifestyle.”   Keeping a clean home involves many aspects, and homes have been under more scrutiny with COVID, so much so that Consumer Reports providing “Cleaning Secrets for Every Room.”

    Cleaning Products Customer Segmentation Case Study: Examples of Greener Brands

    There are several brands that offer hand sanitizer products that address the natural or green-preferring customer, e.g.,

    Many of the large CPG manufacturers offer brands and product lines tailored to the needs of the green or natural-preferring consumer segment.  For instance, S.C. Johnson owns the Mrs. Meyers brand and Unilever owns Seventh Generation.

    Beyond specific product lines, initiatives to improve the firm’s environmental and human health impact can take the form of pledges and supply chain initiatives to improve across their product portfolio. An example of a supply chain initiative is S.C. Johnson’s Greenlist launched in 2001, and reviewed as a case study for the Green Chemistry and Commerce Council in August 2020

    Online Subscriptions and Brands for Natural Cleaning Products

    There are quite a few brands offering online subscriptions for consumers who prefer natural cleaning products, along with the convenience and perceived safety of at-home delivery.   The market is highly competitive, suggesting a need for a clear customer segmentation strategy to be successful.

    Three firms: Grove Collaborative, Honest Company and ThreeMain were included in top lists by three sources. Another four firms: Blueland, dropps, Puracy and cleancult were noted by two sources. There were a number of other services that were noted only by one source.

    Customer Segmentation Case Study: Cleaning Products

    Here’s a deeper dive into two examples:

    Customer Segmentation Case Study: Cleaning Products

    Grove Collaborative

    •  Offers “natural, organic and eco-friendly household products”
    • Household cleaning brands include: Mrs. Meyer’s, Grove (private label), Method, Seventh Generation, Dr. Bronner’s, Grab Green, Aunt Fannie’s, Arm & Hammer, babyganics, Counter Culture, Borax, Bon Ami and more
    • “Plastic neutral” direct-to-consumer retailer (DTC)
    • TV advertising showcases female consumers feeling good about their choices, refilling bottles and enjoying at-home shopping convenience
    Customer Segmentation Case Study: Cleaning Products

    Blueland Cleaning Subscription

    • Offers soap, laundry, dish and cleaning sprays
    • Blueland brand (private label)
    •  “Refill is the new recycle.” Buy the “forever” bottle, fill with water, and “drop in a cleaning or soap tablet”
    • Eliminate plastic waste
    • “For people who read labels.” No Phosphates, no VOCs, no chlorine bleach, no parabens, no ammonia
    • TV advertising is a mix of happy ecological cleaners and Kevin O’Leary on Shark Tank

    Despite the rising tide and the popularity of subscription models, it will be interesting to evaluate in three years if these brands are able to carve out and retain a loyal customer base.

    New Entrants Lack Insights into Cleaning Products Customer Segmentation

    The 2020 hand sanitizer market is a clear example of products that lacked customer segmentation targets and differentiation.

    To meet the supply shortfall for household cleaning products, firms that were not historically manufacturing cleaning products pivoted to produce products in high-demand cleaning categories like hand sanitizers. Here in Los Angeles, for example, it seemed that every distillery stepped in to manufacture hand sanitizer in 2020. One such example is El Segundo’s R6 Distillery. There were many craft distilleries nationwide, and even larger firms like Anheuser Busch

    As may be expected, the hand sanitizer products produced by these distilleries lacked a clear customer segmentation strategy and were generally undifferentiated. And by August 2020, many of these opportunistic firms were exiting the cleaning products market, and excess hand sanitizer is even showing up in hazardous waste recycling. 

    Based on our experience, there are distinct customer segments in cleaning, some of which are much more committed to green and natural products. There are also segments that are less interested in cleaning and less interested in natural or greener products.  A clear understanding of the current and emerging demand through a customer segmentation study would be extremely helpful in standing out in this crowded market.  

    For more resources on customer segmentation, visit our resources page.  Or contact us to start a dialog.

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