Innovations in Women’s Healthcare: D2C Menstruation Care
By Nikki Mahendru
Part A: Introduction
The women’s health market is estimated to be worth over $47.8B globally and $20.8B within the U.S market (Grand view Research, 2020), and it includes a wide range of technologies that are aimed at addressing the specific health needs of women. There are many areas of development, the biggest ones include: 1) menstruation care 2) pregnancy care 3) fertility solution 4) pelvic & sexual health 5) menopausal health 6) nursing care (breast-feeding) 7) cancer care and 8) general health care (CB Insights, 2018). One of the biggest trends common within all these areas of development is the direct-to-consumer (D2C) solutions which are focused on increasing accessibility to women’s health services.
With respect to menstruation care, the global market is projected to grow to $36.5B by 2024 and current incumbent brands like Playtex and Tampax have largely dominated the industry (CB Insights, February 2019). The traditional business model of these brands has been brick-and-mortar style, with their products in retail stores, pharmacies, and grocery stores. The trend toward D2C menstruation care, away from Playtex and Tampax, stems largely from three main factors: 1) a more environmentally, wellness, and inclusively conscious consumer 2) the reliability and interactive power of e-commerce and 3) the ability to personalize care products through subscription-based boxes. Subscription-based menstruation care box companies like Lola have raised over 43.84M since its’ founding year, 2014, in funding as they have made such consumer preferences their mission (TechCrunch, 2021). Lola is not alone, D2C companies in the space of menstruation care have exploded, as well as investments in this model, since the pandemic, since massive supply chain disruptions greatly affected CPG companies like Procter and Gamble (P&G) the leading company in the global feminine hygiene market, which owns the brands like Tampax and Always, leading to consumers hoarding menstruation care products and serious gaps in brick & mortar stores. Thus, making subscription-based period care boxes an attractive alternative in terms of reliability and consistency (CB Insights, June 2020).
Personalized subscription-based boxes are not new, companies like Birchbox (beauty), Stitch-Fix (fashion), and HelloFresh (food) lead the path in their respective fields. However, with respect to menstruation-care, companies like Aunt Flow, Cora, and August have moved beyond just offering period products in a box to partnerships with reproductive care providers, wellness opportunities, and the creation of their own blogs to provide a more comprehensive model of menstruation care – one that includes increased opportunities for education, reproductive justice activism, and improving the overall wellness of their consumers. This is what differentiates D2C menstruation care companies and makes them so disruptive, as they have tapped into the population of people who menstruate who care more-so about what is in their period products, how it effects the environment, and overall, how to take-care of themselves and others, compared to traditional offerings which allow you to pick-up a streamlined set of period products in any grocery aisle.
Companies like Walmart and Target have recognized the potential of these disruptors and have started to create partnerships with D2C period care brands. This allows for the wholesale retailers to tap into a younger consumer base as well as providing period care brands with opportunities for expansion beyond the D2C model.
Part B: Literature Review
Subscription-based boxes is an outgrowth of the shift toward e-commerce in recent years. Research has shown that approximately “15 percent of online shoppers have signed up for one or more subscriptions to receive products on a recurring bases – frequently through monthly boxes” (Chen et. al, 2018). Venture capital investments have fueled the start-up craze to provide consumers boxes from everything relayed to shaving products to wine and beer, to contact lens and ultimately to feminine products – in 2020 the global subscription box market totaled 18.8 billion according to an IMARC study done in 2020. This strong growth has only been compounded by the recent pandemic, as “subscriptions have been able to offer predictability and convenience”, and many box brands have used this time to further innovate (Digital Media Solutions, 2021). The growth of these boxes has attracted established consumer brand manufacturers and retailers and the industry has seen significant merger and acquisition activity (CB Insights, Feb 2019).
So why, exactly, beyond reliability and convenience do industry experts think there is so much growth within the D2C subscription-box field even while these startups are competing with, and ultimately being acquired by traditional retail giants? CB Insights analysis on the success stories in D2C boxes attributes it to 1) simplicity being key, and the new luxury when it comes to product design – people are willing to pay more for a few, hand selected, high-quality offerings (Krockow, 2018). 2) Building an audience & following being key for product launch – companies like Aunt Flow, Lola and August have built a reputable and consistent online following via social media and promote their newer boxes consistently through these outlets so to build up the “hype” before product launches. 3) providing a great customer experience – again, D2C subscription-based companies regularly provide people with a highly personalized experience, from everything like the creation of unique boxes via surveys of consumer preferences like Birchbox or Care/of (a pill subscription company), or the establishment of modes of communication to that allow companies to directly engage with user feedback (Instagram, TikTok, community forum pages). 4) “ubiquity and virality” being crucial for sales of physical products to take off – like harnessing social media through the use of influencers and “try-on” boxes from Warby Parker that allow users to purchase a box of eyewear specifically for the purpose of selecting their newest glasses & sunglasses. (CB Insights, December 2020). While these are all factors that contribute to the success of individual subscription-based companies, the question becomes whether these boxes can scale, long-term.
One of the biggest difficulties in the industry of e-commerce subscriptions is the high-churn rate. It is reported that approximately 40% of e-commerce subscribers have canceled their subscriptions – and these rates are similar across the three categories of replenishment, curation and access subscription services. CB Insights states: “Consumers are quick to cancel services that don’t deliver a superior experience — for example, because of poor product quality, dissatisfaction with the assortment or a lack of perceived value” (CB Insights February 2020). Ultimately, this makes it such that subscription-based e-commerce companies need to do practically everything right to ensure that users do not click the dreaded un-subscribe button.
Turning now to look specifically at the landscape of the reproductive healthcare field, approximately 32% of e-commerce subscribers subscribe for the purposes of replenishment – which includes things like period products. We must look at the drivers of women seeking out subscription-based period products as opposed to going to the traditional convenience stores. Industry experts state that: “The cultural backdrop to this innovation has been the growth of activist-led, ‘period positive’ movements against menstrual stigma, and high-profile campaigns to tackle period poverty” (Sagentia Innovation, 2021). Indicating that the foray of subscription services into reproductive care and specifically menstrual care aligns well with the cultural shifts occurring in the world today, ie reproductive justice, decreasing stigma, and an overall awareness for women and their bodies. The source continues and writes that “growth in this sector has largely been driven by forward thinking, female-founded start-ups, seeking to fill gaps in the market with products designed by women, for women”. There is consistent agreement among other industry experts that the shift to subscription-based services of menstruation products has largely been driven by women themselves who are identifying the industry gaps that they’d like to see in their own care. However, interestingly, one of the first movers in the industry – Ro forayed into subscription-based services for women as a result of the success they had in services for men (Reader, 2021). Regardless of whether it is a wish to destigmatize and make women more of a priority in innovative spaces or just the sheer expansion of the market and desire to acquire market shares – industry leaders agree that subscription-based women’s healthcare products, like menstruation are developing and developing fast.
Beyond the desire for female innovators to bridge gaps for women in current subscription-based offerings– what are the driving consumer desires for subscription-based menstruation products? For many women, given that they use approximately 16,000 tampons in their lifetime, according to the National Center for Health Research, knowing that their tampons, pads, applicators, and plastic wrappers end up in landfills, sustainability has become a big priority when selecting their products (Dudley, 2018). According to Greenprints latest study Business of Sustainability Index it was found that nearly two-thirds of Americans are willing to pay for more sustainable products (Greenprint, 2021). Furthermore, it is found that an increasing number of consumers care not just about sustainability but also transparency with respect to the products they purchase. Thus, given that big brand menstrual product retailers have come under scrutiny for their lack of focus on sustainability and development practices, industry experts believe that the shift toward subscription-based boxes is largely due to increased marketing of these products as “100% organic” and the transparency in declaring the materials used as these newer brands have included in their mission statement. It is important to note that certain experts have also identified that the scrutiny place upon bigger menstrual product brands is unjustified with respect to material use: “There’s no medical data that would support the use of organic tampons or pads,” said Dr. Taraneh Shirazian, an Ob-Gyn at NYU Langone Medical Center, in an interview for New York Daily News in 2015, and that “statements about toxic chemicals from companies like Seventh Generation and Honest are marketing tactics disguised as activism and consumer advocacy” (Engel, 2018). Whether or not women and people who menstruate find themselves concerned with the debate of organic being better than non-organic – personalization of products, convenience, and added benefits within the subscription-based boxes continues to be the largest driver of consumer preference for these newer brands (Sagentia 2021).
As we have seen, while industry leaders project the subscription box platform to continue to grow as a means of e-commerce, will we continue to see growth in the space of menstrual products? Some experts have identified the increasingly crowded nature of the market – “challenge facing businesses in the subscription economy is the sheer volume of subscription options out there. In a 2019 survey by Fetch, 75% of respondents reported that the variety of options made it harder to choose a subscription, while 40% stated that they planned to reduce the number of subscription services they subscribed to” (CB Insights Feb 2020). While this indicative of growth in number of businesses to usher in a new era in menstrual product care – the worry now becomes how D2C menstrual care companies can come out on top and capture a majority market share.
Part C - Examples: Lola vs Rael
Approach to Innovation Trend:
Both Lola and Rael are two big competitors in the space of D2C menstruation products via subscription-based boxes. Lola’s mission statement reads: to start a conversation about what’s in the products women use, and to provide a simple and natural alternative to what’s on the market today. Our aim is to give women peace of mind about what they’re putting in their bodies each month” (MyLola.com/About, 2021). On their website they’ve also touted their focus on giving back with respect to reproductive justice and using materials that will have a significantly lower carbon footprint as compared to big box retailer alternatives. Rael’s mission statement reads “our goal is to improve women’s life through holistic feminine care- innovative, natural, and effective solutions for all aspects of her cycle and life. Making periods better for women everywhere [through] clean non-toxic, high-performance, K-beauty science, sustainable solutions.” (GetRael.com/About, 2021). In comparing the mission statements of these two companies to that of the incumbent brands Playtex and Tampax, both Rael and Lola emphasize improving upon the current standard of care provided to women using sustainability, holistic care, and “clean materials”. Both Lola and Rael produce 100% organic cotton products. Therefore, at the root, their approach to the innovation trend is similar in terms of core product offering but manifests differently with respect to the frequency of shipments, brick & mortar locations, additional add-ons provided to the customer, and the communities that they foster via their blogs, social media, and online presence, as will be described later.
Product Experience:
Lola: Lola has been recognized as a “disruptor” and while their products are not revolutionary it is the product experience that has led Lola to become an industry leader in the field D2C menstruation product care. At the core, Lola provides four types of tampons, each with different absorbency, which goes from light all the way up to super plus – with a standard 18 count box of tampons $10/month with an annual $20 subscription fee. The tampons can be provided with or without applicator - $9 without applicator. The box can be customized where you can have from all type of tampons to just one or two depending on personal preference. The box ships every three months and selections are recorded for recurring purchases if desired. Beyond this, Lola has expanded to provide pads, liners, menstrual cups, daily multivitamins, lubricant and now even bundles such as: period essentials, value packs including discounted bundles of tampons and pads, and heating patches. Going even further than this – they have now introduced new lines of products within the realms of sexual health, fertility and pregnancy, and vaginal health that can be added to users personalized boxes. Their product offering is immense – and a bit overwhelming, however consumers have reported their deep appreciation for these lines as it makes it easier for them to get all their reproductive health needs in one space.
Beyond their product offering – Lola’s product experience is more about the community that you buy into. Lola has stated that its goal is to create relationships that last a lifetime. They receive 1000+ emails per week from customers about personal topics, often asking questions to the team via social media before consulting with a doctor. To reward the customers for their loyalty Lola’s team goes above and beyond to make sure their products are rushed to women wherever they need them. There have been user testimonials about the Lola team sending tampons to a customer’s hotel via Uber, to overnighting condoms so that they arrive in time for a honeymoon, Lola works overtime to create a memorable experience. For many younger customers and their parents, their ongoing relationship with the brand starts with Lola’s First Period Kit. After posting a video where Lola founders told their first period stories, they were inundated with moms reaching out to ask if they offered products for teen—demonstrating their ongoing dialogue with customers driving product development. For their most recent launch of Sex by Lola, they sent 100 loyal customers mailers of their new products. It was an easy way to get feedback while rewarding loyalty (Kustomer, 2019).
Rael: Compared to Lola, Rael does not have quite the product experience – however they do provide a wide range of products beyond menstrual care – their standard 18 count box of tampons cost $7 per month. They provide their own line of K-Beauty product offerings which has become all the rage in the U.S. market to add to the monthly subscription service. They also offer vaginal wellness products related to “Washes & Wipes”, re-usable underwear and pads, heating patches, acne, and skin care, as well as two sizes of tampons and two sizes of pads. They attribute their ability to provide so many different products to their connections to Korea, allowing them to find factories that allow Rael to be “nimble” in their product offerings, revisions, and fast-paced deployment. On their website they also have blog to provide users with advice from everything related to menstruation to skin care and frequently asked questions submitted by users. Uniquely, Rael has a “Rael Movement” page that allows users to receive period products for discount pricing to stock their workplaces with these goods if they input their demographic info and where they work. This is an interesting tactic that harnesses the power of users to snowball their product offerings beyond boxes delivered to people’s houses. Finally, it is important to note that Rael is offered across 19 countries! That is starkly different than Lola – as they only ship to the “contiguous United States”.
Commercialization:
Lola: Lola primarily functions as an e-commerce platform that is available for users to subscribe to via their website. However, pre-pandemic, Lola struck a massive deal with Walmart and is now offered on their shelves and the Walmart website; Lola is reported to have sold 10 million period products to by October 2020, approximately 8 months post-launch. This is interesting, as what started out as primarily a D2C company has now shifted its focus to traditional brick & mortar stores. Their partnership with Walmart has helped increase brand recognition making it the leading provider in period products beyond Tampax and Playtex. Walmart’s decision to partner with Lola has proven to be incredibly beneficial for them as it allows them to tap into a younger demographic that it not typically seen purchasing from them. Additionally, during the pandemic, when people began stocking up and hoarding period essentials – people also turned to Lola via Walmart which only diversified streams of revenue for both Lola and Rael.
Rael: Like Lola, Rael primarily functions as an e-commerce platform that is available for users to subscribe via their website. However, it is important to note that Rael started, and launch first on Amazon. This was a clever tactic as it piggy-backed off an existing e-commerce platform that is widely used by users across the globe. They launched in September of 2017 on Amazon, and within two months were out selling industry leaders like Tampax, Playtex, and Always. Furthermore, since Amazon allowed them to be accessible to a wide range of users, they studied the feedback consumers were giving and implemented changes in response to them.
Problems:
Lola: Lola has recently been embattled in a lawsuit that threatens to devastate their reputation. According to the Class Action Lawsuit: Manson v. ALYK Inc., Case No. 7:21-cv-05688, in the U.S. District Court for the Southern District of New York, plaintiffs allege that Lola’s tampons do not have a protective coating to stop them from shedding inside consumers (Edwards, 2021). Allegedly this issue has affected dozens of consumers, at least, with the complaint including examples of 30 reviews pulled from the company’s website, detailing how the tampons have fallen apart inside of people. This issue can lead to vaginal infections, irritation and injury and is a great cause for concern given that Lola’s mission statement is to protect women and consumers against these very issues. Additionally, between both Lola and Rael – the question is whether organic period products are truly better for you than what is currently provided on the market. Both Lola and Rael stand to lose consumers after reading reports that debunk claims that organic cotton period products are equally beneficial compared to current market standards consumers may feel ripped off and unsubscribe from these products. Finally, since Lola is not offered on the global market – they stand to lose their market share of the global market and eventually the U.S market, due to immense competition in the menstrual product space.
Rael: Since Rael does not provide as great of a consumer & product experience as Lola does, they stand to lose consumers simply due to churn, as stated previously, user experience is the biggest determinant to churn faced by subscription-based companies. Furthermore, they lack brand recognition in comparison to Lola, at least in the U.S so they must come up with innovative ways, at least beyond Amazon to capture more of a market share. Likewise, as stated earlier, there is doubt as to whether 100% organic cotton period products are truly better for the consumer, so they stand to lose consumers if that is the sole reason, they decide to purchase the product.
Part D: Analysis
Use of D2C Menstrual Products – The trend, explained.
Positive externalities: One of the primary reasons subscription-based menstrual care product boxes are thriving is due to the positive externalities associated with these types of purchases. Consumers who purchase these boxes are buying into a community that is supporting a plethora of women’s rights causes like reproductive justice and equity, awareness regarding periods ie. decreasing stigmas associated with menstruation as well as environmental benefits through the development of products that sustainable and biodegradable. In addition to women’s rights, buying into these communities means that consumers have the opportunity for continued learning, as many companies in this market have blogposts to provide explanations, responses, and stories related to frequently asked questions regarding reproductive health. Furthermore, as outlined in both Lola and Rael’s examples, the D2C model allows for greater interaction with consumers wherein they have a direct impact with their feedback on the types of products they’d like to see in the future – which makes consumers feel more valued and as if they have a direct role into the development of products and the progress of the company. Finally, the large majority of companies in this market have intertwined wellness, sexual health, alongside menstruation care meaning that this model provides users with benefits beyond the original goal of supporting their reproductive care.
Low Transaction Costs (Coase Theorem): The D2C model lowers transaction costs for both the consumer and company – indicative of an economically efficient outcome. For consumers, transaction costs are lowered as delivery of menstrual care products at their door provides them with the guarantee of reliability and flexibility and allows them to forgo the costs associated with hunting down menstrual products or taking time out of their day monthly to replenish their stock of products. Furthermore, the educational aspect and commitment to transparency of these companies lowers transaction costs for consumers in compiling information about what is in their menstrual care products, the lasting impact of their use of mainstream products on the environment, and even costs related to finding out information about their own reproductive health and wellness, as consumers would otherwise turn to their doctors and the traditional healthcare system. This is also the case with respect to the personalized product offerings – boxes that have been compiled by companies related to “first-period”, or “peri-menopausal” provide women with exactly the products they may need without much additional effort on the consumer’s end.
With respect to transaction costs for the companies themselves, D2C is a highly attractive model as it cuts out the “middle-man”, otherwise known as traditional retailers, and turn greater margins in revenue. Furthermore, transaction costs associated with customer-acquisition is lowered when companies can catch women who are looking to learn more about reproductive care through google – these companies sites and blogs are some of the first to show up (although it is important to note that typically costs of customer acquisition is higher for D2C models than other models, so this may not be the entire reason as to why this particular D2C model has lower transaction costs). Finally, given the personalization aspect of the menstrual products and the regularity of menstrual cycles, companies in this industry are better able to predict their stock month to month and able to manage costs more effectively than those in the traditional market for menstrual products. Going digital means that companies can swiftly be able to detect user trends, analytics, and predict what consumers want and what they need (also due to ease of direct consumer feedback) – this allow companies to gather information rapidly and easier than if they were selling their products at wholesale retailers – which once again, is indicative of low transaction costs in seeking information leading to increasing economic efficiency in the industry.
Low Barriers to Entry, leads to competition: The explosion of companies offering menstrual care products is also attributed to the low barriers to entry within the D2C model, and production of menstrual care products is extremely cheap to make and margins on the products are high – large manufacturers report a 66% profit margin with respect to sanitary pads (Chen, 2014). While profit margins are not likely to be this high for smaller companies looking to produce products with cotton rather than rayon (traditionally used in mainstream period products) we can assume that the average profit margin is still likely to be higher than in other industries. Thus, competition is driven by such low barriers to entry and the lucrative nature of menstrual product production and direct distribution.
Elasticity of Demand: One of the most important factors to consider regarding the growth of this industry is the growth of a population who has an increased willingness to pay for products that are marketed (and proven) to be more environmentally friendly, made by women for women, and tied to wellness and social justice. This is because, for these consumers, the choice of menstrual care product goes beyond what’s available, they are no longer indifferent to the generic brands provided by wholesale retailers – instead they value choice, quality, and benefits beyond themselves.
History:
The subscription e-commerce model first came to market in 2011 (Chen et.al, 2018), where it was valued at merely $57million. It has grown at a rate over 100% over the last five years, and the global value in 2020 was $18.8Billion (IMARC Group, 2020).
The first mover in the industry related to D2C menstrual care products was Juniper, which happens to remain the priciest of the subscription boxes offered today. It launched in 2013 and HelloFlo followed shortly after which outcompeted Juniper since it halved its pricing – from $28 per month to $14. Then came Le Parcel, which, true to its name, provided each box with a small gift of chocolate and surprise each month – being the first to appeal to the additional offerings and harness the novelty of each delivery. Le Parcel sat between Juniper and HelloFlo at $15/month (Stern, 2013).
In 2015, Lola became the first mover in the industry with respect to 100% organic cotton menstrual products – they also were able to drive down their prices the most during this time. The focus on sustainability and affordability allowed Lola to become an industry leader with now over $43.8M in funding since then. The industry, thereafter, exploded and soon companies began to build upon 100% organic cotton products and add further specializations – like AuntFlow, which came in 2016 for example, decided to focus on subscription-based boxes to universities and businesses, and Rael which came in 2017, and involved a Korean skin care beauty line. And finally, proving that traditional CPGs started buying into the trend, On February 5th, 2019, P&G acquired This is L, a Y Combinator-backed startup. This is L started distributing condoms initially in 2015 and later expanded into feminine hygiene products in the US and then internationally. Its products are now in more than 5,000 stores (CB Insights, Feb 2019).
Problems:
Scale: Given that the companies entering the market are relatively new, it is difficult to ascertain the scale of their production. However, knowing that subscription-based companies face challenges related to high-churn rates, which in turn makes it so that they have higher costs related to customer acquisition and retention, companies may be facing problems related to scaling their growth. Since there has been an influx in investment related to menstrual hygiene companies as well, all with the same mission, it begs the question whether the entire industry might be a bubble, and therefore would have devastating effects in the economy.
Expensive: Given that subscription based menstrual care products compete, in terms of pricing with conventionally offered menstrual products, and are sometimes even higher, it is important to recognize that this excludes a large segment of the population that cannot even afford quality menstrual products to begin with. There’s already public discourse about how period products are taxed unfairly, and when consumers are unable to buy in bulk or from wholesale retailers and instead must buy from convenience stores it imposes significant hardships on low-income women. Thus, the costs associated with menstrual products provided by these newer D2C companies are prohibitive to a large segment of the population from obtaining the benefits it touts.
Misleading Information: As mentioned earlier, companies in this industry have stated how their products are inherently better for consumers than traditional menstrual product brands. Multiple reproductive health care providers have come out against these statements and have further explained how it is dangerous to promote false claims, as consumers may subsequently not be as careful when using the products leading to well-known reproductive health issues that are inextricably linked to all forms of menstrual products: infection and toxic shock syndrome. This poses a threat to society as, while these companies tout increasing discourse and educational awareness with respect to menstruation, reproductive care, and transparency with regards to their own products – this can lead society to falsely believe all their claims without consulting with their providers.
Not Yet Executed:
Telemedicine Connections: One of the main areas that D2C menstruation care product companies can expand is in offerings related to telemedicine. Telemedicine has seen record-breaking growth since the onset of the pandemic – global telehealth investment rose for the fourth consecutive quarter at the end of Q’21 with a record high of $5B across 163 deals. Since telemedicine and subscription-based boxes function on the same model in providing care and experience directly to the consumers – these companies should investigate partnerships with reproductive care providers and therapists/psychologists as part of their product offering. This would draw a considerable uptick in the number of consumers and build trust with consumers that these-brand are indeed reputable as they have the backing of healthcare providers. While this may at first may not be economically feasible and would require considerable expense in recruiting and retaining healthcare providers to work on their team – it is important to at least consider this opportunity once companies start turning profits if they aren’t already.
Partnerships with Clinics: Another opportunity that has yet to be executed and may be a bit more feasible than before, would be partnerships with clinics in areas with populations that companies have yet to acquire. Strategic partnership with healthcare clinics will help make customer acquisition costs more targeted with respect to the communities they’re missing rather than just through advertisement and further establish trust with these communities and populations. This could function in the same way that medical sales works where a representative from the D2C menstrual product company can pitch the healthcare provider and persuade the healthcare provider to offer it in clinic as an option in menstrual hygiene management for their patients.
Impact of Pandemic:
The impact of the pandemic has been far-reaching for companies in the D2C menstrual care product industry. With menstrual products being characterized as an essential product, when lock down began, consumers stocked up on these goods (panic hoarding to be more precise), leaving many wholesale retailers and convenience stores without stock. This proved to be beneficial for the new companies in this industry as consumers turned to alternatives, and now preferred a more regular and reliable subscription to menstrual care products. Furthermore, companies like Target and Walmart established partnerships with the newer companies as a means to diversify their stock and increase their reach with respect to a younger consumer population. These partnerships also allowed traditionally D2C companies to diversify their channels of distribution allowing for increased streams of revenue. The pandemic also shifted consumer preferences, more and more people began to focus on their wellness which provided a unique opportunity for these companies to rapidly adapt and introduce wellness offerings in addition to their existing core product. The pandemic only solidified D2C companies in the field of menstrual products and contributed to their growth.
Future of Trend:
Reputable Development of Products that are better for you: As mentioned earlier, given that both providers and now consumers (referencing Lola’s class action lawsuit) have begun to pinpoint false claims about and faulty production in the products of some companies, it is critical that existing and new companies get in front of this controversy before this threatens the whole industry as pseudo-scientific. While in certain cases, like the company Goop, pseudo-science does not seem to bother many consumers, it is more than likely that these are consumers who can afford to believe false claims – ie the wealthy elite. Therefore, for companies to continue building trust and eventually capture a majority market share in the space of menstrual care products, they must prove that their products are better than the alternative. This can be done through continued R&D and potentially the creation of a proprietary blend of fibers rather than just 100% cotton. While this be expensive in the short run, long term gains will include capturing the U.S market and beyond, since no one other company is focusing here, and consumer preferences have shifted drastically toward wellness and health admist the pandemic.
Expansion, globally: D2C menstrual care kits have grown exponentially in the U.S market, but now companies must focus on their growth abroad. India and China are the two biggest markets for expansion in the field given that they are the most populous countries with, also, the greatest number of people who menstruate. Global expansion would require research and development of period products and additional offerings that are more in line with the cultural norms and standards. For example, in both India and China, there are holistic forms of medicine (Ayurveda and Traditional Chinese Medicine) that are widely valued and respected by their populations. Therefore, companies can begin to offer, in the boxes, traditional medicines or supplements thought to assist with menstruation, as a means of showing cultural sensitivity but also attracting customers. Existing brands in the U.S may be able to reach these markets via Amazon or Alibaba, but only after they iterate their products to be applicable to these markets.
Currently, D2C menstrual management companies are beginning to develop in India, like the PinkBox (PinkBox: Collections, 2021). However, analysis of their website is indicative that they use 3rd party products in their boxes rather than development of their own products. This provides a unique opportunity to capture the market in India if existing U.S based companies can leverage their own products with some additional offerings specific to India and will likely come out more profitable in the long run.
Likely Success?:
Without any reported data on whether existing companies are turning profits or not – it is a bit difficult to tell whether the rapid growth D2C menstrual care companies are contained within a bubble or not. However, given that Walmart and Target have quickly established partnerships with smaller brands than the existing providers of menstrual care products (Tampax, Playtex, and Always), these are promising indicators of future success. Furthermore, P&G has also showed their hand with respect to faith in the market through acquisitions of small D2C menstrual care companies like This is L (CB Insights, February 2019). Therefore, it is less likely that the industry is a bubble and more likely that it is beginning to saturate, as differentiation among the different products has become difficult as stated previously. New companies need to focus on user & product experience as the industry is plagued by churn. Furthermore, there are unique opportunities in the market to partner with existing telemedicine services or to begin hosting their own, that could help differentiate new companies or compound upon successes and increase market share for existing companies. Furthermore, with more news coming out related to false claims and faulty product design, there is indeed a lot of work that needs to be done in the actual development of the product and opportunities for growth abroad. Therefore, there is certainly space of new companies to come in a revolutionize the field as existing leaders, while they’ve received a lot of funding, are still plagued with basic and critical problems
Part E: Conclusion
Overall Summary:
The trend toward D2C menstrual care products is largely driven by gaps women founders have identified with respect to traditional product offerings. With a newer generation of consumers that are more focused on sustainability, reliability, de-stigmatization of menstruation, and wellness, the industry has grown rapidly since its inception. Harnessing the power of consumer feedback – companies have proven their reliability during a time when the pandemic has led to severe supply chain issues. Furthermore, the trend relies heavily upon providing consumers with the best possible product offerings and user experience. Companies have now begun to diversify their channels to market by partnering with traditional retailers, and this has helped them acquire more customers in the face of rising customer acquisition and retention costs associated with D2C businesses. Traditional CPGs have also begun to acquire these companies to get a piece of the growing market. However, the field is not without it’s problems. There exist newer reports of lack of differentiation among different companies and consumers becoming overwhelmed with the number of companies in the field. Therefore, to truly stand out, companies should shift toward proprietary product offerings and mitigate risk associated with false claims and faulty products. There is a need for continued research and advances and additionally finding ways to lower costs to appeal to low-income consumers.
Future Avenues of Research:
The main avenue of research as mentioned earlier is potentially the creation of a proprietary blend of fibers that make up traditional tampons and pads. This would help differentiate companies from one another and potentially the opportunity for market capture. This blend would have to prove to be 1) sustainable and 2) better than alternatives like 100% cotton fibers as there is no statistical significance in such products and those provided by traditional menstrual product companies. Companies could turn to products used in hospitals and the medical field for ideas in this regard.
Research also needs to be done with respect what menstrual products and additional offerings are most normalized within global communities – as companies start to shift their gaze toward capturing the global market. They could incorporate Ayurvedic and Traditional Chinese Medicine within their boxes to appeal to a greater segment of the global population. This also may mean an increased focus on certain products over others, like pads, for example since they are traditionally more widely used globally.
Coupling innovative development products with a global lens is a sure way to capture the global market.
Implications for Entrepreneurs and Policy Makers:
As depicted in the referenced class action lawsuit against Lola, entrepreneurs need to adhere to medical standards in their creation of productions within the menstrual health space. While tampons and pads require FDA certification, companies are not required to disclose their product makeup, thus there should still be some sort of regulatory measure that prevents harmful products from going to market. If entrepreneurs begin to investigate alternative fiber sources beyond cotton, as they should, they, alongside governmental agencies, should work together to identify the safest way to develop and test these products without putting people in harms way. Collaboration in this respect will only strengthen consumer confidence in the products developed.
Additionally, with increasing conversations and de-stigmatization surrounding menstrual care, policy makers should reconsider the tax placed upon menstrual products, which would help bring down the prices of D2C menstrual products alike. Michigan recently announced that menstrual products will no longer be taxed (Vakil, 2021), allowing for a greater number of women and people who menstruate, to reap the benefits of safe and dignified menstrual care as well as new, innovative products being brought to market in this space, daily; thus, other states should follow Michigan’s lead.
Finally, policymakers should consider privacy issues and data compliance as these companies collect data on consumer preferences with respect to their healthcare and submit sensitive information and questions that may not want to be easily accessible to others. This may require new conversations regarding how HIPAA may play a role in these new industries crossing over between healthcare, e-commerce, and technology.
Part F: References
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