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INDUSTRY REPORT
Health & Personal Care: 2025 year in review
Health & Personal Care brands increased ad spend by 34.7% in 2025, yet revenue declined. Strong execution and promotional activity couldn't reverse weakening demand as CPC rose 19.5% and ROAS fell 22.1%. The data reveals a critical truth: when consumer priorities shift, operational excellence alone won't restore growth.
Strong fulfillment couldn't offset demand weakness. Download the report.
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Key takeaways
- Strong execution couldn't offset demand weakness: PO Fill Rate stayed at 95% through year-end, but revenue still declined as traffic and conversion gains proved insufficient
- Promotional spend failed to stimulate demand: Discount frequency increased 2.8pp and ASP fell 8.4%, yet sales continued to contract, proving price cuts alone don't restore growth
- Paid media efficiency collapsed under pressure: Ad spend surged 34.7% while CPC rose 19.5% and ROAS dropped 22.1%, turning media investment into a cost burden rather than a growth driver
- Inventory rose despite shrinking sales: Average on-hand inventory increased 22.6% YoY, creating a mismatch between stock levels and actual demand that may pressure margins further
- Profitability compressed across the board: Unit margins dropped 3.1pp as operational costs increased and pricing power weakened, squeezing profit even as brands maintained high fill rates
- Leakage patterns shifted to competition: Lost Buy Box issues peaked early in the year while overall OOS revenue loss increased, indicating competitive threats outweighed supply chain problems
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