The Fear Of Cutting Too Far
About a month ago, a friend of this reporter went into Walgreens to purchase a foundation she liked that balanced out her skin tones. She was dismayed to find the chain no longer carried it. Walgreens, in efforts to improve the productivity of the department, cut back lines and stock keeping units in the last year.
Wal-Mart and others have done similar moves as the recession continued to batter retail. Recently, however, Wal-Mart announced it is bringing back some items it has edited because the chain found shoppers leaving the stores for other merchants.
In the quest for productivity, some chains have drawn a line in the sand. Products with sales below a certain standard get axed. But what that this doesn’t factor into the equation is that even lower producing stock keeping units are sometimes the reason shoppers come into a store. They often buy other items while on that trip.
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What is equally surprising is that chains that cut some brands are now finding they have extra footage and are trying out other lines. If those new brands fare well that’s good news, but if they are slower movers it will further hinder the return on investment in beauty.
It is notable that a power like Wal-Mart is retrenching. Wal-Mart is returning some health and beauty supplies, cereal, pet treats, soda and laundry detergent, according to experts. The retailer said last month its U.S. stores recorded a drop in sales and had a “slight decrease” in customer traffic in the quarter that ended in January. The firm is going back to vendors and opening discussions back up.
Last year, Wal-Mart reduced the number of sku’s sold in the U.S. in categories such as laundry detergent and bedding. U.S. stores cut inventories by 7.6 percent while increasing sales by 1.1 percent. The chain said it is returning some items to the floor and that changes will be “evolutionary.”
The retailers Wal-Mart mentioned losing people to included Lowe’s and Walgreens. It has always been an 80/20 rule in beauty. One of the beauties of “beauty” is seeing rows and rows of lipstick even if you are only buying red. Sometimes the productivity of beauty is offering shoppers a well-stocked inviting ambience so they’ll buy not just cosmetics, but all of their needs from your store.
People, Places and Things
A few words with Colleen Rothschild, founder of Delicious Brands.
WWDBeautyNews: What is your latest launch?
Rothschild: We are rolling out Eclos Super Apple Skincare. I came across an ingredient from Switzerland 18 months ago. I started researching it and found there were only prestige companies using it and they were hundreds of dollars. Eclos, which means to bloom in French, has the same clinicals as the department store products which retail for hundreds of dollars.
WWDBeautyNews: You are a small company, yet surviving. Why do you think you get into chains?
Rothschild: We are always looking for something new to stay ahead of the curve. We are small so we can move quickly. We don’t have layers of management and can bring products to market fast.
What’s In Store
Classified Cosmetics: Classified cosmetics, known for its aerosol products, is adding a mass market offering priced much less than the prestige version which retails for more than $55.
On a Roll: Foundations in rollers are faring well, now Nivea is introducing a roll on eye gel for men. The Q10 revitalizing eye roller gel is engineered to minimize the look of fine lines and wrinkles, and reduce the appearance of dark circles and puffiness underneath the eyes.