Beauty Isn’t A Bargain Basement Category
Cash registers are ringing again. March sales showed the best growth in some time. Inventories are starting to expand and a few buyers noticed a new attitude by consumers.
Mass marketers feel they are well positioned for the return to retail. They’ve spruced up their stores to keep shoppers happy, especially those who started visiting them while trading down from department stores.
A visit to new prototypes of Duane Reade, Walgreens and Wal-Mart reflect that. Better lighting, lower-profile fixtures and an inkling of better service are all appreciated by new and existing consumers. There’s especially good news for the beauty department. It seems even with the rampant cost cutting that occurred, consumers never really sacrificed on some categories. Shoppers opted for private labels in many areas and did without in others.
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Beauty, according to WSL Strategic Retail, was one where shoppers just refused to scrimp. The firm’s research found people will pay more for electronics and computers — but also cosmetics and fragrances. Fifty-three percent said they’d pay more for what they considered quality cosmetics; 52 percent for fragrances.
While shoppers don’t want to sacrifice beauty, there is a threshold of what they consider “worth” paying for — or not. They might find a $30 jar of skin care still a good value at a drugstore instead of a $100 product at a department store. Now that some consumers have tried mass merchants for beauty, the hope is they feel the choices are good enough to not move back.
How to keep shoppers who have flirted with mass will be among the top topics at next week’s National Association of Chain Drug Stores’ Annual Meeting in Palm Beach, Fla. The top-to-top industry event kicks off April 24 at The Breakers. There will be powwows with top fragrance and salon hair care manufacturers to expand the selection at mass. Also among the issues will be how to balance inventory and stockkeeping reductions with the demand for variety at mass doors. There will be a “meet the retailer” section once again at the gathering with high-visibility retailers such as CVS’ Mike Bloom and Walgreens’ Bryan Pugh. Both of these chains have upgraded beauty and it will be a topic that will undoubtedly be discussed in cabanas and poolside at NACDS.
People, Place and Things
A few words with Nancy Mills, industry manager at Kline. The research firm said nail is the new category that paces beauty — taking over from lip. Nail polish was the only category to post a double-digit increase in 2009.
Mills: Nail polish reached 14.3 percent growth in 2009 as [it] returned in the fashion world. There was also the shift from nail salons to at-home manicures as consumers skipped pricy salon visits to cut costs. Nail industry marketers also responded well to consumer demand and focused on new launches.
Mills: “The beleaguered fragrance market took an even harder hit in 2009 than it did in 2008, when we started to see serious decline. There are a number of factors contributing to this, including fragrances losing their appeal as gifts, and overcrowded selection of fragrances leading to consumer confusion. On the other hand, antibacterial hand gels had a stellar year, with sales partly boosted by the unfortunate H1N1 flu epidemic. It is evident that practical purchases and small indulgences kept the industry alive during this very difficult period.
What’s in Store
Rite Aid and Skin Cancer Screenings: Rite Aid and Aveeno are sponsoring the Skin Cancer Foundation’s Road to Healthy Skin Tour, offering Americans free full-body skin cancer screenings and the latest sun care information. “Rite Aid is proud to be sponsoring this unique tour because proactive initiatives such as health screenings are a crucial part of Rite Aid’s overall mission to help our patients lead healthier lives,” said Robert Thompson, Rite Aid EVP pharmacy.
Hello Target: Added Extras has announced the launch of the new Hello Kitty-branded beauty collection, exclusively at Target. The 38 sku line includes lip gloss, nail polish, cosmetic bags, press-on nails, hair care, and bath and body products. The prices range between $1.99 and $9.99.