NEW YORK — L’Oréal USA is out to transform the typical American chain drugstore, which has functioned as a convenience store for much of the last decade, into a compelling beauty and wellness destination.
In 2002, L’Oréal kicked off the metamorphosis, one store at a time, with the installation of a category it calls Dermo Skin Care in Brooks Pharmacy and then CVS and Duane Reade.
The foray more deeply into serious skin care was part of the master plan devised several years ago by L’Oréal’s former chief executive officer Lindsay Owen-Jones, who turned the reins of power over to his successor, Jean-Paul Agon, on Tuesday.
After years of germination, the hoped-for expansion is now kicking into overdrive.
There are 160 of the departments that feature dermatological brands, trained beauty advisers and skin analysis. Philippe Patsalidès, L’Oréal USA’s general manager of the active cosmetics division, announced earlier this week that there will be 500 Dermo departments by the end of 2006.
Most of the departments will be in the same drugstore chains that are already participating in the program, although category killer Ulta has added a center in a store in Fairfax, Va. Patsalidès doesn’t rule out other major drugstore chains, although he admitted the model is not right for every store within a chain and not a good fit for every retailer.
“We are rolling this out in selective distribution with our current partners and with new retail partners interested in this model,” said Patsalidès. “We are using what we’ve learned to continue to adapt the model to the consumer.”
CVS, which has the bulk of what it calls its Healthy Skin Care Centers in place, is solidly behind the concept.
“We are pleased with the success of the Healthy Skin Care Centers at CVS,” said a CVS spokeswoman. “There are approximately 150 centers open to date and we are expecting to double this number by yearend. We have strong double-digit growth, and believe this program supports our customers’ needs and makes CVS a destination for these top dermatologist-tested and recommended skin care brands.”
Not only is the distribution being broadened, but L’Oréal is also expanding the product range. CVS and other drugstore chains with the derm brands will add La Roche-Posay, another L’Oréal nameplate, to its mix (see related story below).
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Separating its stores from the hordes of competitors — particularly discounters — was the original motivation of Michel Coutu, president of Brooks-Eckerd Pharmacy, when Brooks installed the first center in 2002.
Patsalidès agreed that the presence of the skin care department provides drugstores an avenue to become a health and beauty destination. The overall layout and space allocation of the skin care department in most chains has not been tinkered with since the L’Oréal installation. Most chains have three to four bays of illuminated fixtures and upscale signage.
What has improved, according to Patsalidès, is the level of training. And, he added, the L’Oréal departments work best when the effort has the support of managers.
Industry sources said most chains are looking at customers’ income levels, store traffic, sales of existing skin care products and the motivation of managers to determine which stores in the chain should get the centers.
The timing is right for the invasion of European derm skin care products, said Helena Wayth, assistant vice president of marketing, overseeing Vichy and Dermablend. “Customers are more educated, ready and interested. And they want high-end, health-oriented products at accessible prices,” she said.
That’s where Vichy comes in. Vichy Laboratories is the number-one skin care brand in European and Canadian pharmacies. The core concept of Vichy, which was founded in Vichy, France, in 1931, is that health and beauty are intertwined. The line is best known for its Thermal Spa Water, which contains a naturally high mineral content, that cannot be synthetically reproduced. Although Vichy consists of 189 products worldwide, drugstores in the U.S. stock about 50 items. Prices range from $12 to about $30. Among the best-selling items are the Lift Actif Pro, Reti-C Intensive Corrective Care, Meokine, Nutrilogie 2 and Normaderm. The consultants in the store perform services for no fee and are trained to recommend the variety of brands stocked.
In addition to retail stores, Vichy is sold on a new e-commerce site, vichyusa.com. The site offers a customized skin analysis that can be completed online.
While Vichy is the anchor of most drugstore chain derm skin care departments, there are other brands rounding out the mix that include Avène (owned by Pierre Fabre), Dermablend, Lierac and in some retailers, a proprietary brand sold exclusively at that chain.
Patsalidès is confident the U.S. market is ready for serious skin care at drugstores. In fact, he compares the market with the explosive success of similar moves made by Canadian chains such as Shoppers Drug Mart and Jean Coutu, which has similar derm centers. One reason Ulta decided to make the move is because Michael Lovsin, now at Ulta, formerly headed up beauty at Shoppers Drug Mart. And, Jean Coutu is the parent company of Brooks, which was the first U.S. chain to adopt the derm category. Although Vichy’s penetration will more than triple by yearend, Patsalidès said advertising won’t be on a national scale. Instead the investment will be made in directing dermatologists on how to recommend the products, as well as local advertising and training of beauty advisers, whom he believes will become equals to pharmacists in impact. While many customers seek advice from pharmacists about health issues, Patsalidès believes they’ll do the same with the beauty advisers.