It’s that time of year again, when chain drugstore executives pack their bags and head to The Breakers Hotel & Resort in Palm Beach, Fla. The setting is always beautiful, even if business this year isn’t. The National Association of Chain Drug Stores Annual meeting kicks off Saturday and ends on Wednesday. Word is that the number of companies attending is stagnant, but each chain and supplier is bringing fewer people to cut costs.
Drug chains once thought their business was recession resistant. People, they reasoned, always need pharmaceuticals. But a recent study conducted by Walters Kluwer Health found that U.S. patients did not fill 6.8 percent of brand-name prescriptions that physicians wrote in the fourth quarter of 2008 because of cost.
It isn’t just at the Rx counter — consumers are bypassing other categories. Luckily, there are a few categories in drugstores that Americans can’t live without (let’s hope deodorant isn’t negotiable).
On the flip side, there are categories expanding within drugstores, because people aren’t spending on health and beauty care in other retail outlets. Vitamin sales are expanding as people take health into their own hands. Hair color and nail care are booming as people do salon services at home. The buzz in cabanas and tables at NACDS’ Annual Meeting will undoubtedly be about the trend to do more beauty and health care at home with mass items.
Caught in the middle is color cosmetics. Women don’t want to give them up, but sometimes when forced into the mass market, they don’t find the environment hospitable.
Coty is among the companies hoping to jazz up the mass market at a time when more shoppers are popping into mass doors. The company is working on the nail care department with plans to better organize it, and the firm is working to bring fragrances out from behind glass. Coty will be unveiling these plans in its executive “trailer” at NACDS, as Coty is among the companies that have moved to comfortable air-conditioned trailers for the meeting.
The upgraded ambience in the beauty department comes at a time when drug chains have their pencils out to edit assortments. As one executive explained — chains would rather have two facings of a fast moving item than one from another brand that doesn’t turn. Productivity and turns are trumping selection at this point.
Drug chains really are at a pivotal point. Should they burnish their image and spend money redesigning? And, if they adopt stockkeeping optimization plans, at what point do they go so far that they look like any other store on the street? These will be among the issues discussed at The Breakers. At least, the rolling ocean in the background will be soothing even if the meetings get tough.
A few words with Mary van Praag, senior vice president of sales for Coty Beauty, as she gets ready for a busy schedule of meetings at NACDS.
WWDBeautyNews: Last year, everyone couldn’t wait to talk to Coty. What’s up this year?
Van Praag: The buzz really was about Coty last year and what we’d do with Del cosmetics and merging the companies. We promised great brands and we feel we’ve delivered.
WWDBeautyNews: What are your main messages?
Van Praag: The timing is right for retailers to take advantage of shoppers who are in their stores, especially by bringing fragrances out from glass. There is a potential of $100 million in lost sales. We have incredible quality scents and are committed to the mass fragrance business.
What’s In Store
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