By  on September 28, 2007

NEW YORK — One reason some big beauty players passed on the National Association of Chain Drug Stores Marketplace meeting last June was that with a shrinking industry, executives felt they could get more impact from headquarter visits, according to a number of vendors.

The value of trade shows is often debated — in all industries. But the mass market, the chain drug industry in particular, is struggling with how to balance the importance of attending the plethora of industry events with staying home and minding the stores.

In 1996, 10 chains produced the bulk of industry sales and America was dotted with stores bearing names now gone from the landscape such as Thrifty, PayLess and Revco. Now, three major drug chains dominate sales — Walgreens, CVS and Rite Aid.

Manufacturers can cover the bulk of drugstore beauty sales via sojourns to Deerfield, Ill., Woonsocket, R.I., or Camp Hill, Pa. Add in journeys to Bentonville, Ark., for Wal-Mart and Minneapolis for Target and a big chunk of the category can be sewn up.

"We do not attend nearly as many trade shows as in past years," confirmed Tom Winarick of Prestige Cosmetics. "Prestige has not attended NACDS for the past four years. The nature of the business has changed dramatically and open-floor trade shows are just not the forum to introduce new programs and have serious conversations," he said.

He added that each chain today needs individual attention rather than a cookie-cutter approach. "We visit all of our chain accounts several times each year."

Winarick isn't the only cosmetics executive with a lot of frequent flyer miles. David Russell, vice president of cosmetics sales for Coty Beauty, also said he tries to see each and every account — no matter the size or locale. While sales representatives are often in the offices of chain buyers, the shift away from trade shows suggests the top management would get out into the field, too.

But that's not happening across the board, said buyers and suppliers. Some chains said they are not getting enhanced personal service from beauty firms, while many other chains said they are seeing top management at "sufficient" levels. The amount of visits appears to boil down to everything from the locale to the size of the chain. One retailer even joked that she had many more visitors when she was in a warmer climate. A few small retailers said they never see a representative.The size of the vendor can determine the level of the meeting and the number of visits. Sometimes small firms make more visits to try to catch a big sale. These firms often send in the top person for impact. Companies with new initiatives are also frequent flyers.

The nature of the meeting is key, too. Top management will rarely meet with a beauty company unless it is a huge, multimillion dollar launch. "Not all new products require the same amount of resources and support," explained Walgreens vice president of purchasing David Van Howe, at a meeting during Marketplace.

An executive from one of the big three said her company is pleased with headquarters activity from the major beauty players and that some firms have established satellite offices nearby. Still, she expects to increase trade show visits. And, there are many buyers who said they've never seen the top executive of some beauty operations.

That puts the ball back into getting to the executives at trade shows such as NACDS and Effective Collaborative Retail Marketing. The NACDS Annual meeting is still revered as the ultimate in putting together top-to-top executives. "They get to schmooze there," said one source. "If the sales representative calling on you is competent, you don't always need upper management," he noted.

Jim Whitman, senior vice president of meetings and conferences for NACDS, said the association is "continuing to put together programs for Marketplace 2008 that will benefit retailers and manufacturers, and demonstrate how the cosmetics segment is continuing to grow within our industry."

Marketplace has been more problematic in recent years. The growing success of ECRM, although a different format, did encourage some vendors to divide up their trade show allowances differently. Several chains said they are pledging to help rebuild Marketplace from a beauty vantage point. "They admitted it was broken and we want to help them fix it," said one source. In recent years, NACDS has added one-on-one meetings that have been a boost to small companies that used to get lost on the trade show floor.

The most recent ECRM was light on retailers, according to some manufacturers. ECRM has splintered into so many shows, however, that retailers have to divide it up. Walgreens, for example, can use category meetings such as over-the-counter drugs for a full year's planning. That is more challenging in beauty where there are more fashion and new product breaks.Charles Bowlus, president of ECRM, said he has not seen a decline in attendance. He said capacity has been increased at the two cosmetics shows. In February, cosmetics will be a four-day event with 125 suppliers, an increase of 5 percent over the same show last year. He noted that the July meeting is typically "lighter" than February. "Some of the larger chains are working on earlier lead-times so we are starting to do earlier boutique events for a smaller number of larger chains, while keeping the later dates preferred by the majority of chains. We limit participation in the boutique events pretty much to the retailer's invitation list, so these events are smaller on both sides of the table," he said.

To cater to the financial needs of midsize and small companies, Bowlus said he is grouping category-specific events in the same week at the same hotel. "This strategy will reduce trips for the small or midsize chain by 30 to 50 percent and enable us to space more time between the shows." He sees potential to entice retailers with some innovative new suppliers in the spa, professional and global markets. "We do expect to change up the mix of suppliers," he said.

If a retailer can't get the head honchos to their headquarters and can't travel to too many trade shows, they can use the ultimate secret weapon. "When all else fails, give them vendor of the year. They swoop in for awards," concluded one source.

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