Eckerd Not Held Back By Bath Market Blues

LARGO, Fla. -- At a time when many mass marketers are wondering if they have expanded too far and too fast into the bath and body business, the Eckerd Drug Company is enjoying high-double-digit sales growth.

"They are one of the best in the business when it comes to bath because they understand the customer and the category," said Mark Kaplan, president of Sarah Michaels, a division of LaLoren Inc. in Stoughton, Mass. "They are a step ahead."

Eckerd, based here, made a major commitment to the bath and body department two years ago. While most mass market chains merely squeezed bath stockkeeping units into nooks and crannies in the store, Eckerd actually went through the effort and expense of redesigning its beauty department.

The bath and body department was moved from aisles near the center of the store to shelves directly across from cosmetics. To make space, Eckerd relocated the greeting card department.

Rather than create a huge boutique like other chains have done, Eckerd decided to keep the department on the aisle.

"They didn't get crazy with it. What they understood is that while many went in to 20 feet, Eckerd knew it was still a niche business that they could still do very well with, without trying to make it something it isn't," said Kaplan. At this point, 95 percent of the chain's 1,710 units have been reset to feature bath and body in the new location.

"We've given it great real estate in a prominent spot," said Carol Allman, group director for the drugstore chain.

Allman said Eckerd has been willing to place the department in a high-visibility location because of its growth potential and mass appeal.

Industry sources agreed that Eckerd's efforts have paid off handsomely.

While the industry average for bath sales represents less than 1 percent of average drugstore beauty sales, sources estimate Eckerd has been able to push its share of overall store bath sales up closer to 2 percent of beauty volume.

On the average, Eckerd had beauty sales last year of about $150,000 per store.

In most stores, an end-aisle display with the chain's number one selling line, Sarah Michaels, opens up the bath and body department. That leads to an assortment including P. Leiner's Bodycology, Sinclair and Valentine's Aromatherapaes, Neutrogena's Rainbath, Caswell-Massey II and a private label under the Paul Milan logo.Also stocked are more therapeutic lines such as Aveeno, which is actually Eckerd's number-one-selling bath sku, in dollar volume. The bath department segues into skin care, which includes L'Oreal's Plenitude, Oil of Olay and Revlon's Results. A glass case also houses prestige skin care lines, such as Clinique and Elizabeth Arden. "Prestige has been a plus for the department in the right demographic areas," said Allman. She likened the success of prestige skin care to the designer fragrances carried in all Eckerd units, sales of which have been "phenomenal."

Her only challenge is to find a method to encourage greater sales despite the fact that the items must be kept under glass. While many believe the shakeout has already commenced in the bath department, Allman sees it more as an evolution.

"We knew there would be a proliferation of lines. At this point, we're not adding anything unless it is truly different," said Allman.

One example is Zenue, a line from Sutton Pina Associates in Greenwich, Conn. Eckerd will test Zenue, which is aimed at young bath product users in the 18-to-29-year-old range, in about 600 units.

Allman believes Eckerd's average bath customer is a woman, age 20 to 45, who is looking for a way to treat herself. Not surprisingly, the number one mover in units is Aromatherapaes Stress Reducing Bath.

Challenges have also presented themselves when it came to merchandising the bath department, especially since it is a relatively new concept to consumers.

"Take Neutrogena," Allman explained. "We're trying to decide, 'How does a customer shop for Neutrogena? Does she look for all Neutrogena together, or by going to bath for bath items and hair care for shampoo and conditioner?"' Another hurdle in the bath department, according to Allman, is getting manufacturers to create promotional gift sets for events such as Christmas or Mother's Day.

"We brought in a lot of gift sets for the holidays," she said. "Many people preferred those to a single bottle of fragrance. But we found we had to do all of the work for the manufacturers in helping them create the assortments."Added Susan Lackey, category manager for the bath business, "Many manufacturers did not present an upscale look. They just put items in a basket and thought that would do."

Allman doesn't agree with those sounding an early death knell for the mass market bath category. She also thinks drugstores are well positioned to grow their share of sales.

"People don't have time to shop malls anymore," she said, adding that drugstores are a convenient shopping stop.

"I would disagree that we've hit a peak. I think what we're really seeing is a category that brings in good sales and holds space while we wait for the skin care boom, which will be the next big trend," she predicted.

Allman said two forces will shape the skin care explosion: the aging baby boomers and the onslaught of technologically advanced items such as Retin-A and alpha-hydroxy acids. The invasion of AHA's has already commenced.

She thinks there will be a shift in one more year, when bath will have to be broken out entirely separately from skin to make more room for a bevy of new skin care launches.

The beauty of the growing skin care business, she added, is that it is trading drugstore customers up to higher price points.

"We've already seen a rise from $6.00 to $12.00 with alpha-hydroxy acids," she said. She also credits Chesebrough-Pond's with boosting skin care sales with Dermasil.

"They've been very aggressive in building the business." Space to accommodate the split may come from categories losing steam, such as pantyhose. Cultural changes, including more casual dress in the workplace, have sapped pantyhose sales, she noted.

Eckerd has already made adjustments in the rest of the beauty department. For one thing, customer focus groups have pointed out a need for more ethnic cosmetics. To that end, the mix includes Revlon's ColorStyle, Maybelline's Shades of You, Cover Girl's darker shades, Posner and Tropez. Stores with a heavy Hispanic customer base will shortly receive Solo Para Ti from Pavion.

The chain also has a broad array of general market items, including Revlon, Maybelline and Cover Girl, as well as growing lines, like the products from Cabot Laboratories Inc.Despite the wide array of products to help keep customers coming to retail stores like Eckerd, Allman views other competitive formats such as home shopping channels, direct mail and outlets, as viable contenders for the beauty and skin care business.

"Our challenge is to make sure customers still want to come to see and shop our stores, so it is imperative we bring them new ideas and products that promote both beauty and health," she concluded.