By and  on April 20, 2007

WEST WINDSOR, N.J. — Mass retailers are out to prove their mettle in the world of beauty. Bolstered by exclusive offerings, hard-to-find brands, premium products — some of which have been plucked from their upscale counterparts — and tailored marketing messages, a number of retailers have broken the template for selling beauty in the mass channel.

Their efforts have succeeded in boosting dollar volume in the category. After five years of sluggish sales, cosmetics sales gained 6.9 percent to $979.4 million from $911.8 million, excluding Wal-Mart, for the 52-week period ended Jan. 28, according to Information Resources Inc.

Industry experts attribute the stronger sales increase to mass retailers' efforts to distinguish their mix from the competition and establish their stores as a true beauty destination. That agenda began in earnest five years ago with retailers peppering their assortment with exclusive beauty brands, consisting of niche imports and private label efforts. It has since evolved to full-fledged merchandising concepts, many of which tout exclusives from abroad, that rely on impressive in-store displays and marketing support.

These newly emerging dynamics will surely be the subject of conversation as the National Association of Chain Drug Stores' annual meeting gets under way Saturday in Scottsdale, Ariz.

"What's happening is that mass retailers are trying to get out of selling commodity products at discount prices," said industry consultant Allan Mottus. He noted that each mass retail channel — from drugstores to discounters — is attempting to carve out its own strategy for cosmetics. "Each drugstore chain is trying to be different from one another, and in general, they don't want to look like a supermarket or a discount store," he said.

Harvey Alstodt, president of Del Cosmetics, nodded to the merchandising strides, saying: "We find that retailers have a better understanding of their consumers than ever [before]."

That fine-tuning has resulted in very different mind-sets of shoppers, said Wendy Liebmann, the founder of WSL Strategic Retail. In five separate studies, Liebmann probed the characteristics of customers at certain retail chains. For instance, she found that Walgreens' customers were the most cautious about spending money, while CVS' clientele have the highest expectations in the market. Shifting to discounters, she commented: "Target's typical consumer is one who does it all. She manages a home, family and a career, while managing to shop a lot."

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