NEW YORK -- Mass market retailers used to pride themselves on the fact that every store within a chain had the same merchandise located precisely in the same location. That's not the case anymore.
Chains including Kmart Corp. Wal-Mart, PayLess Drug Stores, The Rx Place, Gordon's Discount and Thrift Drug are now customizing their merchandise mix based on consumer demographics at each site.
"That way, they are not wasting space by selling items that won't turn in that store," said Monika Torrence, vice president of product management at Spectra Marketing of Chicago, a company that works with retailers and manufacturers to help identify stores suited for specific product launches or promotions. Many retailers have identified their stores that have higher ethnic traffic, in order to insure that those units have a wider selection of color cosmetics.
The use of point-of-sale scanner data is allowing chains to dissect each store's audience and determine which products best suit its complexion.
But today's targeted marketing goes well beyond minor changes in the product lineup. Some chains are going so far as to create entirely different store layouts for their various units.
One of the most aggressive chains with regard to targeted marketing is Thrift Drug, based in Pittsburgh. The 510-store chain has identified several different store prototypes and situates the appropriate style store in each market.
The chain opens more upscale units in selected towns, featuring prestige cosmetics and elegant bath-product gift sets. Thrift has two other designs: One emphasizes convenience products and the other focuses on health care.
Upscale markets such as Princeton, N.J., have stores that are stocked heavily with beauty and treatment items, since more affluent areas tend to sell more cosmetics and bath care, according to a spokesman for the chain. The upscale units have lines such as Caswell-Massey and Cosmyl, whereas other units may only stock mass market products such as Yardley.
Currently, more than 50 of the upscale formats are in business, with 25 on the drawing board and slated to open by the end of the year.
Kmart Corp. of Troy, Mich., has been striving to serve local market needs over the past three years.
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