FGI Panel Explores Retailing Strategies

Debbie Murtha, senior vice president of cosmetics for Macy's Merchandising Group, issued a call to arms during a recent Fashion Group International beauty...

Michael Henry, Debbie Murtha, Sherry Lay, Linda Carroll, color insight manager for Ampacet, Jane Hertzmark Hudis and Karen Young.

Michael Henry, Debbie Murtha, Sherry Lay, Linda Carroll, color insight manager for Ampacet, Jane Hertzmark Hudis and Karen Young.

Robert Mitra

Debbie Murtha, senior vice president of cosmetics for Macy’s Merchandising Group, issued a call to arms during a recent Fashion Group International beauty symposium for more collaboration between vendors and retailers at a time when retail consolidation is redrawing the beauty landscape in department stores.

This story first appeared in the May 16, 2008 issue of WWD.  Subscribe Today.

“‘Integration’ and ‘collaboration’ have to be the operative words,” she said of efforts between vendors and retailers during the event’s panel discussion. “‘Them versus ‘us’ has to be eradicated — we have to be in [concert]. This hasn’t been the case.”

The panel, which also featured Michael Henry, senior vice president of beauty merchandising for HSN; Jane Hertzmark Hudis, president and founder of Beauty Bank, and Sherry Lay, vice president of product for the Body Shop, was moderated by Karen Young, chief executive officer of The Young Group.

Murtha noted that as an 850-store retail chain, “we are not as nimble as we’d like to be,” but that Macy’s has a good “platform for initiatives” like its lifestyle center stores and its My Macy’s strategy, which calls for merchandise assortments that are based on the preferences of consumers in a particular store’s local market.

While maintaining a national strategy, said Murtha, it is imperative to “remain sensitive to customer needs on the local level.”

Additionally, “We have to nurture new brands. We have a broad range of consumers, a 25 to 54 [age] demographic, so we’ve attempted to do things with small vendors. The major [brand] partners will still be major, but diversity is a major focus.”

She pointed to the planned October opening of a 140,000-square-foot Macy’s store at the Shops at Wiregrass in Tampa, Fla. that is expected to provide “a different environment” for the distribution of key businesses, like cosmetics.

Normally a 120,000-square-foot store would allow for about 5,000 square feet for cosmetics, but at Wiregrass, Murtha said she anticipates being able to devote 7,500 square feet to cosmetics.

“This will allow us to distort brands and allow new brands to come in — different ways of merchandising,” she said. “The environment will be interactive. [Such formats] will present us with a lot of opportunity in fragrance.” Following the panel discussion, she said, “It will allow vendors not in larger stores to get a foot in the door.”

Also, while brands will be identified, the format won’t include vendor installations, Murtha noted. “We’ll take elements that are consistent with the brand’s DNA, but there will not be silos, like today. It will be accessible, interactive [without] case lines.” There will be cross-selling and cross-educating, she added, and there will be parity in terms of the space allocated to brands. “Smaller brands will have comparable space [and] look the same as the big three.”

The goal is to create a more productive department, according to Murtha, who added that the concept is also intended to be more cost-effective for vendors. She noted that similar Macy’s formats are planned for Sacramento in 2009 as well as locations in Arizona next year and Texas.

The concept seems well-timed, considering that during her opening remarks, Young noted that niche and alternative beauty brands account for 30 percent of the beauty market and “are growing fast.”

Young also said that $1 billion in beauty sales was done on TV last year, a number that is growing 25 percent annually.

Henry spoke of technological developments at HSN, including a test program designed to allow consumers to make purchases on TV via a remote control. Because sales have increased by double digits in the program’s test markets, “We’re going to be rolling it out.”

He also discussed beauty’s role in the relaunch of HSN over the last two years. “We have made beauty a foundation for our relaunch,” he said, adding that on HSN, beauty is given two and a half times the air time that it receives on competitor QVC.

He also noted that HSN’s relaunch has led to brand diversity, citing a “proliferation of prestige brands on HSN,” including the introduction of some 40 brands last year. Formerly, four beauty brands represented 75 percent of volume and got 75 percent of the airtime, he said. But this year, the same four brands are getting 50 percent of the airtime.

When it came to Body Shop news, Lay gave a teaser about a plan to modernize the firm’s product assortment. While she didn’t provide details, Lay said that in late August or early September, there will be a “significant initiative to bring the retailer’s products into the 21st century.”