By  on May 4, 2007

WOONSOCKET, R.I. — CVS Pharmacy is determined to shout its commitment to its beauty business with an ambitious marketing program that will mushroom in June from pervasive in-store merchandising to culminate in direct-mail and newspaper advertising.

The national drugstore chain will usher in the campaign, called Reinventing Beauty, by dressing its 6,200 stores in teal signs hanging from the ceiling and protruding from shelves.

The Reinventing Beauty campaign follows a four-year effort to improve the beauty shopping experience in CVS stores. Since 2003, CVS has cleared space near the pharmacy for Healthy Skincare Centers stocked with European brands; struck an exclusive partnership with the Finnish beauty line, Lumene; added proprietary lines, including Cristophe Beverly Hills hair care and Skin Effects by Dr. Jeffrey Dover, and aligned itself with Boots of the U.K.

The drugstore also continues to grow its beauty advisers program and plans to dispatch 1,000 of them to over 600 stores by the end of the year. With much of the heavy lifting out of the way, Cheryl Mahoney, vice president of merchandising for beauty care, said the time was right to tout CVS's strides in beauty.

"We focus on knowing who our customers are and what they want," said Mahoney. "The customer tells us she loves to shop for beauty at CVS."

Mahoney, who joined the chain in 1980 as an assistant manager in cosmetics, said the retailer's circular advertising, which began in the mid-Eighties, was what "started to bring beauty to life at CVS." CVS's circulars, unlike those of many of its competitors, were designed to tell a story about products and their benefits. The retailer has continued that evolution ever since, placing beauty near the entrance and rolling out its Life Format, a store layout with lower shelves to facilitate shopping for women, who make up 80 percent of its customers. "Through our consumer research, we found that our average consumer is 5 feet 4 inches tall, so we made the shelves in the Life Format 60 inches high," explained Mahoney.

It's that kind of insight, along with frequent market visits throughout the U.S. and aboard, that has helped to form CVS's approach to beauty, noted Mahoney. She added that the CVS management team, lead by chairman, president and chief executive officer Tom Ryan, saw the value in beauty because of the growth and profitability of the category.A CVS spokesman noted that pharmacy accounts for 70 percent of CVS's revenue, but said beauty was the fastest-growing piece of the business in the front of the store. CVS, which has a smaller store format than many of its competitors, has begun to see the return on its beauty focus. Last year, CVS's beauty business grew two times faster than the industry average, and its cosmetics sales grew three times faster than the industry average, said Mahoney. That kind of growth is a particularly impressive feat, considering that cosmetics is a mature business in the mass channel, said Sherry Saffert, senior category manager for cosmetics and accessories.

CVS's smaller store format requires tight editing of the beauty assortment. "Once we decide what products to get behind, we launch them in a big way," said Mahoney, adding that new products were given prominent placement in the store, highlighted in circulars and supported through Extra Care, CVS's loyal-customer program with 65 million cardholders. Nevertheless, the chain introduced some 3,000 new beauty products in the past year.

During a walk-through of a mock CVS store planogram at the company's headquarters, beauty executives said the drugstore chain was using The Big Semi-Annual Beauty Sale, a weeklong effort that began in its stores on April 29, as a soft introduction to Reinventing Beauty. The sale also promotes CVS's 100 percent money-back guarantee on all beauty products. In-store signs read, "Be 100% happy. The beauty guarantee. 100% money back."

CVS promoted the sale, referred to as "beauty days," by devoting nine pages of this week's 24-page circular to the category. The chain distributes 58 million circulars each week.

In a simulated store setup, a mock planogram illustrates CVS's beauty game plan. It includes Lierac Paris, the European skin care brand, stocked in select Healthy Skincare Centers along the West Coast; a lighted Healthy Skincare Center display, of which there are over 300; a 12-foot Boots display, which is rolling out to 500 doors and includes the Mediterranean, No7 and Botanics brands; a natural products assortment that includes BeFine, an exclusive, and Kiss My Face, and its Lumene offering, which recently added trial sizes.

"The trial-size Lumene kit brings people into the regimen," said Deb Armstrong, divisional merchandising manager for beauty care. She added, "Thirty percent of people who buy Lumene are coming from department stores," noting that Lumene's skin care products sell more briskly than cosmetics.Armstrong commented that the retailer's attitude toward adding proprietary lines, like Lumene and Skin Effects, was not a "substitution approach." Rather, CVS uses these brands to plug in holes in the assortment.

Referring to the launch of Skin Effects, she said, "When we mapped out the facial care category, we saw there was white space that we could fill with a derm line."

The Reinventing Beauty effort will be an ongoing one, said the executives.

As for what's next from CVS, Mahoney said, "Our concept will continue to evolve. We clearly recognized the link between beauty and health, and our customers will lead us in where we go next."

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