NEW YORK — Now even small chains can have an exclusive cosmetics line.
National retailers such as Eckerd, Target and Wal-Mart have the clout to create proprietary beauty brands sold only in their stores. That’s been a difficult feat, however, for regional or small chains that don’t have the capacity to design and market beauty.
The Chain Drug Marketing Association, noting the need for its members to sell exclusive products, has created a line of cosmetics called Color Essentials. CDMA represents more than 85 small and regional pharmacy chains, 12 wholesalers and 62,000 retail pharmacies across the country.
CDMA obtained the distribution rights for Color Essentials from L.G. Household and Health’s division called SourceSarvis LLC, one of Asia’s leading manufacturers of skin care and color cosmetics.
SourceSarvis also created a private label skin care line for CDMA called Essentials for Skin, which was launched in May 2002. It has been estimated that the entire beauty private label offerings at CDMA could exceed sales of $5 million.
“We felt there was a huge marketing opportunity for our chain and wholesale members in both skin and cosmetics,” said CDMA president Jim Devine. He hopes Color Essentials will provide members with a quality line on par with department store brands.
Interest in proprietary brands seems to ebb and flow and successes are hit or miss. Some launches, such as Wal-Mart’s No Boundaries color cosmetics, had a limited audience. The jury is still out on CVS’ cosmetics entry, while Eckerd officials maintain its line, called Mira, has struck a chord with consumers. Target appears to have a hit with Sonia Kashuk, and Wal-Mart’s Mary-Kate and Ashley has been one of the few bright spots in cosmetics for young girls. However, after a burst of private label activity two years ago, chains slowed down efforts after finding it challenging to act as a retailer and a manufacturer.
With overall cosmetics sales soft, some marketers think it is time to fire up house brands again. ShopKo, in fact, just inked a deal with private label marketer Daymon Associates to develop private label beauty aids for the discount chain. ShopKo also recently announced it would open freestanding drugstores.CDMA executives also think the time is right to try to offer its members something beyond Revlon, Maybelline, L’Oréal and Cover Girl. Many of its members have extremely loyal consumers who eschew mammoth chains in favor of a small store setting. Many of the stores still have cosmeticians who can guide consumers to the new line.
Devine hopes Color Essentials will give shoppers more reasons to buy cosmetics at its stores rather than making separate trips to department stores.
The 177-stockkeeping-unit line features gold packages with black lettering. Prices range from $4.95 for a nail lacquer to almost $13 for a face powder. The gross margins are in the 60 percent range, about double most drugstore cosmetics lines.
Since the products are more upscale than traditional drugstore fare, CDMA tapped Charley Vaughan, vice president for SourceSarvis, to train members on how to sell Color Essentials. Vaughan recently conducted the first of the training programs with Kopp Drug, a 10-store chain in Pennsylvania. According to Kopp officials, the line will fill a hole in the retailer’s beauty lineup, with what CDMA hopes will be a mass alternative to Clinique.
“We are excited about this line because it is upscale. We had the Sarvis people come for training that we think will really help our employees suggest it,” said Bill Earnest of Kopp Drug, one of the first CDMA members to get the color launch.
As part of the training, store employees are brought in to test the products so they can effectively teach consumers about the line. Employees also are informed about the displays and the inventory programs. Each store will be provided with a 4-foot illuminated display rack, as well as pamphlets, samples and gift bags. “Once [consumers] try the products, find out for themselves the high quality of the products and compare the selection, packaging and pricing with department store brands, we are confident consumers will return for repeat purchases,” said Devine.
That strategy already has been a boost to the skin care line. Susan Francisco, a resident of Tribes Hill, N.Y., has become a fan of the skin care line and compares it with Clinique. Essentials for Skin was launched in May 2002 and has performed so well, according to CDMA’s category manager Susan Pritchard, that retailers are anxious to add the color products.The skin and color products are among hundreds of private label items sold by CDMA members. Devine said private label has grown 25 percent at CDMA member stores.
Experts expect other retailers to add more exclusive items over the next few months. Sources said Target is hoping to get a major teen launch, while a handful of other drug chains are exploring new opportunities.
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