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Beauty Roundup: January 30, 2009

Twenty-six percent of shoppers said Wal-Mart is the place they'd choose if they could only shop one store for the rest of their lives.

As a retailer, wouldn’t you love to have consumers say your store is the one they couldn’t live without?

A study by Zogby Interactive found the bragging rights to that claim go to Wal-Mart Stores Inc. Twenty-six percent of shoppers said Wal-Mart is the place they’d choose if they could only shop one store for the rest of their lives. Target Corp. was close behind at 22 percent. Zogby polled 24,964 voters with a margin of error of +/-0.6. Some good news for department stores — Macy’s Inc. was third. Costco Wholesale Corp. ranked fourth, followed by a three-way tie with Sears Roebuck and Co., J.C. Penney Co. Inc. and Kohl’s Corp.

One surprise — not a single drugstore made the ranking. Wal-Mart’s low prices were the main appeal, and not surprisingly, the chain appeals to lower-income households and those that are politically conservative. Target’s demographics skew younger and better educated. They are more liberal and most likely supported President Obama versus his opponent, John McCain, who was the traditional Wal-Mart loyalist.

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Costco has a stranglehold on those in the Western U.S. Sears customers tend to be older and more likely male. According to the survey, Sears has defied the expectations of many, and, for now, doesn’t look like a company on the verge of demise. In a time when money is tight, consumers aren’t looking for the fancy. They want utility, and Plain Jane retailer Sears is looking better, said the study. Sears is venturing more into beauty and that could be a good move.

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More good news for many of these merchants comes from a report that says the industry’s sweeping retrenchment is creating upward of $20 billion in sales opportunities for those who survive. Wal-Mart, Target, Kohl’s, Macy’s and J.C. Penney are among those that could be beneficiaries, according to Deutsche Bank. Companies that have many freestanding stores, like Kohl’s, as opposed to being largely mall-based, will likely pick up greater share because of shifting trends in consumers’ shopping habits.

Another study, this one from WSL Strategic Retail called How America Shops, says that “The New Shopping Order” has arrived. The study suggests that a sale is not a long-term value strategy. Here’s the rub, the study suggested: once you’ve given shoppers everything in your discount arsenal, what’s left? How do they know what real value is any more? Why should they trust you? The study warns that retailers, especially department stores, must not risk the “disenchantment of core shoppers.”

The message from these studies is simple – retailers (and manufacturers) need to understand their core shoppers more than ever in this economic climate. They need to maintain, but also reach for new ones. And, drugstore chains need to find a way to make their stores more important in consumers’ minds.

People, Places and Things

A few words with Grant Berry, creator and founder of Styli-Style. Berry is no stranger to the beauty business, having launched Pirate Cosmetics in the Eighties and Styli-Style in the Nineties. He sees sweeping changes in the nature of the business.

WWDBeautyNews: What’s happening in the market?

Grant Berry: The old 80-20 [20 percent of items produce 80 percent of sales] doesn’t work anymore. Retailers just don’t have the space to present all those items. We’ve cut back on our line to present the bestsellers.

WWDBeautyNews: Tell us about new fixtures.

G.B.: We have a pod system called Styli pods that showcase our innovative products, but can be easily used on counters or in the display unit. We also have more space to communicate product descriptions and our testers and item numbers [on the packaging] are easy to see.

What’s In Store

Sephora Goes for Three: Sephora plans to open a three-story unit in Manhattan’s Times Square. The store is expected to feature an expanded product mix not found in existing units.

Saks Gets Aggressive: Saks advertised a get-$25-off-$100 beauty purchase online with free shipping to inspire sales.