BEAUTY’S ESCALATING TURF WAR
Byline: FAYE BROOKMAN
NEW YORK — As in times past, a tug-of-war is going on over consumers. But this time, the struggle is not for their hearts and minds, but for their bodies and wallets.
Now that skin, bath and body care products are available in a host of shopping outlets ranging from the local Gap to the Hallmark Greeting Card shop, drugstores, discount and supermarket retailers are caught in the middle and are looking for their competitive edge in the $3 billion market.
According to industry sources, all types of mass market outlets sold almost $800 million worth of facial moisturizers and rang up another $700 million on hand and body lotions. Chain drugstores produce about 40 percent of overall mass market skin care sales. Deep discount stores grab another 8 percent.
Discounters produce 20 percent of sales. Supermarkets and combination food/drug stores sell 25 percent of mass market skin care sales. Other outlets comprise the remaining 7 percent. The host of new contenders are hoping to steal business from mass market outlets. Although mass market operators were out of the gate first, especially in the bath category, the competition has caught up.
Department stores have carved out their own bath and body sections, or partnered with specialty operators, such as Goodebodies and H2O Plus. Hallmark recently said it will offer a six-item line called Nature’s Sketchbook.
The line will be sold in Hallmark stores and Hallmark retail accounts, which include some drugstores. The Gap has been rolling out its bath and skin care products in ultra-hip cans, and The Banana Republic is getting into the bath and body business, too. Ann Taylor recently launched a fragrance line called Destination that includes a moisturizing lotion priced at $14.50 for eight ounces; an 8-oz. shower gel, priced $12.00; a 2.5-oz. soap for $3.50, and a 4-oz. soap for $5.
Bed, Bath & Beyond, a home furnishings retailer that functions as a category killer based in Springfield, N.J., has announced plans for a private label line of bath items to be sold in its stores, starting in June.
The chain’s management feels it is a logical step since customers are buying bathroom accessories for their baths and may be inclined to purchase personal bath care during the same shopping trip. Retailers who have claimed a stake in bath already are now branching into skin care. H2O Plus, for example, is turning its attention to treatment. The firm realizes that it needs to fortify its position with products that go beyond bath.
And, of course, the industry has been further splintered by the success of bath and skin care via home shopping and infomercials. Hydron Technologies Inc. is the top-selling cosmetics line on QVC network and has teamed up with the home shopping channel to produce an infomercial. At the Home Shopping Network, Connie Stevens treatment products remain among the channel’s most popular items. Avon Products Inc., a direct marketer, continues to thrive on the success of Anew, one of the first alpha-hydroxy acid hits. Recently, Mary Kay Cosmetics introduced an alpha-hydroxy acid product for the eyes, called Triple-Action Eye Enhancer. Not surprisingly, mass marketers are finding it harder to compete and are looking for competitive edges in a crowded marketplace. “In just this mall alone, I have to compete for skin and bath with The Limited’s Bath and Body Works, Goodebodies, The Body Shop and CVS,” said Alan Jamnik, treasurer of Essentials Plus, a combination beauty salon and retailer, with six stores.He was referring to one of his stores located in the Freehold Mall in New Jersey. He noted that it is difficult to duplicate the presentation of The Limited’s Bath and Body Works in a mass market store that also sells fragrances and cosmetics. Because of the brutal competition, Jamnik has actually reduced his bath department and is stressing accessory items like loofahs and sponges. “The great thing about being a small chain is that we can get in and out of categories in a flash,” he added. Many other drugstore chains have also started to edit their bath and skin selections with an eye on reducing duplication in the mix.
At CVS, the goal is to stick with just a few proven bath offerings. The chain keeps bath in with health and beauty aids rather than near beauty.The selection includes Fa, Freeman, Naturistics and Sarah Michaels. Rite Aid Corp. has added an eight-foot bath department, but only in select stores, where the clientele and the store size justifies it, according to Martin Grass, Rite Aid chairman.
The Camp Hill, Pa.-based chain now has 100 units with special bath sets. Skin care is housed separately within health and beauty care. Shoppers Drug Mart, based in Willowdale, Ontario, sets itself apart from other mass marketers extending bath and skin by selling a private label line called Rialto. The Canadian drugstore chain even has TV commercials that advertise the Rialto brand. In stores, Rialto is merchandised in an elegant wood merchandise display fixture. Although Thrift Drug would not comment, visits to some of its upscale stores reveal that the Pittsburgh, Pa.-based chain is attempting to lure bath and body customers with very elegant, hard-to-find products, such as Cosmyl, Caswell-Massey and Tisserand. Thrifty PayLess of Wilsonville, Ore., also offers upscale products and is said to be working on private label products as a point of differentiation.
Some drugstore chains are trying to keep skin and body sales on the upswing by targeting niche markets. K&B Inc. in New Orleans, for example, has added the Black Opal skin care line with great success, according to company officials. Retailers will have a chance to segment the men’s portion of the market this July when Neoteric extends its popular Alpha-Hydrox line with an alpha-hydroxy acid aftershave. “We felt it was time to stop overlooking the men’s area,” said Mark Goldstein, Neoteric president. For Ricky Kenig, head of the eight-store Ricky’s in Manhattan, the emphasis is on bath accessories, such as brushes, loofahs and sponges. “Bath isn’t what it used to be,” he said. “It used to be such a profitable category for us.”
While drugstore chains seek profit relief in ancillary and niche products, many supermarkets are enlarging offerings of commodity bath goods like shower gels and the new body washes.
Gary Crawford, director of non-foods for Randall’s/Tom Thumb in Houston, said he is also paring back on some of the upscale bath products. “In reality, we’re finding the items that really turn are those that people use up like gels that can be used in the shower,”he said. Indeed, retailers agreed, the products that turn best are those that can be used in a shower. Bath products, however, continue to be purchased for gift-giving.
Retailers, however, have found they can’t afford to devote as much space to the category as they once had thought. Eckerd Drug Corp. of Clearwater, Fla., is a retailer who had planned ahead for the bath shakeout. When bath was hot, the chain remodeled its stores to accommodate the flood of stockkeeping units. Greeting cards were moved, clearing the way.
The full aisle was about 60 percent bath and 40 percent skin care. Now, as skin care grows in popularity, the mix is shifting to include more skin lotions and treatment. The only mass market retail channel still increasing its bath and body assortments is discounters. Discounters, however, have the farthest to go since the trade channel has only recently started to expand into beauty.
Target, for example, is getting into bath with the Sarah Michaels program via end-aisle displays. Wal-Mart has made a bigger splash in bath with a department it has integrated into beauty, near skin care. Wal-Mart makes a huge skin care statement with special boutique-style fixtures from L’OrAal’s PlAnitude, Oil of Olay and Nivea Visage. Bath and body is a major focal point of the new Bradlees in Manhattan. The selection is adjacent to cosmetics and includes home fragrances.