RITE AID DEVELOPS BATH COLLECTION

Byline: Andrea M. Grossman

NEW YORK — In its first major beauty initiative in five years, Rite Aid is launching a 92-stockkeeping unit private-label bath collection, with arms long enough to reach not only its core customer, but another woman, someone a bit more modern, affluent and beauty-trend savvy.
The collection, which is estimated by industry sources to be able to generate up to $12 million in first year sales, is designed to bring Rite Aid’s entire beauty department into focus with an aggressive marketing approach, not seen since 1997 when it launched the industry’s first ad campaign touting a money-back guarantee for cosmetics.
The collection, which will enter all 3,700 Rite Aid stores April 1, also represents the drugstore chain’s first major beauty initiative under new management. Last year, a wave of Fred Meyer executives took over many top-level positions, left vacant by Rite Aid executives who left the chain en masse, in late 1999. According to Rite Aid’s latest 10K filed July 11, 2000, adjustments for fiscal 1998 and 1999 reduced Rite Aid’s retained earnings by $1.6 billion as of Feb. 27, 1999.
Robert G. Miller, a former top executive with Kroger Co. and Fred Meyer Inc., was tapped as chairman and chief executive, following the departure of Martin Grass. Mary F. Sammons, also from Fred Meyer, was named president and chief operating officer. Marty Tassoni joined Rite Aid as senior vice president of category management from Fred Meyer and reports to Jim Mastrian, executive vice president of marketing and merchandising.
Along with new management came a new strategy, one that called for each category manager to examine their product offering and to make sure it offered customers product they would want and value, including beauty. According to the 10K, cosmetics comprised 3 percent of annual sales, or approximately $430 million. Industry sources estimate Rite Aid’s beauty sales grew in the mid-single digits last year, driven by Rite Aid’s branded initiatives in hair care and cosmetics. The report also stated Rite Aid’s interest in expanding private label products, which generally offer retailers higher margins and greater control over inventory.
Judy Wray, Rite Aid’s category manager for bath, cosmetics, fragrance, skin and nail, examined her bath offering, specifically Rite Aid’s private label bath line Spring Garden. She immediately saw an opportunity to make some changes.
“We mutually discussed that bath was an opportunity category. Mary Sammons had great success, in her other life at Fred Meyer, with bath and was certainly very supportive of my endeavor into this area,” Wray said.
The new collection consists of three different lines, Soaked & Tickled for children, and Pure Spring and Elsewhere for adults. Pure Spring is designed to target Rite Aid’s growing secondary customer base — a woman who is intrigued with products that she feels appear to offer her a health benefit. Elsewhere reflects the more traditional floral and fruit fragrance concept of bath products. All three will replace Spring Garden, which was launched in 1995.
Before Wray decided Soaked & Tickled, Pure Spring and Elsewhere were the right lines for Rite Aid, she studied core customer and demographic data to learn about who was shopping in her stores. Wray learned that Rite Aid’s customer is “pretty standard” for a chain drugstore — aged 18 to 45, middle income, woman — except for the new up-and-coming customer base, one who’s more affluent, potentially an empty-nester older adult who’s savvy to beauty trends. This secondary customer base is one that Rite Aid really wants to attract into their stores.
“There is always the Holy Grail of getting department store customers into mass outlets,” Wray said.
Wray did not use any specific brands or lines as role models for the new bath collection, but her favorite pieces from Bath & Body Works, Eckerd’s Comfy Kids line and Calgon Home served as a blueprint for the brands she wanted to create. Her reportage also brought her into retail stores not typically visited by beauty category managers.
“For Soaked, I walked up and down toy aisles, went to pet stores and found fish food containers that we wanted to use as a model,” Wray said.
She also worked closely with the research and development teams of Mana Products and Cosmetica Laboratories Inc., the two main manufacturers for Rite Aid’s new bath collection. Another 50 vendors brought different ideas and concepts reflecting the direction in which they thought the bath category is headed.
Soaked & Tickled, Pure Spring and Elsewhere — three separate lines that target three different consumers — is what was conceived. Wray believes consumers will cross over from line to line, but she had a specific customer in mind with the development of each. Pure Spring combines a simple image with single-note fragrance for the woman looking for therapeutic effects from her bath and body line. Products are made with shea butter, vitamin E, green tea and marine extracts. Pure Spring consists of five families: Citrus, Tea, Milk, Brown Sugar and Sea.
Each family follows a bold color scheme and includes seven products, as well as a small and large gift set. Products in each family include shower gels, soaps, lotions, body sprays and candles. Each family also has items made exclusively to match its theme.
For example, the Brown Sugar family offers sugar bath cubes; Tea offers tea bags for the bathtub; Citrus implements a citrus body scrub; Milk offers a powdered milk bath soak; and Sea includes deep sea bath salts. Pure Spring scented candles and body bars retail for $4.99; gels, lotions and spritzes retail for $6.99; and bath salts, sugar bath cubes and bath tea bags retail for $7.99.
Elsewhere reflects the more traditional bath concept by offering a contemporary range of floral and fruit fragrances packaged in decorative containers. Value-oriented and designed to appeal to a broader range of customers, Elsewhere fragrances “are such that everybody, given their olfactory senses, tends to smell something different,” Wray said.
The six families of Elsewhere are named after moods; each offers a different scent and follows a specific color scheme. Cheerful products, for example, are orange and have a peach scent. Dreamy is purple and has fig, chamomile and floral scents. Blissful is pink and flavored with cranberry and floral notes. Peaceful is blue and combines sweet berries and floral scents. Spirited is green and implements zesty citrus and floral tones. Calming is clear and infuses almond oil, shea and cocoa butters with a vanilla scent. Lotions, gels, foam bath, body powders, body mists and candles are all priced at $5.99. Soaked & Tickled, the children’s line, sports a signature icon — a goldfish — swimming in the tear-free formulas. Currently, Soaked & Tickled is made up of a bubble bath with a bubble wand, body lotion, and a hair and body wash. Wray’s trip to the pet store paid off in the form of Fish Food bath sands. Price points are $4.99 for all items. Four new sku’s for the Soaked & Tickled line are already in the works.
All three lines have been designed both to appeal to Rite Aid’s current customers, as well as to shoppers loyal to other drugstores and other channels.
“They reflect products that I feel we carry in other lines and also improve upon what’s available. But they also reflect items that I don’t see in the mass market and that are not offered to me. Now I can offer these products to my customers who may be buying them in other places,” Wray said.
Most drugstore chains have introduced a private-label bath line over the past two years, including CVS, Eckerd, Longs and Phar-Mor.
Elsewhere, Pure Spring and Soaked & Tickled will be merchandised in the beauty quadrant’s bath department. The only traces of Spring Garden to remain in stores are its blond wood merchandising display units, complete with back-lit walls.
To support the bath collection, Rite Aid will invest between $1 million and $3 million in first-year consumer promotions, most of which will be spent in the first three months of the bath launch. According to John Learish, vice president of marketing, the thrust of advertising will be in the form of in-store point-of-sale displays, but customers will be targeted the second they pull into a Rite Aid parking lot. Graphics depicting both adult bath lines will decorate store windows. A large chrome fixture, displaying a sign, will be set where customers first enter stores to let them know two new bath exclusives are now available. The sign is intended to lure customers to the beauty department, where they will then see several 3 by 3-foot ceiling signs, shelf extenders and shelf signing.
Signs will be displayed beginning in April for a minimum of 90 days. Coupons will not be offered initially.