MASS MARKET FACES WEB CHALLENGES
Byline: Faye Brookman
NEW YORK — At least for now, mass market beauty is tangled up in the Web.
Characterized by low price points and sometimes-bulky packages, beauty products never seemed to be the best products for e-commerce. And the Internet never seemed to fill the bill as a tool of convenience.
Still, many e-tailers had hoped beauty would help burnish their images and build transactions.
While many prestige sites such as ingredients.com and eve.com, are already defunct, it is only recently that the mass market is backing off the category. This week, amidst rumors it was forging an alliance with Amazon.com, Wal-Mart.com downsized its work force and revamped its site.
Specifically, Wal-Mart.com, plans to discontinue its lowest-priced cosmetics and apparel. The move was characterized by a spokeswoman as an effort to build infrastructure and improve functionality at the e-commerce site, which has struggled and was actually relaunched late last year.
As an example of items that Wal-Mart might prune could be those priced under $10, such as Olay foaming face wash. Despite minuscule price tags, the shipping charges range from $3.25 for ground shipping to $15.25 for overnight delivery. Wal-Mart had already eliminated very low-cost items such as ballpoint pens. The goal is to promote more big-ticket products such as electronics.
This week, Amazon.com’s stock skyrocketed on talks that it could join forces with Walmart.com. By Wednesday, the potential alliance faded with analysts stating that nothing was “near term.” Still, many industry observers were excited about the two teaming up.
Walmart.com isn’t the only merchant finding beauty items can be a challenge to manage. PlanetRx announced last month that it was dropping out of the drugstore e-commerce business to concentrate on filling prescriptions for cancer, HIV treatment and drugs needed by transplant patients. These specialty areas are well suited to the Internet because of high levels of service and intense privacy. PlanetRx is recommending customers transfer their Rx business to drugstore.com.
Allan Goldman, the former vice president of merchandising for PlanetRx, has joined SymRx, Inc. as senior vice president. SymRx, based in Rockville, Md., is a company that provides technology and care-delivery strategies to pharmacies. SymRx owns Cornerdrugstore.com, a provider of business-to-business and business-to-consumer electronic commerce programs for independent and small chain pharmacies.
Angela Kapp, who helped set up Estee Lauder’s Web site and now operates her own consultancy, explained why health and beauty care is a challenge for e-commerce.
“You have a very wide spread of distribution with the lower end of the health and beauty aids market,” said Kapp. She added that the impulse nature of buying beauty while in a store is tough to duplicate online. “You go to Wal-Mart as a destination and you might pick up a $5 lipstick. And, you can’t change consumer behavior — 95 percent of people still go to traditional stores.”
Despite the fallout, there are mass retailers still bullish on beauty on the net. Michael Polzin, spokesman for Walgreen Co., said the chain is still heavily promoting health and beauty care as well as cosmetics. “We’re really just getting it going and it is meeting our plans,” Polzin said.
CVS.com is also pushing its site. The company invited former PlanetRx customers to migrate to its site when PlanetRx announced its exit. CVS.com offers more than 12,000 products online.
Drugstore.com, in an effort to fortify beauty sales (it owns Beauty.com), launched a clinical skin care store online. The service is the exclusive online source of TotalSkinCare.com recommended products. “TotalSkinCare.com is the perfect fit for Drugstore.com because its products are hard-to-find, doctor-recommended items which are superior to those found in brick-and-mortar stores,” said Peter Neupert, president and ceo of Drugstore.com.
According to statistics from the National Retail Federation and Forrester Research, consumers spent $87 million on health and beauty care items online in January, a dip from $154 million in December.
Longtime cosmetics veteran Harry Hart, 66, died on Sunday, March 4 in Jensen Beach, Fla., from a pulmonary disorder. Hart retired from Revlon in 1999 from his post as senior vice president, corporate trade development, after 18 years. “Harry Hart knew every buyer and would often serve as the guard at the door to Revlon parties to say who could come in and who couldn’t,” recalled Jeanette Solomon, a former cosmetics buyer.
Prior to joining Revlon, Hart worked at Warner-Lambert. He served on the associate board of the National Association of Chain Drug Store’s advisory board and was honored by NACDS in 1999 with the Robert B. Begley award. He is survived by his wife, Lynne, two sons and a daughter.
For the third year, NO-AD products is sponsoring a No-Addiction Campaign. The campaign, in conjunction with high schools, builds programs promoting drug and alcohol prevention and awareness.
The NO-AD company contributes a portion of all NO-AD bath, skin and sun care sales toward the program. NO-AD products are produced by Solar Suncare of Miami, Fla.