SHOPKO’S BEAUTY FACELIFT

Byline: Faye Brookman

NEW YORK — When most people talk about the beauty powerhouses of mass merchandising, Target, Wal-Mart and Kmart come to mind. But there’s another mass merchant making its mark in the beauty department.
ShopKo Stores, based in Green Bay, Wis., has a new prototype featuring an enlarged cosmetics presentation that is helping the chain ring up greater beauty sales.
Roughly six of the chain’s 165 stores sport the new look in beauty and, according to senior buyer Lisa Cisar, all new stores will have the fresh fixtures, graphics and product assortment.
One of the biggest changes is the relocation of cosmetics from accessories in older stores to a new spot that is adjacent to health and beauty care. By doing so, ShopKo presents a mini drugstore under a discount store roof. More and more stores have Rx counters, a department that is a marketing push for the chain. Cisar believes there is synergy between beauty and wellness.
Also, the entire store has been set up to reflect lifestyle merchandising, and the positioning of beauty near related items helps carry out that theme.
The new beauty department is more upscale than in traditional ShopKos, said Cisar. “It is set off with a wood floor and special lighting. We wanted to give it more ambience so that shoppers could feel good about themselves,” she explained. Bold graphics also lure shoppers to the department.
To create more of a boutique appearance, ShopKo also earmarked more space for beauty. Older stores average about 129 linear feet for cosmetics; the new units have about 140 linear feet.
The merchandise assortment has been carefully selected, said Cisar. “We don’t carry everything,” said Cisar, adding that ShopKo sticks with well-known brand names such as Revlon, Almay, L’Oreal, Cover Girl and Maybelline. “These brands send a message to our customers that we carry the major brands.” Within the last year, ShopKo also added Procter & Gamble’s Oil of Olay.
With hopes of keeping the department pristine, ShopKo made the decision to eliminate promotional displays. “We wanted to clean up the department and boost productivity. We want to bring people to the [peg] wall,” said Cisar. That’s a different tack than some competitors, especially drug chains, have adopted. Many chains have crammed counters and floor displays full of trendy, promotional items. Although the promotions drive sales in the short run, they sometimes sap peg wall sales.
That nonpromotional strategy has paid off, she added, with sales and margins expanding. Cisar said, however, that 2000 has been a hard year compared with 1999’s volume. “There haven’t been any big launches,” said Cisar. “There hasn’t been much newness in the market outside of bath.” What’s more is that although Oil of Olay came out of the gates strong, it is reportedly not meeting the planned advances.
ShopKo also made the decision to exit the fragrance business based on lethargic category turns. Now the discounter only brings in scents on a seasonal basis.
What is performing well, she said, are specialty brands — especially youth logos such as Bonne Bell, Caboodles, Jane and Del Laboratories’ New York Color. ShopKo was one of the first retailers in the country to present the Caboodles line of cosmetics. Caboodles Cosmetics president Gary Schofield said the chain does a “fantastic” job with the brand. In keeping within its shop-within-a-shop merchandising philosophy, ShopKo presents all Caboodles merchandise, such as cosmetics organizers and cosmetics, in one spot.
Cisar’s focus for the remainder of 2000 and into 2001 is to work on ways to boost beauty consumption. “We have to focus on how to be more productive and to understand the consumer,” she added. For one, the plate for ShopKo is an examination of the benefits of universal fixtures and private label cosmetics.
ShopKo is the nation’s 37th largest retailer, with sales of more than $3.9 billion for the year ended in January. In the past few years, the company grew via the acquisition of Pamida, a Midwestern mass merchant, and recently PM Place Stores Co.

A new company bowed at the National Association of Chain Drug Store’s Marketplace meeting last month in New Orleans with a great reception from retailers. Uptown Nails, based in New York, made its debut with a 40-stockkeeping-unit assortment of artificial nails made in the United States. Packaging is bright yellow to help the products stand out on the shelf. The collection, set to ship this month, is priced from $1.49 to $6.99 and includes predecorated, artificial nails, nail tips, nail treatments, files and accessories. Principals of Uptown know the artificial nail business — they are former executives with Kiss Products.

Add Longs Drug Stores to the list of retailers becoming manufacturers with their own bath labels. Two months ago, Longs started sprinkling its own brand called Spa Essence into the mix. The drug chain, based in Walnut Creek, Calif., is merchandising Spa Essence in both specialty and basic bath departments. Longs joins Eckerd, Rite Aid, Shoppers Drug Mart and CVS as chains that have decided to boost margins and build shopper loyalty via exclusive bath labels.

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