Cosmetics has traditionally been a tricky category for the supermarket channel. Seeing opportunity, manufacturers are working with supermarket chains to expand their cosmetics departments beyond traditional brands to vary price points and maximize the category’s productivity.
Brian Talbot, VP of marketing for City of Industry, California-based Markwins International USA, manufacturer of the Wet ‘n Wild brand, believes that cosmetics has been an undervalued category in the supermarket category. “By limiting the mix to higher-priced mass brands, supermarkets may be chasing the higher ring but overlooking the value customer,” he says. That customer is an important one at the channel. “Many shoppers at the supermarket aren’t interested in a $9 lipstick, but they’ll take a chance on one priced at $3.”
“Affordable innovation was what drove the nail category — and is now doing the same for mascara. When products deliver innovation, shoppers will spend,” notes Wendy Leibmann, CEO of New York-based shopper insights firm WSL Strategic Retail. Leibmann adds that according to a recent WSL study, when innovation isn’t available, shoppers look for a lower-priced brand that’s acceptable. “There are an increasing number of good-quality lower-priced brands, such as E.L.F. and NYX, that are making trading down even easier,” she observes.
The Wet ‘n Wild brand has been a basket-builder at the drug and mass channels, and Talbot is focused on bringing the opening-price-point, impulse-driving brand to more supermarket chains. The company has an extensive couponing program — a position that’s also key to the supermarket shopper. “Supermarket shoppers clip coupons, and supermarkets don’t want those customers taking the coupons to drug or mass stores because they don’t have the product,” he says.
‘Big Opportunity’
Markwins isn’t the only brand aiming for a higher profile at grocery stores. “We see a big opportunity in the supermarket channel,” affirms Mona Monaghan-Kelliher, chief sales and marketing officer at Los Angeles-based Milani Cosmetics, which has aggressive plans to expand in 2014. “As our lives become more complex, we need to offer women what they want, when they want, where they shop. Supermarkets offer one-stop shopping convenience, a place where she can find quality, fresh and healthy food, and indulge in a special treat for herself. Milani answers the needs of multicultural women with affordable luxury.”
“Supermarkets have been a big growth segment for us,” weighs in Shawn Haynes, VP of sales at New York-based E.L.F. Cosmetics, which stands for “eyes lips face.” “We are a brand that has a lot to offer that type of retailer. The reason grocery hasn’t typically embraced cosmetics is that it’s a slower-turning category than they are used to and it’s hard to manage, so simplifying it for them is really important.” Haynes adds that E.L.F. accomplishes that with a tight, fast-turning assortment and easy-to-use display options.
“Our competitors may launch a new lip gloss with 18 shades, and we know that only three of them will really move,” he says. “When we launch a new product, we’ll do only three shades. We’re concentrating on presenting multiple categories in the supermarket channel rather than multiple colors, so the customer will shop across categories. It’s a multiple-product, basket-building approach that we’re promoting.”
E.L.F.’s four-sided spinner racks are a unique solution-based merchandising option that helps grocery chains optimize their assortments and maximize impulse sales. “We can get a great assortment of product in the $1-to-$3 price-point range across many categories, so it’s a low point of entry and very impulse-driven,” notes Haynes. It’s also easy for retailers to execute.
Beyond ‘One-size-fits-all’
To really make the category work, retailers have to move away from a one-size-fits-all approach. “They really need to have brands and products that are relative to their customers,” explains Haynes. “We’re as successful with an all-$1 program at Food 4 Less in California as we are at Wegmans with $5 and $6 price points, because those retailers are customizing their selection based on their individual stores.”
Chandler, Arizona-based Bashas’ saw its cosmetics sales jump by more than 8 percent after the grocer moved to a direct store delivery company. “The company deals with retailers all over the country, giving them the ability to draw on a broad base of experience and to keep everything fresh,” said Bashas’ spokeswoman Susy Ferra. “With a large DSD vendor, what does not work for one retailer might work with another, allowing the vendor to move merchandise around instead of allowing it to turn into markdowns or shrink.”
Keeping it fresh also means that retailers need to showcase the products whenever possible. Chains that are most successful in the cosmetics category create a statement with their beauty departments through good lighting, signing, flooring, etc., to provide an overall beauty experience, rather than sticking with basic shelves and pegs, advises Leibmann. “You can’t expect women to trust you in beauty if you present it in a commoditized fashion,” she continues, “and that’s especially the case in supermarkets where buying beauty is usually not top of the list. The trip to the store is all about ‘what’s for dinner tonight,’ so if a supermarket wants shoppers to buy beauty, they really need to showcase it to get a woman to stop.”
Savvy chains are using end caps and floorstands to draw attention to the category even when space is limited. Landover, Md.-based Giant Food LLC used a Maybelline floorstand to promote Baby Lips lip gloss and Lots of Lashes mascara in a recent summer promotion at a small-format store in Chevy Chase, Maryland, while Matthews, North Carolina-based Harris Teeter recently featured Broadway Nails’ Little Diva Gel Candy Nails and Wet ‘n Wild and L.A. Girl seasonal colors priced at $9.99 on a department end cap facing the checkout in the chain’s Washington, D.C.-area stores.
For more on the supermarket cosmetics category, visit Progressivegrocer.com/cosmetics.
