Skin care & the mass market

Chain Drug Review, Sept 10, 1990

SKIN CARE & THE MASS MARKET

Skin Care's Glory Days Begin

When Chain Drug Review ranked the hottest categories of 1989, few were surprised by skin care's inclusion on that select list. Moreover, the category promises to be hot throughout the 1990s, as suppliers continue to fuel its expansion with timely product introductions, and as retailers (often working hand in hand with those suppliers) continue to develop new approaches to merchandising. For skin care the glory days are just beginning.

Skin care is a category with strong appeal to all types of mass market retailers, but none more so than drug chains. While discount stores, supermarkets and combination stores all own part of the skin care business and are fighting for more, chain drug stores rule in both of the category's primary segments: hand and body lotions and face creams and lotions.

Last year sales of hand and body lotions across all mass market trade channels increased 8% to $578 million. Drug chains captured the biggest portion, garnering 34% of the market. Best-selling items in the segment were Chesebrough-Pond's Inc.'s Vaseline Intensive Care, Warner-Lambert Co.'s Lubriderm, Bristol-Myers Product Group's Keri lotion, Andrew Jergens Co.'s Jergens and Westwood Pharmaceuticals Inc.'s Moisturel, in that order.

Supermarkets ranked second in market share in the hand and body lotions segment, accounting for 20% of all mass market sales. They were followed closely by discount store chains (18%) and food/drug combination stores (17%). Independent drug stores accounted for 11% of sales in this segment.

Chain drug stores hold an even more commanding lead in the face creams and lotions segment, with their 45% market share more than two-and-a-half times larger than that of their closest competitor. Face creams and lotions posted even stronger gains than hand and body lotions last year, with sales up 12% to approximately $571 million.

The best-selling face creams and lotions in 1989 were Richardson-Vicks Inc.'s Oil of Olay; Chesebrough-Pond's Pond's; Noxell Corp.'s Noxzema; Revlon Inc.'s Moon Drops, Eterna 27 and European Collagen; and Beiersdorf Inc.'s Nivea, in that order. With drug chains capturing almost half of the segment's mass market sales, the remainder was split up by discounters (17%), supermarkets (15%), independent drug stores (12%) and food/drug combos (11%).

Perhaps the greatest driver of skin care's growing success is the combined efforts of its supplier companies. Such market leaders as Almay Inc., Beiersdorf, Bonne Bell Inc., Bristol-Myers, Chesebrough-Pond's, Johnson & Johnson, L'Oreal, Max Factor & Co., Neutrogena Corp., Schering-Plough Corp., Procter & Gamble Co., Owen/Galderma and Revlon have all quickened the pace of introductions.

Just as important, they are supporting those introductions with creative promotional efforts, effective advertising and meaningful merchandising assistance.

L'Oreal, for example, is backing its 18-month launch of Plenitude with $57 million in advertising and promotion. A direct-mail and magazine insert campaign is putting trial-size samples of L'Oreal's Action Liposomes into the hands of 26 million consumers.

Beiersdorf has added products, improved formulations and redesigned packaging for its Eucerin line. Its popular Nivea line is being promoted with 27 million coupons, 15 million trial-size items and an aggressive ad program.

Along with its consumer marketing support programs, Almay is waging an intensive behind-the scenes campaign for its hypoallergenic products. It targets dermatologists, allergists, eye care professionals and skin care specialists with samples, product information, medical journal advertising and seminars.

Mass market retailers laud skin care suppliers' efforts to meet their needs in designing in-store promotions and display vehicles.

Sun Pharmaceuticals Ltd., for example, offers its Banana Boat skin line in a small-footprint prepack featuring the top four SKUs: aloe vera body lotion, aloe vera gel, collagen gel and vitamin E gel. "In our small stores, in particular, that kind of packaging is crucial to our merchandising flexibility in skin care," says one chain drug merchandiser.

Niche marketing is beginning to play a role in the skin care category, a development that is likely to become increasingly important as it expands.

Bonne Bell, for example, has reformulated, repackaged and repositioned its Ten-O-Six skin care line, a two-step system targeted to 12- to 19-year-old females. Company research has identified a strong level of product awareness among those consumers.

The marketing and merchandising of skin care products is evolving. Trends indicate that the category will be more closely associated with cosmetics than with H&BAs.

Given that and other trends, chain drug stores are likely to continue as the dominant mass market channel in skin care.

Skin Care Categories

FACIAL PRODUCTS ARE HOTTEST SEGMENT

Facial products are the hottest segment of the skin care category, as evidenced by the frenetic new product activity taking place there.