Listening to customers is source of innovation

MMR, Nov 17, 2008 by Jeffrey Woldt

CVS Caremark and Shoppers Drug Mart have each opened freestanding stores designed to bridge the gap between class and mass in beauty care.

The outlets, dubbed Beauty 360 and Murale, respectively, represent noteworthy departures from what drug chains and other mass retailers have offered in terms of both the quality and breadth of brands available and the level of service provided. SDM, which like other Canadian drug chains already carried many prestige beauty products in its stores, has upped the ante in that respect. Chanel, Estee Lauder and Lancome are among the cosmetics and fragrances sold by Murale.

Distinctive brands are also a draw at Beauty 360. Elizabeth Arden, Juicy Couture, StriVectin, Clarins and Laura Geller make up part of the mix. In that respect, CVS has a steeper hill to climb than SDM, since many upscale beauty suppliers cling to the myopic view that distribution of their products in the United States should remain limited to the traditional channels of department and specialty stores, even though that approach no longer aligns with the shopping preferences of most consumers.

The expertise that patrons can draw on is another distinguishing characteristic of the two new banners, for which CVS and SDM have ambitious expansion plans. In addition to trained professionals to advise customers about products, Beauty 360 and Murale offer a host of spa services. Murale, which made its debut in the Ottawa suburb of Orleans, is staffed by a full-time pharmacist and includes a dispensary, while the first Beauty 360 outlet, in Washington, D.C., is adjacent to a CVS drug store, which can be accessed through a breezeway.

Mike Bloom, senior vice president of merchandising at CVS, might have been speaking for his company and SDM when he said at the Beauty 360 opening, "We pride ourselves on listening to our customers and giving them what they want."

That remark captures the wider significance of the two new beauty care concepts: The leading drug store operators--and CVS and SDM are two of the best anywhere--have become true innovators. In recent years they have developed an appetite for rethinking their basic formats, as evidenced by the advent of in-store health clinics, as well as experimenting with new ones. That openness to innovation will go a long way toward ensuring the trade class' continuing relevance.