National names gravitate to ethnic HBC

DSN Retailing Today, Nov 25, 2002 by Molly Prior

When it comes to creating a destination for ethnic personal care products, mass retailers have a space advantage over chain drug stores. But from the looks of things, there's still much room for improvement.

Ethnic hair care manufacturers serving the mass channel have steadily expanded their lines beyond chemical treatments to offer a complete system.

In the mass channel, several in the industry point to Target as the biggest hero in ethnic hair care. The retailer has taken a more aggressive approach to merchandising the segment by eliminating middlemen and procuring ethnic hair care products directly from its vendors. To make that transition and reinforce its commitment to the category, Target spent time in discussions with vendors and on training their buyers.

For its ethnic hair care set, Target went with lead brands backed by national advertising, brands that offer a complete hair care system, rather than one or two products, said retail consultant Roslyn Chapman of The Chapman Edge.

Wal-Mart's offering seems to appeal to more budget-conscious consumers by featuring emerging brands, often $2 or $3 less than the major national brands.

Both Wal-Mart and Kmart take a regional approach to ethnic hair care, beefing up the assortment in stores with a high volume of African-American or Hispanic shoppers.

One industry veteran said Wal-Mart relies on 20 to 30 different planograms for ethnic hair care.

Kmart tailors both its advertising and merchandise to fit the market, said spokeswoman Susan Dennis. In stores with a large base of African-American customers, Kmart distributes a monthly health and beauty guide dubbed "Inside Out," placed adjacent to ethnic hair care, and the lifestyle publication "La Vida" to stores with heavy Hispanic traffic.

In addition to hair care, Kmart has also identified significant growth opportunities in skin care for both African-American and Hispanic men and women.

Chapman, also reminded that ethnic color cosmetics is another segment with growth potential. And while major brands such as Revlon and L'Oreal do well to provide deeper colors for darker skin tones, African-American and Hispanic women want products formulated for them with messaging that speaks directly to them.

An H-E-B Fresh Foods and Pharmacy store in Austin, Texas, illustrated ethnic beauty merchandising at its best, showcasing ethnic beauty brands such as Tropez, Black Opal, and Black Radiance across the aisle from major brands such as L'Oreal.

"Stores with high ethnic traffic really need to have an A, B, C approach to ethnic color cosmetics," said Michael O'Neil, national sales manager for Black Opal cosmetics. "Otherwise, this customer is left out in the cold."

Increasingly, the consumer heading to the ethnic section is more difficult to pigeonhole. The "changing complexion of America," as Chapman referred to it, may require retailers to re-evaluate how they describe and label this department.