H&BC follows in-line strategy - Target's health and beauty care department - Target Power Merchandising

Discount Store News, April 18, 1994

Target's claim to fame in health & beauty care and cosmetics is not its dependence on designer brands but its in-line merchandising strategies which allow the chain to devote shelf space to entire lines instead of segmenting the products into different categories.

Known as a retailer that controls its assortments and endcaps with an iron fist, Target has definite ideas about how its department should be merchandised and what products it will feature for both its branded and control labels.

At its Greatland store in Bloomingdale, Ill., outside Chicago, the department is well-lit, easy to shop and uses endcaps and a generous amount of shelf space to stock the latest brands together, creating a boutique of sorts for the consumer.

This strategy is especially important for Target because women, who are the retailer's most frequent customers, enjoy scent layering and can take advantage of it in this type of environment.

In fact, the number of women who shopped at Greatland was more than double the number of men, according to a survey conducted for DSN by Chicago-based Leo J. Shapiro & Assoc. Target also keeps an eye on the continuity of the stores, something that manufacturers like when they place an order.

"Continuity is important because, when a manufacturer places an order, they know that their product will be in every store and when a consumer is looking for an item, they know they will find what they are looking for," said Larry Wilhelm, Minnetonka Brands.

The stores reflect this attention to detail with smart merchandising displays that are heavily influenced by upscale brands, which Target keeps stocked at eye level while stocking the lower-priced items toward the bottom of the display.

Most impressive at the Chicago store was the 16-ft. bath section, where Target makes a splash with a variety of brands like Yardley, Sarah Michaels and Naturistics. This same strategy applies in cosmetics, where the chain maintains a full product assortment including Physician's Formula, Almay and L'Oreal.

The chain also carries this approach over to its Trend Basics control label of products which includes cosmetics, accessories and bath products.

Where the retailer doesn't have as strong an impact is in fragrances, which Target chooses to combine with cosmetics with no special signage. And it stocks only mass market brands. This differs from the competition, especially Wal-Mart, which emphasizes department store designer labels in both fragrances and cosmetics.

"We don't want to be too big into that business because of having to deal with diverters," Target chairman Robert Ulrich said in an exclusive interview with DSN. "We're not interested in Clinque and other diverter-supplied cosmetics and fragrances. Our customers are finding it more acceptable to get their skin care from a Cover Girl as opposed to an Estee Lauder."

This strategy may be hurting the discounter as only 5% of consumers said they visited a Target Greatland in the last year for their H&BC and cosmetics purchases, according to the survey. This compares to 12% at Kmart and Wal-Mart and 10% at Venture.