Better mix, promos give drug a bigger piece of stationery sales

Drug Store News, April 7, 2003 by Liz Parks

As the economy remains uncertain, value continues to be a key driver of sales in basic general merchandise categories like stationery--especially for drug chains, which have seized the opportunity to become more promotional in the segment.

Yet while drug stores' strong value proposition continues to play a key role in building traffic, fashion--in the form of new colors and shapes--also is driving growth in stationery, as the category has expanded beyond basic paper and pens.

"Drug chains are doing a much better job today with stationery," said Steve Jacober, president of the School, Home and Office Products Association. "According to our last survey, drug chains are gaining market share in stationery by rounding out their mix with a wide product assortment and by giving the category much more visibility year round."

Based on SHOPA's 2002 back-to-school consumer shopping research, 21 percent of consumers shopped drug stores for back-to-school products last year, compared with just 14 percent in 2001--a sign that the aggressive promotion paid of. "We're selling more items on impulse, and we're trying to feature it more to make sure consumers have us on their radar screen when it comes to stationery," said Jon Rudden, Happy Harry's vice president of merchandising.

Many drug chains are adding a wider variety of high-ticket, high-margin items that have a natural synergy with stationery, such as the desk lamps and easy-to-assemble computer desks that Drug Fair of New Jersey merchandised during last year's back-to-school season. Some products typically found in home office stores now are staples in some drug chains, Rudden noted, adding that paper shredders were hot last back-to-school season.

At Walgreens, the chain routinely cross-merchandises such items as phone cards and calculators with stationery. It seems no drug chain does better merchandising the category than Walgreens, which top suppliers identify routinely as the best stationery retailer in retail drug. "They don't just rely on picking up impulse sales from shoppers already in the store," one manufacturer told Drug Store News. "They also go after planned purchases by promoting the category aggressively, ... and bringing in new products as fast as they come out."

Fashion forward

Clearly, manufacturers are working hard to meet emerging consumer needs with advanced products like wide-barreled, rubberized pens that are easier to grip and use.

"Ergonomic writing instruments also play to fashion needs," noted Mike Finn, a spokesman for Sanford, a Newell Rubbermaid Sharpie group division. "Ergonomic pens look innovative, as well as write innovative."

And looks mean a lot, noted Steven Collinsworth, Sanford manager of sales information. One of the strongest trends right now is a demand for fashion-forward writing instruments, he said, a view shared by MeadWestvaco consumer and office products director of marketing Kelli Widdifield. Our stationery business is trending up--and it's all based on fashion--[both in] design and image."

While "the economy has hurt the writing instrument category," Tim Koletsos, Bic national customer development manager, noted, certain segments have seen growth, including mid-end retractable pens and added-value ballpoint pens with easy grip barrels. The company has leveraged the popularity of grip-enhanced pens against the new Bic Grip Permanent Marker.

Sanford's new uni-ball Fusion is the first mass market pen to utilize a clear-color technology. Sanford also is shipping what it calls its biggest Sharpie launch since the brand was introduced in 1964--Sharpie Metallic.