B-T-S market explodes with ideas

Drug Store News, Feb 2, 1991

B-T-S market explodes with ideas

Retailers and manufacturers agree that the stationery/school/home office department is a vibrant and profitable category for drug stores, combos and mass merchandisers, abounding with growth opportunities, especially in the home office segment.

Indeed, a recent Drug Store News survey reinforced what drug chain buyers have been telling us for more than a year: that home office is the fastest-growth area of the category. But "green" products and children's arts and activities are also emerging as promising growth segments, respondents indicated, reflecting increasing public concern for the environment and working mothers' desire for help in engaging their children in quality-time activities.

What chains are doing

Finding the right keys to unlock these doors of opportunity, and others in the category, is a challenge retailers and vendors have been searching for separately and, increasingly, together.

They've found some: Drug chains have carved out more space for the whole department, or have reallocated existing space to maximize the potential of home office and other growth areas. Some are intensifying their ads during target promotional periods, or lengthening certain ad periods, to reap a higher yield. Others say they're increasing their endcap and promotional space for stationery items. Some have worked with stationery vendors to try to devise the optimum merchandising strategy for increasing sales and profits.

The value-added side of the stationery business has been growing for the past few years. One reason is that consumers have demonstrated a willingness to pay more for quality. Another is that the competitive pricing of commodity goods has become so fierce at Back-to-School time, with deep discounters sometimes selling at one-third their cost, that drug store retailers and others have increasingly turned to upgraded products for better margins. According to one major vendor, sales of upgraded, fashion stationery products doubled in 1990.

Emphasis on upgrading

No wonder, then, that there looks to be more emphasis than ever this year, in new product lines and extensions, on value and function: better quality, heavier paper, more pockets, more wireless themebooks, well-executed and up-to-the-minute designs and colors, more bulk- and multi-packs, more value-added packages.

Some manufacturers expect retailers to approach this Back-to-School season with a certain amount of caution, given the economic climate. "It's not a year to gamble on marginal or periferal-type merchandise," said one vendor. "Retailers may be buying products with the smallest amount of risk--i.e., solid performers. It's anticipated that they'll be buying closer and shorter and trying to refill, rather than buying long."