Chains, mfrs. team up to build traffic

Drug Store News, Feb 1, 1993

To cope with the challenge of generating incremental growth in ethnic hair care, chain drug category buyers have begun to work closer with manufacturers and distributors to maximize their ethnic programs.

Some chains are also beginning to consolidate all the different merchandising and advertising responsibilities for tailored departments like ethnic products in the hands of one central manager.

Florida-based Eckerd Drug, trying to create a "synergistic approach" to the ethnic department, recently gave one person the responsibility for overseeing the whole area, which includes a Hispanic program as well as an African American program.

Company spokesperson Patty Aldrich says they created the new position about six months ago, and are still in the process of refining their procedures. "The theory," says Aldrich, "is that it is better to give one person who cares about the department the full responsibility for organizing it, than to give three or four people bits of the category and let them juggle that part with everything else they have to do."

One person also has a better chance of maximizing sales in the 20 percent of the stores that do 80 percent of the volume.

Like Eckerd, many other chain drug operators are revising their approach to merchandising and advertising ethnic products. Category buyers are paying strict attention to the mix of products in their stores and warehouses, and many are developing more "focused" advertising campaigns that concentrate on advertising programs geared to the popular African American media, as opposed to just running ads in general market media or chainwide rotos.

Ads in every circular

"We've got ethnic items in just about every major circular we run," says Harco's ethnic buyer, Charles Monk. "And everything we run, we run at a sharp price. We're promoting the category and we're promoting a lot of different items."

Not only are many chains getting more aggressive in the number of ethnic promotions they do each year, they are also experimenting vigorously with the types of promotions they do: more feature promotions, more endcaps, and, in the case of Perry Drug, the drug store industry's most creative ethnic marketer, creating the industry's first major on-going ad campaign tying in general market manufacturers with ethnic hair care manufacturers.

Mass brands in ethnic ads

Perry kicked off the campaign, the first of its kind, with a January circular that featured 15 products from 13 manufacturers; six of the 15 products were typical ethnic toiletry items from traditional ethnic hair care companies. The other items were from general market manufacturers featuring brands like Raid, Hi-C, and Keri skin lotions.

"The idea is to feature a wide variety of products from all areas of the store," says Steve Lund, vice president of merchandising for Perry, "because African Americans purchase many more products than just hair care."

Perry is supporting the program with ads on African American radio stations, instore circulars, rotos in African American newspapers, billboards, POP, and mailers.

Stresses low everyday prices

At Harco, Monk is also trying to communicate a price savings message. "We've been discounting the top 25 to 30 items every day for a while now," he says, "and it's helped; it's made a difference. Wal-Mart knows we're always lower than anyone else on these items, so they're not always trying to bang heads with us by advertising them.

"We're also still doing radio remotes, and in our better stores, we're enlarging the department, going from maybe 4 feet up to 12. We want to capitalize on this category's potential in our strong markets."

On other marketing fronts, many chains are still trying to create or tie into promotional campaigns that perform a public service for the African American community. Public service campaigns are popular.

"We're developing more programs with chains," says Jim Normandin of Beauty Enterprises. "Everybody's trying to chase down the growth dollars. It's a good response to a maturing category."

We're trying to rewrite the business for our chain drug customers," says Chuck Lewman, president of Los Angeles-based Paul's Sundries. "Chains today have to look carefully at their pricing strategies and their product assortment, as well as the way they advertise and promote the category.

"B&B stores have been so successful because they provide low prices and customer convenience. It's not at all unusual to see relaxer kits on sale everyday for $6.99 in B&B stores, but even when the average chain discounts kits by 10 percent, you still see them priced at $8.95. A $2 difference is too much disparity for people on tight budgets. Maybe $7.95 would be a good price to bring the customers in."

"Drug chains have to understand and concentrate on their strengths, their points of difference," says Kent Humphreys, president, Jack's Service Company. "Food stores and discount stores have traffic as a competitive advantage. Beauty and barber stores have service, selection, new products and price as a major strength.