Managing hair care space a constant battle

Drug Store News, Feb 7, 1994 by Barbara White

It's an understatement to say space management is a challenge in the commodity hair care category.

"There is such a variety of goods, with so many SKUs and line extensions entering the market," said John Cincotta, buyer at Manhattan-based Chain Drug Marketing Associates.

Calling space management "one of the biggest problems retailers face in this category," Cincotta said drug chains need to make a careful analysis of their commodity hair care inventory. "Retailers could easily eliminate 20 percent of their inventory and their customers wouldn't notice," he said.

Indeed, drug chains are looking at the department with a critical eye. Gregg Heller, buyer at Tulsa, Okla.-based May's Drug Stores, has a firm policy: SKUs must have a unit movement of at least 300 pieces a year to stay in the chain's mix.

Slow movers nixed

Tuscaloosa, Ala.-based Harco Drug is taking a similar tack. Buyer Charles Monk said the category is reviewed on a six-month basis. The products that aren't moving are dropped.

"Every time we review, we cut," said Monk. "We only have 12 feet of space for the category, and that's all we are going to get."

Manufacturers know that. Retailers said most vendors are partnering with chains to better manage their space. "Manufacturers realize that if they want to be in with a new item, they have to pull something out," said May's Heller. "Even Procter & Gamble is starting to cooperate."

"There's not much resistance to taking slow-moving products out of the mix to make room for innovative new items," added Monk.

Ann Carraher, director of marketing at Alberto-Culver's consumer toiletries division, thinks shelf space ought to be apportioned according to market share. Brands with a 10 percent market share, for example, ought to be awarded 10 percent of a retailer's shelf space.

"It's tough. Everybody is out there fighting for space and the category is flat, so gaining sales really represents taking share from someone else," Carraher said. "We're seeing the value-priced segment and the premium segment flourishing, while the middle is experiencing a fallout. And most brands fall in the middle."

Other manufacturers agree with Carraher's space management philosophy. According to Helene Curtis' Power Brands, 20 percent of the brands produce 80 percent of the sales, so those brands should be given the lion's share of shelf space.

"Some peripheral brands are niche brands and have a strong following, such as Tegrin. We don't suggest dropping those," said Bob Shipley, retail area sales manager at Helene Curtis. "We suggest dropping those brands that are on a swift decline, brands that may once have had a following, but are now taking up space."

While most retailers would agree in theory, they also must meet selection criteria set by their customers. "Drug stores can't win on price, so they have to offer a better selection than mass merchants," said CDMA's Cincotta.

Some retailers may scoff at the idea of offering peripheral brands, but others are still generating respectable sales of offbeat brands, such as Herbal Essence.

Adopting the 80/20 true

However, some retailers have already accepted the 80/20 theories.

"We devote a lot of shelf space to facing a single brand, such as White Rain," said a buyer at a deep discount chain. "We do that with Helene Curtis brands as well. We're merchandising shampoo with conditioners and styling aids so the brand makes a greater impact."

Other retailers use a more time-honored approach. "We don't planogram our bottom shelf so that we can use it for overstocks when we turn a promotion," said Harco's Monk. "I can't give 10 facings to White Rain Extra-Body Formula every day, since it doesn't sell as quickly when it's not on promotion."

Retailers search for products with pizzazz

Retailers agree that in hair care--a flat category with eroding margins--the market desperately needs new, innovative products.

Specialized formulations for specific hair types--Colorvive, Wash 'n Curl--have been the trend for the past few years.

Said one retailer: "Color enhancing products and products for color treated hair, such as Revlon's Color Silk and Clairol's Color Hold, have created a whole new category within a category."

Here are just a few of the newest hair care products to hit the market:

* Neutrogena's HeatSafe, an instant, heat-activated hair treatment that uses heat from dryers and other styling tools to treat and protect hair;

* Alberto-Culver's VO5 Hot Oil Therapy line of shampoos and conditioners, designed for use with the brand's Hot Oil Treatment;

* On the heels of its successful Permavive and Colorvive lines is L'Oreal's Hydravive, five SKUs of hydrating shampoos, conditioners and treatments for normal hair;

* L'Oreal's new styling aids for straight hair called Sleek Ends, Clean Lines and No More Flyaways, which are additions to its Studio line of styling aids; and

* Dep Corp., a company known for purchasing sleepy lines and turning them around, is restaging Halsa Highlights as a value brand. The former S.C. Johnson holding should get some new life as consumers show more interest in color enhancing shampoos. Agree, Dep's other purchase from S.C. Johnson, is also being revamped.