Ethnic toiletries start to stir … and chains eye strong promos to build traffic, maximize sales

Drug Store News, April 30, 1990

Ethnic toiletries start to stir

. . . and chains eye strong promos to build traffic, maximize sales

Sales of ethnic products started to inch up slightly throughout the industry in 1989, after several slow years. Heartened by the increases, drug chains continued to develop strong programs to maximize sales in the category, which is now considered a crucial traffic-builder.

Total ethnic dollar sales were up four percent in '89 versus '88. However, drug chains which are committed to the category like Perry Drug, Peoples, Harco, and Walgreens are experiencing stronger growth in most of their high-traffic ethnic neighborhood stores.

Vicki Williams, vp of cosmetics at Peoples Drug, reported that her ethnic neighborhood stores are doing very well, reflecting Peoples' recent decision to "get more aggressive" in this category.

Scott Gorley, who buys ethnic products for Perry Drug, reported "above average growth," partly due to Perry's aggressive advertising of ethnic products and partly due to its competitive pricing strategy of the top-tonnage items.

The category also seems to have "turned the corner," in one buyer's words, and is inching back into a growth mode.

Although there are still some problems in ethnic hair care, many sources said there were fewer declining segments in 1989, and more segments that were growing.

Some of the growth is dramatic, with increases as strong as 25 percent and 35 percent. However, because the growth is coming in categories like skin or hair accessories with relatively small dollar bases, it hasn't been able to offset the declines that some sources still see in the curl kits and curl maintenance segments.

With a few exceptions, most buyers report that their curl kit and curl maintenance products like activators and moisturizers are still down, by an average of 10 percent to 15 percent.

However, sales are up for relaxer kits, maintenance products for relaxers, hair color, hair sprays, shampoos, hair and scalp conditioners, light styling products, and skin care items.

Dry curls hot

The body-permed or dry-curl look is continuing to be popular, which has created a demand for retail maintenance products that let women maintain their salon styles.

At Beauty Enterprises in Hartford, Conn., buyer Jim Normandin said ethnic consumers are "paying more attention to their overall appearance than ever before."

As a result, Normandin reported that his skin care sales are up about 35 percent; hair color about 34 percent; hair accessories, 35 percent; styling gels, 26 percent; and shaving products, 21 percent.

Mike O'Neil, the ethnic products buyer for the Atlanta division of Harris Beauty Supply headquartered in Alexandria, Va., said that growth is also coming from new products that were created to help consumers maintain the currently popular salon styles like the dry perm or the body perm.

Leisure Curl was the first retail maintenance line for the dry perm and it continues to sell well. Soft Sheen launched a finishing mist and finishing lotion for people with dry perms, and buyers said they're both very hot right now. Pro Line has also introduced some maintenance items in this category, and buyers think they will also do well.

Because buyers have been looking at a flat category for several years, they've had to become more adept at maximizing the space they give it.

This has caused many chains like Peoples, Perry, Walgreens, Revco, and Eckerd to weed out slow movers so they could improve turns and concentrate on the top items.

Chains like Perry, Harco, Revco, and Walgreens have also become much more aware of intensifying competition from beauty and barber shops, food chains, and mass merchandisers like K mart. As a result, they've become much more competitive with their pricing and more efficient in promoting the category.

About a year ago Peoples reorganized its planogram, electing to merchandise most of the category by family lines rather than product segments. It began weeding out slow-turning, unproductive SKUs, thereby increasing turns and overall profitability for the category.

K mart, Drug Emporium, and Safeway also favor family sets in many markets, although it does vary by region.

Harris's O'Neil said that planograming by family makes it "easier" for customers to shop for hair care items, adding that the practice also creates more multiple sales.

Many chains are trying to be more creative with their promotional programs. Rather then just send out flyers week after week, many buyers strive to conduct at least one major promotion per quarter. They look for "something that will attract attention and build goodwill," one source said.

Williams said Peoples has done well promotionally by participating in the United Negro College Fund Telethon on local television stations. Peoples' employees donate time by manning phones during the telethon, and the chain makes a donation to the fund.

Perry Drug has created a special art scholarship for local high school students; Gorley said it has generated goodwill and has driven sales.