By Howard Riell, Associate Editor
Though retail channels continue to blur, one category where convenience stores still trail their mass, drug and dollar store counterparts is health and beauty aids (HBA).
One advantage that does work in c-stores’ favor is, of course, convenience. Many time-strapped patrons don’t particularly care to wander through the broad retail landscape for a couple of aspirin or a quick mascara fix.
So, it’s crucial for c-stores to maintain their natural advantage by keeping the leading brands in stock—in handy package sizes—while eliminating too much inventory in the backroom.
SLICE OF THE PIE
Grabbing a bigger slice of the HBA makes sense, especially as category sales continue to grow.
Total retail sales of beauty products are expected to reach $42.5 billion in 2019, up 12% from 2014, according to Mintel Group Ltd. Color cosmetics maintain the highest market share at 25.3%, up 3% in 2014 versus 2013. The group also found that men are more engaged in personal beauty care than ever before, a fact that smart c-store retailers will heed.
“HBA is a category that is needed in c-stores,” said Mark Freshour, store operations manager for Greeneville Oil & Petroleum Inc., which operates 38 Quick Stop Market convenience stores throughout Tennessee. “Sales are increasing incrementally in most of our stores at this time.”
Freshour acknowledged it’s been challenging the last five years for the chain to find its place in the local market. “Several years ago we were the drug store during after-hours. Now every town has drug stores that stay open 24 hours.”
Quick Stop has grown its HBA business by switching from larger-name brand products to single or small multiple-dose products. It has also changed to less expensive generic products in higher-count packages.
“There is still room for significant growth in the category when manufacturers figure out the profit potential of packaging several other products—feminine hygiene, diapers, wipes, etc.—into smaller, lower-priced sizes for immediate use,” Freshour said. “The best items in our stores are still headache powders, such as Goody’s. The smaller sizes and packages are an area in which the rest of the market does not really compete.”
Tony Bonnell, director of retail for Feather Petroleum Co. in Grand Junction, Colo., which operates 16 Stop-N-Save stores in Colorado, said he sees the category going strong, largely on the strength of customer value proposition brands. Cold/flu and headache products move most quickly, he reported, and customers show a marked preference for smaller, to-go package sizes.
Stop-N-Save maintains four-foot sections for HBA offerings in most of its stores, Bonnell said, which seem the most efficient layout.
“It appears that if you go larger than that, you don’t get a return on space,” said Bonnell.
For some c-stores, an effective HBA strategy centers on planning.
“It’s very solid,” reported Dave Simendinger, owner and president of Champlain Farms, the operator of 39 convenience stores in Vermont and New Hampshire. “We have it on an endcap right up front because of thievery. We enjoy the category.”
While Champlain Farms is doing well with a loyalty program that gives repeat customers 50 cents to $1 off on a gallon of gas, it also strives to make the most of impulse sales, which is easier at some locations than at others.
“If you need a headache pill you come in and buy aspirin,” Simendinger said. “When we’re near a hotel we do great because people need to buy hair brushes and toothbrushes and all sorts of stuff.” For these shoppers, having the proper packaging can prove invaluable, a message Simendinger hopes suppliers recognize.
“With aspirin, if they try and put the bigger boxes in because they’re a bigger ring I don’t know how successful that is going to be. I don’t know if anyone wants to buy a big box of Advil.”
The chain’s merchandisers also respect the value of well-established brands. “When it comes to the (cold and) headache stuff, it’s Advil, Clear Eyes, NoDoz, Alleve, Ibuprofen, Tylenol, Ricola, DayQuil, Zantac—then it drops off quick,” Simendinger said. “The top items are 90% of what we do.”
Carrying more SKUs may not necessarily translate into more sales. “If you’re going to add more items, you’d better really know what you’re adding, because just expanding that category isn’t going to guarantee any success here,” Simendinger said. “Just because you add more flavors of Gatorade or Powerade doesn’t mean you’re doing to sell one more bit of it.”
ALL WORK AND NO DISPLAY…
Another hint to sell by is how your HBA should be displayed on the floor.
“In reference to health and beauty aids, if you have them in a c-store, don’t put them next to cigarettes, trinkets and trash,” said Deborah Holand, senior consulting partner with b2b Solutions, LLC, a retail consultancy in Lake Forest, Ill. “Make the display appealing to women, and compete against the supermarket and drug store channels in presentation style. Give the display some pizzazz, and have the basics with a heavier emphasis on impulse items.”
One of the things that has helped spur the growth of HBA in c-stores is the need to have them available more conveniently for roadside travel, said Andy Revella, whose Dallas-based design and development firm, Vision 360, consults with a wide range of regional and national clients, including convenience stores.
The consultant said younger female consumers prefer smaller sizes, with the ability to experiment more for less cost.
“You need to understand the importance, and the fact that not so much health but beauty aids are purchased differently today because of the changing lifestyle culture of our society as a whole,” said Revella.
The items that are working best, he has found, are cosmetics like lipsticks, eye liners and hair spray in smaller sizes along with conditioners.
“I’ve seen sales jump as much as 50% when we put together an area that includes a built-in mirror. As long as it is not a total non-name brand they will try it,” Revella said.
Women are relying more on convenience stores, Revella added.
“So both small travel sizes and closer-to-the-center items displayed with a serious intent to sell works,” he said. “It has to look like we are serious about the product, so the set-up is very important. Then, better selected items like Emory boards, lip gloss and items that are not too expensive or ‘dollar store’ quality sell well.”
Ric Anderson, managing partner of the Retail Think Tank, a consultancy in Frisco, Texas, said c-stores can succeed in HBA if they will take the time, effort and strategy to build private brands that actually mean something to the customer.
“Most have generic or (big name) brands, rather than creating a value to the customer through branding. In addition, make it a separate section of the store with different visuals that call those products out as a separate section.”
While c-store operators will need to build brand equity, Anderson conceded, over time the store can become a destination. “Under-price the national brands with a better product. Create a value that the customer understands and accepts.”