The cosmetics and toiletries market climbed four percent in 2006. Consumers are not only buying more of these products, they are also going for more upscale units.
As this product category shows signs of increasing strength, drug stores are moving into the forefront. Many are stocking their shelves with upscale beauty brands and putting store consultants in their aisles.
According to a new study, Beauty Retailing USA 2006, by business consulting and market research firm, Kline & Co., the cosmetics and toiletries market's 2006 increase was the largest growth spurt in the past five years. While the department stores and food stores continue to lose share, the battle between drug stores and big box retailers, such as Target and Wal-Mart, is heating up.
"Companies like CVS and Brooks pharmacy are pairing boutique style service with the convenience of the local drug store as a way to compete with big box retailers," says Susan Babinsky, senior vice president and head of Kline's Consumer Products consulting practice. "They're hoping that this draws women back to the drug store, especially those looking for premium products that could previously be found only in spas and specialty shops."
In recent months, Walgreens, with the help of beauty marketing company, Excelsior Beauty, introduced the European Beauty Collection in about 1,000 of its top beauty stores. The collection is comprised of seven exclusive skin care lines from France, Germany, Spain, Switzerland and Greece.
Based on the success of the initiative, it is likely to be expanded to additional Walgreens locations. The products have an average price tag of $27 a unit. Walgreens currently has about 20,000 beauty advisors nationwide.
In addition, select CVS, Brooks and Duane Reade stores have in recent years implemented European style skin care boutiques that sell higher end skin care brands, such as those from Vichy Laboratories and L'Oreal and Avene from Pierre Fabre. The centers are staffed with trained beauty advisors who can help customers choose the products that best meet their skin care needs.
The boutiques also highlight the growing line of exclusive brands. For example, CVS highlights its exclusive Scandinavian beauty brand, Lumene, and NeoCeuticals by the dermatological company, NeoStrata.
By adding these high end brands, drug stores are hoping to gain a piece of the booming professional skin care market. According to Kline & Co., sales for this product segment are approaching $1 billion and have been growing at double digit rates over the past five years.
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