Women’s Wear Daily
04.16.2014
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beauty-features

A New Face: Rite Aid Reformats to Pump Up Beauty Sales

After examining beauty sales trends for the past seven years, Rite Aid category manager Judy Wray felt it was time for a new approach.

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NEW YORK — Judy Wray, category manager at Rite Aid, has been doing some heavy lifting.

In an exclusive interview with WWD, Wray shared her chain's beauty plans, a rare turn for the press-shy retailer; a near anomaly for the media-eluding mass drugstore industry.

After examining industry beauty sales trends over the past seven years, Wray said it was time for new thinking and new layouts.

"It became very clear to me that there are new opportunities to expand color cosmetics. I walked through each of my planograms and studied displays to find ways to boost our profitability per linear foot," said Wray, one of the most respected merchants in the chain drugstore business.

In particular, Wray was looking to make more sense out of merchandising adjacencies. The idea was sparked when she needed a spot to merchandise Sally Hansen's Airbrush Legs. Wray was faced with squeezing it into an area where shoppers had to really hunt to find it. The item was such a success that shoppers did seek it out, but it got Wray thinking of ways to optimize her department. She also needed a new home for cosmetics bags and depilatories. "These conversations started a whole cascading effect," she recalled.

After months and months of reviewing vendor lines and looking at new launches, several new planograms were born. A particular challenge for Wray was that since Rite Aid has grown via acquisitions, there were varying layouts. "It is like a Rubik's Cube," joked Wray.

Rite Aid, which generated $16.8 billion for the 52-week fiscal year ended Feb. 26, accounts health and beauty sales at 4.8 percent of overall sales, or $806 million, according to the company's annual report.

Despite the patchwork of planograms, all stores were successfully reset between April and the end of June.

Additionally, Rite Aid has a new prototype called Customer World with a dramatic beauty department front and center in the store. Currently Rite Aid has eight of these Customer World stores. The newest opened in Enon, Ohio, on July 1, an 11,153-square-foot unit designed to "improve our competitive positioning and emphasize our commitment to customers in our existing markets," said Jay Ross, Rite Aid vice president of marketing and store prototype project managers.
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While beauty has a starring role in the Customer World stores, Wray hopes the tweaking in existing stores pays off with consumers — especially men. "We found that although 66 percent of consumers walking through our stores are female, 34 percent are men," said Wray. To cater to them, one major change at Rite Aid is the creation of a men's grooming section.

Men shop differently from women, said Wray. They don't bargain shop, they don't use coupons and they spend less time looking for a product. If they can't find a product, they'll leave the store rather than ask.

To clear room for men's, Rite Aid relocated depilatories. The new men's area pulls together regimen lines such as L'Oréal's Men's Expert and Nivea for Men, Axe, body washes, hair care, hair color and exclusive Rite Aid products, such as Philip for Men from Swissological.

There is also a new spa section starring Rite Aid exclusive and limited-distribution brands. Like many buyers, Wray has seen the ebb and flow of spa and bath product sales. Wray likes exclusive brands available for limited times at Rite Aid because these items serve two purposes: They help Rite Aid stand out from the competition, but don't require the constant marketing push of a proprietary label. A perfect example is Mod Spa, which was created by Delicious Brands LLC for an initial exclusive launch at Rite Aid. After a year, the brand will be available to other retailers.

"We are absolutely looking for ways to offer our customers something new and with a point of difference from competitors," said Wray. Another example is Swissological, which is beating expectations. Another Rite Aid exclusive, Pure Spring, is a collection of natural bath and body products.

In beauty, Wray is using the limited exclusive philosophy to launch Jesse's Girl, a youthful line from CRL Marketing. Jesse's Girl is exclusive in Rite Aid through January 2006.

Wray is a huge supporter of up-and-coming beauty brands, especially because when she looks at her numbers, many of these lines have produced her biggest increases. She's also culling slower movers in many stores to make more space for Jane Cosmetics and Physicians Formula.
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Other changes on the wall include a new Cover Girl fixture. Since the products are now uncarded, the presentation requires less space. The additional space cleared footage for a new cosmetics bag department on the peg wall.

L'Oréal and Maybelline footage remains the same. However, more stores will be set up with Maybelline's Urban wall — a hip, upscale look designed to appeal to fashion-forward shoppers. Neutrogena also has new racks and Almay has exclusive graphics. Prestige Cosmetics is being moved to a more visible location. To better serve women of color, Rite Aid expanded the space for Black Radiance, Black Opal and Tropez.

Thanks to coordination with vendors and the hard work of the Rite Aid team, Wray said the reset of 3,400-plus stores has come off virtually "without a hitch." While stores were being reset, Rite Aid ensured new items were tagged with special new product signs so shoppers could quickly find hot launches. She expects there will be some shaking out of sales gains at first, but that as the new looks get clicking on all cylinders, Rite Aid will continue to outpace competitors in sales gains.

Concluded Wray, "Rite Aid has maintained a higher increase in beauty sales versus other drug chains and this new reset will help us continue and exceed that leadership."
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