MAULDIN, S.C. -- Bi-Lo here, spurred on by a gain in market share after remerchandising its shampoo section, will apply category analysis chainwide to other leading health and beauty care categories.
The 260-store chain will next target analgesics, cough and cold, and then stomach remedies for revaluation, said Randy Guttery, Bi-Lo's HBC buyer. All resets resulting from the analysis will be implemented at all stores, as was shampoo. Although Bi-Lo has actively pursued category analysis in its food departments, the shampoo revamping was a major effort in a nonfood segment.
"As a part of our category analysis we look at product productivity on a stockkeeping-unit by stockkeeping-unit basis," said Guttery.
He said Bi-Lo sales in the shampoo category are now running ahead of the market average by about 0.6%. "That's a very good showing in a highly competitive category," he added.
Bi-Lo began to take a hard look at all the data available in its shampoo category earlier this year. The retailer analyzed the category using data from Nielsen North America, Schaumburg, Ill., Information Resources Inc., Chicago, and information from its own in-store scanning to determine which products were moving in dollar sales and units sold. What Bi-Lo found, according to Guttery, was that its shampoo selection was stocked in favor of low-priced products, such as White Rain and Suave. Bi-Lo also found that among the low-priced brands, consumers tend to shop price, and will make a selection based upon the brand that is on
sale on a particular week. However, Bi-lo also determined that consumers are much more apt to shop for their favorite premium brands regardless of price differences. Therefore, Bi-Lo added to the Salon Selectives, Pantene, Vidal Sassoon and Finesse lines, among others. Several SKUs of White Rain were dropped and the Suave line was reorganized.
"Our analysis showed us that we were severely over-SKUed in bargain brands and under-SKUed in the premium brands," said Guttery. In all, 75 SKUs were discontinued and 75 SKUs were added to the mix.
Bi-Lo's analysis also helped to determine a pattern in customers shopping habits and movement through the HBC aisle, resulting in the new shampoo set implemented in early spring.
"One of the things we did was set the planogram so that the shelf position was with those brands where we received a larger per unit retail and more gross profit," Guttery said. "At the same time, because they were the ones where the customer was stopping and shopping, we put those products first in line and removed them from the middle of the shelf where they were lost." Guttery added, "We changed brand positions according to consumer preference. And this has helped sales significantly." In analyzing hair care, Bi-Lo broke the category down into as many different components as possible and viewed each component separately. "We tried to really refine how we looked at the different parts of the whole category. We even broke it down into bargain brands and premium brands," said Guttery.
Bi-Lo has been faced with strong competition from the mass merchandisers in HBC. More sophisticated and finely honed product analysis is part of the chain's strategic response to the supercenters.
"Business is good," said Guttery. "We've really worked hard to increase our assortment in terms of what the customer wants. We really do price down and dirty with the mass merchandisers. We don't try to beat them on price. But, on all the key items, we do try to match them. We are in business to stay."