Selection of skin care products at supermarkets is improving and supermarket prices in the category aren't much higher than at discount stores or drug stores, according to an SN consumer survey on shopping habits.
The survey of 1,000 consumers, commissioned by Supermarket News and conducted by America's Research Group, Charleston, S.C., found that the average person shopping for skin care at a supermarket is a 46-year-old married mother with some college education who owns a home. Because women in this demographic group are important to supermarkets, it follows that skin care is an important category for food stores to develop.
The survey found that 69.4% of consumers said supermarkets have a wider selection of upscale skin care products than they did two years ago. Only 19.7% said supermarkets have not improved their selection of skin care products, while 10.9% said they did not know.
Furthermore, only 11.1% of those polled said supermarket
prices for skin care products were much higher than discount stores and drug stores. Nearly half, 45.5%, said supermarket skin care prices were a few cents higher, about the same or lower than at the other two classes of trade. About two in five, 42.4%, said supermarket skin care prices were somewhat higher than at discount and drug channels.
The improvement of selection and price could be keys to breaking open the skin care market at supermarkets. The survey found that when trying to decide where to shop for all beauty care products, price, 36%, and selection/variety, 22.2%, were the two most important factors to consumers. The bad news for supermarkets was that despite their strong showing in key areas of skin care marketing, 37.3% of people still said they are most likely to purchase a skin care product at a discount store such as Wal-Mart or Kmart.
For 31.5% of consumers, the chosen source of skin care products was the drug store. Supermarkets pulled in 17.7% of skin care consumers, or nearly one in five polled. Department stores drew 7.2% of consumers to their skin care aisles, followed by Avon, club or warehouse stores, and Mary Kay all near 1%, according to the survey.
Sales figures from Nielsen North America, Northbrook, Ill., for the 52 weeks ended March 12, 1994, confirmed supermarkets' quandary, but did provide a glimmer of hope.
According to Nielsen, drug stores led the way in skin care dollar sales, raking in $853 million, or 42.5% of the category, up a slight 1.7% from the previous year. Sales of skin care at mass merchant outlets soared 27.6% to $602 million, or 30% of the category's dollar share. Food stores trailed, with skin care sales of $551 million, or 27.4% of the category. But their sales were up 6.9% from the previous year.
"It's hard to compete with your drug stores and bigger discount stores as far as space [in the skin care category], especially on some of the higher end, higher priced items," said Randall King, HBC buyer at Byrd Food Stores, Burlington, N.C., who said discount stores' ranking at No. 1 did not surprise him. "In a lot of stores you don't have the clientele or the space to carry a lot of those skin care items. That's probably where [supermarkets] are losing a lot of sales. Supermarkets could do better than [17.7%], but it's not too bad."
King added, however, that "over the last couple of years, you see more and more [skin care] items coming out and grocery stores picking them up that used to be mainly drug store items.
"It's hard to figure out what to stock," he said. "You have to go by feeling a lot of times [on new items] and look at the movement of other items already in the category and see what you can get rid of."
Renee Seaman, HBC buyer
for Rogers Markets, Fort Wayne, Ind., agreed discount stores' position as the likeliest destination for skin care didn't surprise her because supermarkets often lack space for the products and many times, are limited by what their suppliers carry. "A lot of supermarkets don't even carry many skin care products. That's the biggest problem," she said.
When asked for a solution for food stores, Seaman laughed: "Bigger stores, they'd be nice." But, she said, more seriously, "you can use couponing or special promotions. And skin care selection [at supermarkets] has improved, but a lot depends on what your warehouse carries, too. Supermarkets can boost their share as the category grows, and if a greater variety of products are made available to us, then it might be more of a viable category and space might be more easily allocated."
Laurie Platter, HBC buyer at Fareway Stores, a 59-store chain based in Boone, Iowa, had a similar explanation for supermarkets' skin care woes.
"Our biggest challenge as a supermarket is that discount stores have more space to display, and that gives them more selection," she said, but added that supermarkets can still compete on price.
"Our pricing is good, depending on the item. We carry [some products] where other outlets carry higher prices than us," Platter noted."It's not easy to let people know our prices are competitive. It's hard to change consumers' perceptions about food stores. But signage and advertising might be the best way to do it."
Seaman said the consumer perception that skin care prices at supermarkets aren't much different than at discount or drug stores is true, but supermarkets need to work hard to make the public aware of this.
"These prices have to be promoted first before you'll see anything change. You've got to get the customer in the aisle looking at the section before anything is going to change their mind," she explained. "If they don't know [the prices are competitive], then it doesn't matter."
King and Platter echoed Seaman's statements.
"There's not much difference in skin care prices at all" among food, drug and mass outlets, King said. "But you have to be visible about it. To let people know, the only thing you can do is put signs on the product and hope it gets their attention. We do advertising on some of the lotions, but not on higher end products."
Platter said use of signs and advertising were the best tools for promoting skin care prices as well.
Making a commitment to overall HBC selection and becoming a truly visible HBC player also has a positive effect on skin care sales.
Of people who believe supermarkets' overall health and beauty care selection has improved in the last two years, the majority, 33.6%, said they are most likely to buy skin care products at a supermarket. Of those people, discount stores ranked second with 28.6% and drug stores were third with 26.9%. These people also gave supermarkets better scores on pricing.
King said these statistics may indicate that a better overall HBC selection at food stores can change consumers' perceptions and give them a more positive view of individual HBC categories.
When consumers who are loyal to a particular skin care product were asked what would most influence them to try a new skin care product, the majority, 28%, said coupons.
Seaman said that did not surprise her, since "coupons are really effective in skin care."
King agreed that "coupons could be effective on some items, like a lot of the regular skin lotions, but not really on the higher end products. It depends on the item. A lot of items have to do with advertising in ladies' magazines, the higher end items anyway."
A display with a special price would most influence 25.1% of respondents to try a new skin care product, followed by: in-store sampling/demonstration, 18.9%; incidents in which the store doesn't have the customer's brand, 13.4%; a radio/television/magazine ad, 8.8%. A small number, 5.3%, said nothing would influence them to change skin care brands.
Overall though, only 42.5% of consumers said they had purchased a skin care product at a supermarket in the past year. The majority, 57.5%, said no.
WHERE SKIN CARE SHOPPERS SHOP
Nearly two out of every five people said they were most likely to head to discount stores to buy skin care products. Drug stores and supermarkets scampered home second and third, respectively, in the race for skin care sales. Where are you most likely to purchase skin care products?
Discount store 37.3%
Drug store 31.5%
Supermarket 17.7%
Department store 7.2 %
Avon 1.4%
Club/warehouse store 1.2%
Miscellaneous 3.7%
TRADING UP
Nearly three in four women and more than three in five men said they notice more upscale skin care products on supermarket shelves than they did two years ago. Men were more likely not to notice if there was a difference than women. Are you able to find a wider selection of upscale skin care products at supermarkets today than you were two years ago?
YES Men 65.3% Women 72.6%
NO Men 20.3% Women 19.2%
DON'T KNOW Men 14.4% Women 8.2%
PRICES APPROACH PARITY
Nearly half of all consumers consider supermarket prices a few cents higher, about the same or lower than prices at drug stores and discount stores. But more than two in five still said supermarkets were somewhat high, compared with competing classes of trade. Compared to drug stores and discount stores, skin care products at supermarkets are priced:
Much Higher 11.1%
Somewhat Higher 42.4%
A Few Cents Higher 20.7%
About the Same 22.3%
Lower 2.5%
Don't Know 1.0%
LOYALTY BUSTERS
Price always seems to reign in HBC, and apparently skin care is no exception. Consumers cited a coupon as the No. 1 reason they would turn away from a product they were loyal to and switch to a new product. If you are loyal to a particular skin care product, which would most influence you to try a new product?
