WALNUT CREEK, Calif. -- Two drug chains -- Longs Drug Stores here and CVS, Woonsocket, R.I. -- have launched major bath/body category branding initiatives.
The bath/body category has been a focus for many supermarket chains that have set up destination departments to capture the high-profit impulse sales of a growing lifestyle segment associated with well being.
Both Longs and CVS are attempting to do the same thing by developing private-label brands that will stand on their own and compete directly with manufacturer's branded lines like Sarah Michaels.
Longs launched Spa essence earlier this month in all 417 stores in California, Hawaii, Washington, Nevada, Colorado and Oregon. It's a line of 36 products formulated with botanicals, essential oils and vitamins A, C and E, targeted to women and tagged with the line "for the Being, Mind, Soul and Spirit." Individual product prices range from $1.49 to $6.99. Gift sets are available for $13.99 to $15.99.
"The launch of this product line is consistent with our new brand promise, which focuses on the health and well being of our customers," said Steve Roath, Longs president and chief executive officer in a press statement.
Beginning May 19, the line will be promoted in a special weekly circular distributed to 8 million households.
CVS introduced "Essence of Beauty" in 4,100 stores last month and on its Web site, www.CVS.com. The 75-stockkeeping unit collection includes loofahs, gels, bath salts and candles.
The line differs from a traditional private-label offering, according to company spokesman Todd Andrews. "It's not private label; it's a brand," he said, adding that the difference is that packaging does not carry the retailer logos. Some packaging, however, does say that product is distributed by CVS. Additionally, the retailer's circular that accompanied the launch, said the line was "sold exclusively at CVS/pharmacy."
"From packaging to marketing, everything is meant to stand on its own as its own brand," said Andrews. "Private label here is a CVS brand product or CVS Gold Label product, where the CVS name is part of the branding of the product. Essence of Beauty is designed to be something different."
Supermarkets were just ahead of drug stores but both were behind mass merchants when it came to share of the $177.4 million "bath fragrance/bubble bath" category, which also includes bath gels, according to Information Resources, Chicago. For the 52-week period ending March 26, mass merchants' $92.3 million in dollar sales gave them a 52% share. Supermarkets took a 24.2% share with $42.9 million in dollar sales and drug stores took the smallest share -- 23.8% -- with $42.2 million in sales.
Encouraging for these two ventures, however, is the fact that for the same 52-week period, private label was second in dollar sales behind Vaseline Intensive Care bath products. With sales flat over the period, private label hovered at $16.7 million as compared to Vaseline's $21.3 million. Mr. Bubbles Bath, marketed by Playtex Products, Westport, Conn., showed a 24% gain in sales to $11.8 million and came in third behind private label.
When asked how it would compete, as well as go up against other branded lines, Andrews said, "We think it's going to be very solid for us, competing very favorably with any offering in this category." He declined to discuss sales or market share projections.
Brian Sharoff, president of the Private Label Manufacturers Association, N.Y., said CVS is launching the line "to make money."
"To the extent that they attempt to sell [major manufacturer] branded products, they have to compete on price," he continued. "Competition is extremely severe with the mass merchandisers on one side and supermarkets on the other. So as they compete on price, they begin to erode their margins and when they erode their margins, they make no profits."
Private label allows a retailer to reinforce the image of its store, control costs as well as delivering bottom-line profits from that department, said Sharoff.
Essence of Beauty carries a price range of $1.99 to $10. Marketed as a "high-quality" line, according to the company, the line is backed by an unconditional money-back guarantee, as is the Longs' Spa essence line.