Specialty deodorants have helped supermarket retailers stay cool and secure despite the heat of competition from mass merchandisers.
These demographically targeted deodorants and antiperspirants -- teen, sport and sensitive skin -- are providing retailers with added sales in this mature category, according to retailers polled by SN.
However, buyers reported each of the specialty deodorant segments met with various degrees of success in their respective markets.
"The teen market has done really well, amazingly well. I was surprised," said a
buyer from a large Midwestern chain who wished to remain anonymous. She added that sensitive skin deodorants had done "marginally well," but in her market sport deodorants had done very little to excite her.
"The teen deodorants have really taken off," concurred Mitch Terry, manager of Fleming's Malone & Hyde general merchandise division in Miami. "Sensitive skins are also coming on in the category." He added, "I haven't seen a whole lot of sports." But Wyman Butler, nonfood merchandiser at J. H. Harvey in Nashville, Ga., disagreed. In the past month he has added about 10 new sports deodorant items because the sports segment has done very well for him. Teen products also have performed well at J.H. Harvey, he said, but added, "I would say that with our small company, [sensitive skin] is not a major thing." Joseph Faulhaber, health and beauty care manager at The Market Place, a two-store retailer based in Chicago, had a different take on the category. "Sensitive skin products are selling very well. Those are probably the best for us. The sports stuff is going pretty well also," he added. Yet Faulhaber summed up the conflicting reports on specific specialty sales when he said, "The area I'm in here may have a lot to do with it. You almost have to go according to geographic areas" to determine which specialty deodorants will sell.
Most retailers agreed on one thing, however: Specialty deodorants have affected their shelf-space considerations.
"Where I had two facings, now I just put one facing," said Faulhaber. "But a lot of the products have been taken out of boxes, so I've picked up quite a bit of space that way." "Basically we've gone back into the category and tried to redefine it, to change the mix," said Stan Zatica, vice president and head of nonfood at Z Inc.'s eight stores in Homedale, Idaho. "On average, we devote about 8 linear feet." Zatica said he has not, for the most part, actually increased category size in his stores. Many retailers agreed they have had to do the same.
Retailer advertising support has helped push sales of specialty deodorants, too. "As far as ad activity, we've done quite a few with [teens, sports and sensitive skin]. They've done pretty well. Usually we see at least a 50% to 100% increase in sales [with an ad]," said Jeff Kunnen, general merchandise and HBC director for the 11 stores of Family Fare Supermarkets, Hudsonville, Mich.
"We have back to school promotions [on the teen deodorants] and we periodically run ads on other specialties," said Joe Doran, GM/HBC buyer for Baker's, an 11-store chain based in Omaha, Neb. He also has noticed many cross-promotional tie-ins on deodorants of late. Zatica said his company "tries to run promotions on an endcap display," sales of which are driven by advertising. In addition to providing hot promotional opportunities and drawing increased attention to the overall deodorant category, specialty deodorants often yield higher margins than other HBC categories, as high as 30%, said Faulhaber.
"Specialties usually run a little bit higher. Probably up to 25% to 30% margins," said Kunnen, who gets 15% to 20% margins in the regular deodorant category. Teens, sports and sensitive skin products "are normally priced a little higher because they're specialty items," agreed Terry.
"In the grocery business, in our case, depending on brand, you get about 25% to 30% margins," said Zatica, but he added that in his stores, specialty deodorants usually generate the same margins as regular deodorants.
In the deodorant category, however, food stores have weapons against mass merchandisers other than just selling specialty deodorant lines. They have held their ground without sacrificing lucrative margins by stocking a variety of sizes and products, advertising and displaying other hot items, pricing competitively and capitalizing on manufacturer promotions.
Retailers concluded that savvy food stores can outmuscle other classes of trade when selling deodorants. All it takes, they said, is one part inspiration and one part perspiration.
"Offering a more extensive variety is a way to compete," said Terry. "Mass merchandisers may only carry the top four or five stockkeeping units, whereas supermarkets can carry the variety."
"To compete, you must have newness and have variety," agreed Doran.
Variety is one way for food stores to win deodorant sales, but pricing is important, too, said Zatica of Z Inc. "The [mass merchandisers] bastardize the category," he added, explaining that stores like Wal-Mart carry only a limited selection, but price it so cheaply it is difficult for supermarkets to match. "You don't have to meet [the mass merchandisers] head-on with pricing, but you have to come close. If you can get close and also provide all the things they can't provide, that's the key."
The buyer from the major Midwestern chain said her store has found another way to outwit mass merchandisers in the deodorant category.
"What we have found is that the larger sizes of the popular products seem to be selling pretty well. And those aren't the sizes the mass retailer is going after," said the buyer. She said in her store, because she doesn't have heated competition on large-size deodorants, she can get 25% to 30% margins. On small sizes, which mass merchandisers target, she gets margins of only 12% to 14%. "Those larger sizes seem to be selling very well," she continued. "So I guess that's where we're focusing some of our efforts. And on private label. Private label is a real key today to making some margins."
Still other buyers said variety and pricing weren't as important as cutting deals with manufacturers to improve advertising, displays and promotional tie-ins.
"You can place a shipper or get ad money for it or placement money [on deodorants]. You can do a lot of things other than just buying the product and selling the product," said Butler of J.H. Harvey. "You can have a good price on it, but the first thing is to get the product out in front of the consumer. A good off-shelf display sometimes will move a product more than putting a really good price on a regular shelf," he continued.
Faulhaber of The Market Place agreed that manufacturers make it easy to promote deodorant products.
"They offer money off invoices and billing. Plus additional money per case for buying. They're always offering money to buy or promote or just buy. They have a lot of reps out on the street pushing the products," he said.
Kunnen of Family Fare agreed that manufacturers have encouraged his deodorant sales with freestanding inserts and promotional allowances. "And there's a lot of couponing," said Terry, who also runs shippers on deodorants. The shippers have done well, he said, "and they enable you to cross-merchandise through the store."