A new high-end leader has emerged in the pool of aerosol shaving creams and gels, causing a shake-up to occur in the formerly stagnant category, and launching a battle for supermarket shelf space.
To date, no brand has been knocked out of the competition. But manufacturers of the price-sensitive brands that lead the category have been offering bonus
While the net result for supermarket retailers has not been an increase in actual unit sales, the flurry of activity has resulted in an influx of dollars from the high-end products, according to retailers polled by SN.
Coupled with the ability to offer value-filled specials and promotions from competing brands, shaving preparations are receiving increased attention as an important product in supermarket health and beauty care departments.
"There was excitement in the category for a change because of the Gillette Series introduction," said Nick Borze, director of nonfood merchandising at Abco Markets, Phoenix.
Indeed, it was the introduction of the Gillette Cool Wave Series in January 1993 that started the whole cycle of increased competition in the shaving category. As soon as Gillette acted, other manufacturers responded.
"It always seems to happen in shave creams that when someone comes out with something new, you see a lot of buy-one-get-one-free [offers]. When somebody buys two or three cans of shaving cream, it takes them out of the market for a while," said Mark Beyer, HBC buyer for Copps Corp., Stevens Point, Wis.
And that's exactly what has happened. Not only have retailers reaped higher profit margins on the Gillette Series, they have been able to promote a variety of bonus packs, sizes and coupons being offered by competing manufacturers.
Roger Burks, senior vice president at Mad Butcher, Pine Bluff, Ark., said he regularly merchandises attractive display shippers of shaving preparations due to the generous allowances from manufacturers.
Other retailers said the bonus packs and discounts offered by Gillette's competitors have drawn customers to value-pack promotions.
"What seems to move shaving creams are bonus sizes, 20% more, 15% more. We promote those heavily," said Gary Schloss, vice president of general merchandise at Carr Gottstein Foods, Anchorage, Alaska. "If customers see an endcap of Colgate or Edge with a temporary price reduction, they'll buy it."
"It seems one brand always has a bonus size out," said James Neumann, general merchandise-HBC supervisor at Valu Discount Foods, Louisville, Ky. He said special offers, especially freestanding inserts, will continue in 1994.
One buyer from a major Northern chain who wished to remain anonymous said her store doesn't use displays to draw attention to aerosol shaving creams but instead uses price.
She said, however, her store gets negative margins on all brands of shaving cream except for the Gillette Series, which provides her store with a 25% profit margin.
A 7-ounce can of Gillette Series gel has a suggested retail of $2.69, nearly $1 more than Edge, the top-selling brand at supermarkets, capturing a 31% share of market.
"It might push some of your consumers into a better ring at the cash register by upgrading them into a higher-priced product, maybe a little superior product, as opposed to some of the low-end stuff that captures a tremendous share of the category -- which is good," said Borze.
"Having something new and exciting and a little bit more expensive for the consumer is a good way to drive dollars into the category. And I think [Gillette has] probably been successful in doing that."
Statistics back this theory. For the 12 months ended in December 1993, Towne-Oller & Associates reported that while unit sales of aerosol shave creams rose a mere 1% at supermarkets, the dollar volume share in the category was up 6%.
Borze added the Gillette series stockkeeping units are all near the top of their categories in his stores and the category of aerosol shave creams in general "represents tremendous dollars for the supermarket."
"The Gillette [Series], in every reset I've done, seems to be doing fairly well," agreed Leanne Burdge, nonfood merchandiser of the New Jersey North division for A&P, Montvale, N.J. She added the Series has done "very well" in the store's North Bergen branch.
But other retailers said while the higher margins on the Gillette Series are a plus, the product has proven too expensive for consumers and has been a sales disappointment.
"I think Gillette anticipated the kickoff they had for the Gillette Sensor. But the Series just hasn't taken hold. I've been a little disappointed in the way it's been selling," said Mitch Terry, general merchandise division sales manager in Miami for Fleming Cos.' Malone & Hyde division.
"Even if [consumers] just get a respectable shave with what they've got, they're not going to spend more" for the Gillette Series, said Rudy Tiemann, HBC buyer for Brenham Wholesale Grocery, Brenham, Texas. "Shave creams and gels are one of those categories retailers lowball all the time to get people into the stores," said Tiemann.
"It's a price-sensitive item. We try and stay competitive with Wal-Mart and Kmart on shaving creams and gels," said Burks of Mad Butcher. He added his supermarket gets a 4% to 6% margin on gels.
"It's a good margin, but it's not an extraordinary one for the category. There's a lot of things that you have to keep your margins pretty close on to remain competitive," added Borze, "especially with the mass merchandisers."
But Jim Key, nonfood direct-store buyer for Community Cash, Spartanburg, S.C., said aerosol shave preparations have "contributed a good bit to the category." And the shaving category could still grow some more, especially in women's and sensitive skin products, agreed many retailers.