Traditionally procured, distributed, promoted, displayed and sold by the grocery department, the section appears to be making a transition to health and beauty care as one of the hottest topics in supermarket category management.
Among the chief reasons cited for switching is the fast growth in moisturizing bath washes, which are closely related to HBC's skin care products, including specialty bar soaps. Other reasons on behalf of switching include the ability to strengthen the skin care section, provide sales synergies and drive bar soap's high traffic into the HBC aisle.
Large chains moving past testing into full-scale switching include H.E. Butt Grocery Co., San Antonio; Hannaford Bros., Scarborough, Maine; Kroger Co., Cincinnati; Publix Super Markets, Lakeland, Fla.; Safeway, Pleasanton, Calif.; and Shaw's Supermarkets, East Bridgewater, Mass.
But many retailers, and most major wholesalers, have hung back or made only partial changes. Downside aspects of switching include: shopper complaints, insufficient HBC display space to assimilate bar soap, resistance from other departments, and logistical problems in procurement and distribution.
A roundtable panel on the topic, which took place earlier this year here during the General Merchandise Distributors HBC Marketing Conference, helped illuminate many aspects of the switching controversy.
Panelists were: Christie Frazier-Coleman, HBC category manager for Bashas' Markets, Phoenix, Ariz.; David Wesloh, general merchandise/HBC director at Farm Fresh, Norfolk, Va.; Ed Kolodzieski, vice president of strategic planning for Ingles Markets, Black Mountain, N.C.; David Musteric, merchandising director of the pharmacy drug stores division of Seaway Food Town, Maumee, Ohio; and Dewey Long, HBC category manager for United Grocers, Portland, Ore.
Although most panelists agreed that moving bar soaps is logical, few solid conclusions were reached. One appeal came through loud and clear: More research is needed and manufacturers should help provide it. Here are highlights from the discussion.
SN: What's your opinion on switching bar soaps from grocery to the HBC aisle? FRAZIER-COLEMAN:: The concept of switching is attractive because bar soap is a good tie-in with facial and body care lotions, as well as other skin products.
There are definite synergies in having bar soap with skin care. As people get older or begin to have skin problems, they may turn to a specialty bar soap or some type of product that is gentler on the skin or will medicate the skin in some way. If they have to go to two different locations in the store -- bar soap in one place, skin care in another, it's discouraging instead of encouraging the dual purchase of a regular soap and a specialty soap. If customers don't easily find what they are looking for, you'll almost force them into drug stores.
WESLOH: Fundamentally it makes a lot of sense from a category management standpoint. It follows just as it does that the same person who handles pet food should handle pet sundries and the same person who handles diapers should handle baby care and peg products.
KOLODZIESKI: We merchandise toys together with cereal. We merchandise the baking products together on the baking aisle. We have the mops and brooms over with the soap products. And, in these cases, the adjacencies make sense. The most important thing is, what does the customer think about it?
MUSTERIC: You know it is for cleansing the body, the same as shampoo and some of the other health and beauty care products, so logically they do belong together.
LONG: At United, we want to see if there are some efficiencies in bar soap switching; some way to drive costs out of the system. On the merchandising side, we want to see if it will drive incremental sales -- additional sales in the HBC department.
WESLOH: I have switched in five stores. In four stores we have been fairly successful in moving bar soap over to HBC. I believe in those stores it's because I have almost 20,000-square-feet of drug store [space] in those locations. So I have the space to be able to do it. I have 48 feet of skin care and 24 feet of bath, so bar soap fits right in there. I have enough traffic in that part of the store to bring people over. Where I wasn't successful was in the typical combination store. To try to squeeze bar soap into what is already a small HBC department is very difficult.
Actually, in some of my larger stores I display bar soap in two locations, still in the grocery aisle and in the HBC section. That is an ideal situation. But it's not going to work in every store. These happen to be 75,000- to 80,000-square-foot stores, where we can do things like that. When you get down to a 40,000-square-foot store, the return on two display positions is just not there.
MUSTERIC: Right now, our supermarkets put bath, Calgon and that type of product, and bar soaps together, but it is in the soap aisle.
LONG: We're a co-op with about 500 retailers, and by and large, they tend to be conservative. Some progressive operators, a dozen stores with pharmacies, would really like to give bar soap switching a try, but they're looking for some sort of evidence that says it makes sense for the stores and it makes sense for the customers.
I can't find the evidence out there. Manufacturers can't agree on where it should go. They should be the experts.
Even without hard evidence, I think switching bar soap makes sense logically. But, among other things, we have to consider the demographics. If we have a store in a retirement community, we don't want to be moving things around at all, ever.
KOLODZIESKI: We have not made this [bar soap switching] move. At Ingles, we are trying to understand what the customer wants. If the customer likes bar soap in HBC, we will do it. But we would like to do it as part of changing the overall store and not throw in what would seem to be a negative in other circumstances.
SN: Your concern over customer satisfaction or dissatisfaction seems to be big factor in moving bar soaps. Can you avoid making shoppers unhappy about such a move even if it benefits everyone?
FRAZIER-COLEMAN:: One of the things we've done in some resets and in some new stores is to configure the floor plan to locate the bar soap HBC aisle closer to the household aisle and the paper aisle. That way, household, paper and HBC are in the same vicinity so a shopper doesn't get halfway across the store and then figure out they have no bar soap where they typically would find it.
We have done a lot with bar soap signage in our larger stores, indicating where it's located. That has been a big help. But we have had customer complaints. It's only natural. When customers have a favorite store, it's partly because they have a shopping pattern they are used to and shopping is convenient. They know exactly where to go. When shopping patterns have been changed, the initial confusion is not long lasting; they can be re-established and customers get comfortable with it.
KOLODZIESKI: Christie is correct that customers are generally unhappy with change, but the problem can be reduced if you switch at the same time you're remerchandising the store.
WESLOH: Whenever we have a remodel or reset, the No. 1 complaint is that they can't find anything. But during the transition, if the switch is well signed and the customers are informed, you can overcome any confusion so that the customer gets used to the new position.
MUSTERIC: There are a lot of customers who have the notion that HBC is not something they look for in a supermarket, especially items like hair coloring, perms and things of that nature. These customers have the belief that either supermarkets lack the variety or don't have the right price. So they buy most HBC items at a mass merchant or drug store. The danger to the store in putting bar soap in the HBC aisle is that people may skip it altogether.
On the other hand, bar soap in HBC could be a driving force to get many customers down the HBC aisle because they are used to buying bar soap in a supermarket. Right now, that's where I would be leaning toward, to create a bath section that would enable the customer to buy all the products and see all the variety together in the HBC aisle.
FRAZIER-COLEMAN:: It all relates back to what's good for the customer, and management's appreciation of that. We are seeing a real resurgence in our company evaluating not only grocery and HBC categories, but also deli and produce departments. The goal is to enable customers to purchase what they want to buy, in the area of the store where they want to buy it.
For so long, we've done things because that's the way they have always been done, not necessarily because that's the way they should be done. But in the 1990s, management is going to continue to re-evaluate what is best for the customer and what offers the opportunity for expanded synergies to exist. That's the only way that I believe we will be able to survive.
There will be a lot of changes in the next few years with a lot of categories. Think about pet food and pet supplies and the baby aisle. You'll begin to see the buying separation for these lines become grayer and grayer as supermarkets begin to do what creates department synergies for increased sales. The barriers between departments will fall away.
SN: What's your feeling about rivalries between grocery and nonfood departments, and why would grocery want to give up a category that generated $1.1 billion in sales last year? WESLOH: I don't think it is necessary or mandatory that a move from grocery shelf display over to HBC display means that grocery has to give up procurement, managing, stocking duties -- and getting the ring. We have not done that. We have switched with some other products so that we can get things better aligned from a category management standpoint, but that has not really been an issue for us. The two departments work very well together.
FRAZIER-COLEMAN:: There is an attitude here that as long as bar soap is a grocery item, it gets respect. It gets front-page ads, end displays, pallet promotions and special treatment. One of the things our grocery buyer indicated to me was that if bar soap is moved into HBC, the nonfood department will try to raise the gross and never promote it. Sales will go down.
We would not necessarily raise the gross margin. We would love to be able to promote bar soap and put the pallets out on the floor if the store environment allows. So, there's a real danger that a company has to look at: If bar soap is going to be moved into HBC, are we going to let bar soap be promoted at the same level as before and have the same floor space and display opportunities that we were allowing before? Or, are we going to take the pallets and the ads that we were running for bar soaps and replace those with something else that we, as a grocery department, want to push? The thinking has to come from the top, from the feedback I receive. The fear of moving a grocery item into HBC can only be ended when HBC is no longer considered a stepchild.
WESLOH: Well, I am very successful with bar soap being with HBC. I have my own separate ad program for the larger stores because they are basically Drug Emporium franchise stores. It's very simple for me to advertise bar soap in those particular ads and it works very well.
But I share your concerns about the difference in mentality between grocery and HBC. They are different. They can oppose each other in a reverse way, too, as when an HBC category goes over to grocery and they start thinking cases and pallets.
In most of my conventional stores, if I managed bar soap, I couldn't put it in an end display or a pallet display. There is just not that kind of space available to me. So to promote bar soap in these stores with special display would require some kind of grocery support, and that is a difficult thing to bridge.
SN: If you don't have endcaps for your HBC in your conventional stores, it's hard to get to first base promotionally without them.
WESLOH: In many stores HBC is just down one aisle and that's it. And that's true for a lot of supermarkets, no endcap space for HBC.
KOLODZIESKI: Although my background is grocery, I feel that if you move the bar soap category to nonfood, that the HBC guys or gals are going to be thrilled and will probably do more with it than the grocery people do. There's a bunch of $2 million and $5 million categories in grocery, but you don't have many that size in HBC.
Bar soap is not exactly the No. 1 most exciting thing on the grocery side of the business. They are out there promoting soft drinks, paper towels and 12 packs of beer. When it's summertime, they're thinking about getting the paper plates out there, and mustard. Bar soaps are not on the radar screen.
We are extremely aggressive in nonfood and don't overlook pallet displays. In HBC, we do have endcaps and lobby displays, and we do have TV advertising. We do have HBC on the front page. And if you give a new multimillion-dollar category to those [nonfood] people, I think they are gong to go nuts with it. I believe the HBC people would welcome the opportunity because they are getting a big chunk of business they didn't have before.
Bar soap is a small category compared to other grocery categories. So, it might receive more tender loving care in the HBC category.
SN: What can be done to ease grocery's potential loss of bar soap procurement, sales and margin? In such cases is trading one category for another a feasible solution?
KOLODZIESKI: I don't think it's a matter of wrestling or arguing or trading. At the company I work for, politics doesn't come into play, managers have equity positions in the company. If there is clear and convincing evidence that switching bar soap is the right thing to do, I don't think we'd hesitate or argue. It would be, "This is the right thing to do," and we'd do it. Trouble is, clear and compelling evidence is in short supply. We have an unclear area here. If it's that way, the safe ground may be to leave well enough alone. That may be behind the resistance you see. If you feel the customers are basically satisfied with the bar soap location as it is and there's no compelling reason to change it, why go to the trouble? Why risk it? Now if someone comes up with the research we need, maybe we will jump on it and it may get done overnight.
The bar soap roundtable was conducted by SN special writer Glen Snyder of Snyder Consulting, Mamaroneck, N.Y. Special thanks go out to roundtable participants and the General Merchandise Distributors Council, Colorado Springs, Colo., for providing the venue, and Lever Bros., New York, as a special sponsor.