Determining the ideal placement of the $303.6 million ethnic beauty care category (excluding cosmetics) often has been a hotly debated issue. At the Chicago-based American Health and Beauty Aids Institute's 2000 Mid-Year Business Conference, held here last month, the issue was again addressed during a retailer/distributor panel discussion.
Taking product from a consolidated ethnic section and cutting it into the general market offering (and in some cases, doing the reverse) is called "migration." It's part of a process of understanding what best suits market demands. And no matter what method each participant presented on the issue, most believed market demand is the determining factor.
"In my area, I am strongly committed to the totality of the ethnic category," said Pam Anderson, ethnic HBC buyer, Meijer, Grand Rapids, Mich. But, she added, in the subcategory of hair color, ethnic offerings go with the general market products.
"We listened to our customer base and that's what they want," she explained. "They told us that when they shop for hair color, they go to the hair color section. So we integrated that section."
Said Marie Hughes, ethnic HBC buyer, Wal-Mart, Bentonville, Ark., "Our ethnic toiletries are with men's toiletries. But in skin care I try to keep it with [the ethnic] section only because I think we can encourage additional sales by it being there."
For some, the steadfast approach is paying off. Walgreen Co., Deerfield, Ill., insists on integration, according to Ed Williams, vice president of store operations. "Product integration is something that I've believed in for a long time," Williams proclaimed. He gave mens shave as an example, saying that store demographics dictate the shelf prominence of shave powder. "Depending on movement, we will change shelf prominence," he said. "But you'll find it in the shave section; you'll never go to hair care in Walgreen looking for Magic Shave."
"Because we're still developing the category, we really want to keep it all together so we do not lose that share," explained Anderson. "You really won't get the same type of sales we are getting in my area when you try to break up all of the different product categories."
Anderson acknowledged, though, that growing ethnic population numbers may dictate future migration. Consultant projections at the conference said the African American population in this country is expected to increase two percentage points to 14% between 1999 and 2005. And, during the same period, the Hispanic population is expected to increase from 11% to 16% of the total U.S. population.
"Other buyers, looking strictly at dollars and cents, are not going to be focused enough on the importance of that category if they are integrated," said Anderson. "So until the culture really changes, I don't see the need to break it all out."
Tom Tyree, president of TWT Distributing, Charlotte, N.C., shared this perspective. "It may dilute focus on the ethnic category," he said. "Together in this room, we don't sell what a Suave shampoo can command in a Wal-Mart, Walgreens or Meijer. So my question is, how can we expect the consumer, based on the size of the ethnic shampoo section at the retail level, to find one jar of our best-selling shampoo out there?
"When you start talking about market share -- right now, we can define our market share as this (ethnic) category -- once you start cutting it apart and start dissecting and dividing up categories, we don't have market share."
Of the $303.6 million "ethnic care" category, as defined by Chicago-based Information Resources, drug stores lead with a 41.4% share of the business or $125.7 million. Supermarkets represent a 19.3% share of the business, totaling $58.6 million. Mass merchandisers grabbed a 39.3% stake of the business or $119.3 million. Ethnic care represents 4.3% of total hair and skin care dollars, according to IRI.
Having its own impact on the question of location within the store is the entry of the mega beauty companies into the ethnic beauty care segment -- L'Oreal USA, with Soft Sheen and now Carson's Dark & Lovely; Alberto-Culver with Pro-Line's Soft & Beautiful; and Colomer Group's acquisition of Revlon's ethnic and professional brands (African Pride). Companies like Procter & Gamble (Cover Girl, Oil of Olay) are more frequently targeting the ethnic consumer as well.
Aside from some integration of select sub-categories like mens toiletries, Hughes said she will compromise in some stores between the two merchandising extremes. In some locations, an ethnic hair color section has an adjacency to the general market hair care section. She suggested that area may be better referred to as "hair needs."
Dan Medow, president, Standard Distributing, Detroit, said that location of product "really depends on the needs and desires of the market and the retail operator. I've seen it go both ways; I'm not completely sure where these products should ultimately land."
Those who manage this category first hand identified maintaining an in-stock position as a major challenge when moving products around.