A NEW FACE FOR HBC 2003-11-10 (2)

DAN ALAIMO

PITTSBURGH -- Giant Eagle wants to capture more of the B in HBC.

A prototype health and beauty care section unveiled late last month at the retailer's new 85,000-square-foot flagship store in Lyndhurst, Ohio, includes numerous merchandising advances aimed at gaining more beauty product sales, while establishing the overall HBC section as more of an enjoyable destination in consumers' minds, said George McGrady, director of HBC merchandising.

"We enjoy a pretty healthy share when you compare Giant Eagle to other food stores. We want to improve that closure rate and get the folks who are in our stores every week making their other purchases to think more about us for all of their health and beauty care needs," McGrady said.

"And clearly we are trying to emphasize the beauty categories," he said.

The prototype will be extended quickly to four more stores by the end of the year, then the retailer will watch and evaluate it, McGrady said. After that, "we've identified 30 existing locations that we'd like to put this in and I also envision some components of this going into newer stores, as well," he said. He characterized the design as "a work in progress."

The prototype is a radical departure from Giant Eagle's recent department configurations, SN found in visiting the store prior to its opening. While most of the health-related products are stocked in regular aisles near the pharmacy, the beauty products are displayed in aisles at an angle from the others.

This area is further highlighted by a large metal ring suspended from the ceiling signed, "Health and Beauty." Numerous photos of attention-getting women's faces adorn endcaps and freestanding displays of cosmetics, and bath and body products.

"We wanted to really differentiate our health and beauty care department from our competitors, as well as make it stand out within the store itself, and enhance the store-within-a-store concept," McGrady said.

Who are Giant Eagle's competitors in HBC? "Anybody who is participating in HBC. Mainly, we think of mass, we think of drug stores, and we think of other food competitors," he said. The new environment compares favorably with any of these, industry observers noted.

The department presents a higher-end image than many of the retailer's other stores, but it coincidental that it is located in the Cleveland metro area's most au courant shopping center, McGrady said. The location of the new prototype came mostly down to timing -- this was the store that was opening at the time the retailer was ready to begin its test, he said.

But the Lyndhurst store is in the new Legacy Village "lifestyle center," a mixed-use development that includes upscale merchants, restaurants and office space in an open-air, town-square environment.

"We've been working on the initiative for a while, and the timing was right for this store," McGrady said. The new HBC section was a collaborative effort among Giant Eagle, Chase Design, New York, and Procter & Gamble, Cincinnati, he said.

The Giant Eagle store includes unique design elements, such as the use of wood and warm colors, and its first Starbucks-licensed location in an Ohio store, noted Kevin Srigley, vice president, marketing. "We'd like to think that from the decor standpoint we have really enhanced the offering to our customers in a friendly, welcoming, warm environment, with a wide variety of both perishable and non-perishable products that is beyond anything we have offered in any other store," he said.

Other departments include the adjacent Gift Garden and Card Party sections, which include Hallmark products and a Teddy Bear Stuffers station, as well as an elaborate Chef's Shelf culinary department. The video rental department has a new circular customer service counter, and a recently designed sell-through catalog display on the main selling floor.

The store also has a large wine department, a photo center with digital capabilities, a chef demonstration station and an on-site chocolatier. "This is the quintessential store in Cleveland for variety, for service and for depth of product," Anthony Rego, vice chairman, Giant Eagle, told SN.

"In general, what we've tried to do at Giant Eagle, and specifically in this store, is meet customers' needs for frequently made trips," Srigley said. He pointed to the greeting card and gift section, a U.S. Bank branch, a PostNet mailing and mailbox center, video rental and sales, a photo counter that emphasizes the processing of digital images, the pharmacy with its face-to-face drive-through window, and other services as addressing consumer demand for convenience.

But more than that, it also provides an entertaining environment for the consumer. "What you see across this store is a lot of retail-tainment. A lot of it is focused on food, but it is certainly focused on other areas as well, whether it is people being provided with information at the pharmacy counter, to stuffing teddy bears, to tasting Kobe beef in our meat department," he said.

HBC continues to be an area of focus for Giant Eagle, he said. "And in this particular store, there is a bigger emphasis on beauty in a way that sets it off from the health needs. Because of that, there have been some enhancements to the variety of the beauty area," Srigley said. In spite of the upscale presentation, "we are making sure that people feel that we are offering them a wide variety of health and beauty products at a competitive price," he said.

But the new HBC area is also part of the retail-tainment in the new store, McGrady said.

"We hope that the customers receive this and, whether intentionally or not, feel like a warm, invited guest into those departments," he said. "We really want our customers to think about beauty, and to think about Giant Eagle not only as a place to pick up prescriptions and over-the-counter medications, but to think of us for their beauty needs. These include the specialty bath items, the cosmetic items, the hair colors, the hair accessories, the skin care items, the things that women feel are more fun to buy than the necessity items," he said.

Making it easy for customers to shop the department is another priority, McGrady said. He described the ring above the HBC area as "the first level of navigation ... to identify the department. Then as the customer gets closer, we have it broken down into three distinct zones, and we've used a combination of coloring, fixturing and other design elements to break out the zones." The zones are: health, personal care and beauty, he noted.

"As you get within each of those zones, we use color, some more descriptive signage, and in some instances, some educational materials to be more category specific and help the customers make purchase decisions at shelf level," he said.

In a larger store that Giant Eagle is remodeling in the Pittsburgh area, the HBC department will have even more enhancements, McGrady said. For instance, while the beauty products will be on an angle from the other aisles and the personal care categories will be aligned with the rest of the store, the health product aisles will be perpendicular. "These are just visual signals that something is different," he said.

Besides customer "shopability," the retailer also wanted to make the department a warm and inviting area for female customers. "We want them to come in and have a sense that they could spend some time in that department, and hopefully have some fun doing it," McGrady said.

The big pictures of women's faces above the endcaps are part of that atmosphere. "It's a wide range of everyday people in different life stages. Hopefully, our customers will connect with some of those photographs," he said.

Another retail element Giant Eagle is trying in the HBC area is freestanding circular display units, also topped by the big photos. "We are using those to supplement the everyday shelf items. We think some combination of those will be a better use of space," he said.

These units will be seasonal, changing with time of year and holidays. "As the seasons present themselves, they will rotate in and out. You will see different offerings for the upcoming holiday season, and different offerings again for Valentine's Day and Mother's Day," he said.

Giant Eagle also is out to take advantage of the natural synergies between HBC and the pharmacy, he said. "We think it is a great fit, and we have the health-related categories closest to the pharmacy to make it easier for the pharmacist-customer interaction in assisting them in making purchase recommendations for over-the-counter products," McGrady said.

In sum, the new store is representative of Giant Eagle's ongoing commitment to nonfood and HBC, McGrady said. "We recognize them as specific lines of business that is important to our customers and important to us. We want to find ways to continue to grow those businesses and have our customers think about us for them," he said.