WILD ABOUT HEALTH

Dan Alaimo

BOULDER, Colo. -- Information and education are driving the expansion of store-within-a-store Holistic Health departments at Wild Oats Markets.

In its new stores, the natural and organic supermarket chain is setting aside store-within-a-store areas devoted to health and beauty, as well as some general merchandise products it refers to as "mercantile," Steve Davis, vice president of Holistic Health, told SN. A new Wild Oats in Scottsdale, Ariz., visited by SN, devoted about 1,900 square feet to the section in a prominent front corner of the store near the sit-down eating area.

"Wild Oats is a very upscale specialty market with a lot of epicurean offerings, along with a Holistic Health department that we believe is second to none," Davis said.

"Holistic Health is a significant percentage of the business and will continue to be emphasized in our formats in the future," he said. Conventional supermarkets often will contract the health and beauty care part of their stores to make room for more food, he noted. "That certainly is not the intention of Wild Oats."

Wild Oats opened its first prototype with a new format Holistic Health department in May 2004, and now has eight, said a spokeswoman. The 27,000-square-foot Scottsdale store is the most recent; it opened last month. Another 20 are planned in the next three years, she said. The company has more than 100 stores.

While comparable-store numbers are not available yet for the stores with the new Holistic Health sections, Davis said they have been very successful. "We are very, very happy with the prototype. Holistic Health is a core competency of Wild Oats," Davis said.

The focal point, drawing card and symbol for the new departments is a display piece Wild Oats refers to as the "beacon." Situated toward the front of the department, the circular shelving unit includes products, signs and a television monitor. A large banner portraying Holistic Health is above, a rounded counter with featured products is in front, and the wood flooring in alternating light and dark shades emanates from the fixture to the rest of the department. Information material, including a HealthNotes computer, is all around. When department staff are not busy elsewhere in the section, they can usually be found in the vicinity of the beacon.

"Our Holistic Health department revolves around the beacon," Davis said. In Wild Oats' older units, the health products were located in the center of the store, but the need for more space for food products forced the chain to rethink this approach. With the department in the corner, the beacon, with its DVD playing, helps attract people, he said.

The location in the corner also facilitates consultations, while the beacon serves as a center for the section's educational and informational efforts. "That's where a consumer can use our HealthNotes system to understand problems or concerns they may have with their health," Davis said. Free literature is nearby, as is the department's selections of DVDs, books and CDs.

"It's also where our Holistic Health managers usually congregate when they are not putting products on the shelf, so they are available to answer any questions about our products," he said. Training and education of employees and managers is a constant priority, and in some stores, like Scottsdale, different staff members will have their own specialties, he said.

Also near the beacon is another addition to the department: a table dedicated for use by customers to test or sample new products, such as hand creams, Davis said.

When conventional supermarket shoppers first come to a store like Wild Oats, they might find it hard to understand products because they are not usually advertised. "Therefore, education is absolutely necessary for us to get those customers to come back to our stores," he said.

While shoppers may understand other natural products -- "produce is produce," Davis commented -- "we find the greatest need for education in the Holistic Health arena." Seminars help teach consumers about body care, skin care, vitamins and nutrition, digestive health, and anti-aging products. If a store does not have a community room like the Scottsdale store does, seminars will be held in the sit-down eating area, Davis said.

Companywide training is offered managers, and there is a four-hour training class for Wild Oats' new emphasis on private-label products. "It is our intention to grow that 25% each year in Holistic Health," Davis said.

It was reported this month that Wild Oats is now selling its private-label products in stores other than its own, and will soon begin a test of store-within-a-store sections selling these products in supermarkets of Ahold USA's Stop & Shop Supermarket, Quincy, Mass.

A further refinement of the department's layout is planned, with more space devoted to body care products, he noted. "There's been a renewed interest in natural body care products over the years. People are concerned about their safety, and Wild Oats scrutinizes the ingredients of products. Our products have no artificial colors or fragrances. They are not 100% clean [of additives], but they are the cleanest body care products that are available in the United States today," Davis said.

Some of the Holistic Health sections' most unique products are in the mercantile category. While this includes books, DVDs and exercise equipment, the departments also carry socks made of organic materials, Crocs biodegradable plastic shoes and bamboo cutting boards, Davis noted. Some of these products are cross merchandised in other parts of the store, as appropriate, he said.

Merchandising by Function

BOULDER, Colo. -- A major merchandising change in Wild Oats Markets' new Holistic Health departments is the integration of products into areas displaying like products. For example, instead of a Burt's Bees section, the upscale products are dispersed throughout the department based on function, said Steve Davis, vice president of Holistic Health.

"Years ago, we set our departments up based on the manufacturers because we thought that was an easy way for the consumer to find things. We changed that when we put together these new Holistic Health departments," he said.

"People need to shop for products based on structure and function, so we have changed our merchandising to reflect this. If you are looking for a digestive product, you are going to find all the digestive products together. This is the way that conventional products are merchandised in conventional supermarkets, and we think it is the right way to go," Davis said.

The results have been so impressive that the chain is implementing the concept in all its other stores, he said. "We went from the brand sets to structure/function and increased our business by double digits. So we feel like we are on to something here."