WAL-MART TO COMBINE SKIN CARE, COSMETICS

MICHAEL SLEZAK

BENTONVILLE, Ark. -- Wal-Mart Stores here plans to combine its cosmetics, fragrances and skin care departments into a "beauty boutique" concept at 500 of its stores.

The mass merchandiser began testing the mix Aug. 15 at its North Richland Hills, Texas, store, and has been generally pleased with the results, according to trade observers. Working under a plan called "Project Horizon," Wal-Mart teamed with Chesebrough-Pond's, Greenwich, Conn., to create the new type of department.

As a result of the pilot program's success, Wal-Mart is in the process of implementing Project Horizon at its supercenter near Bentonville, according to one local observer, and "plans to expand [the concept] into 500 other stores," said Bill Jodzio, merchandising manager at Chesebrough-Pond's.

Wal-Mart tested a similar beauty boutique concept at two of its units near Orlando, Fla., early in 1994, but that test focused more on branded cosmetics and less on skin care than its current test, according to Jodzio. The status of that project, in which Wal-Mart paired with Procter & Gamble, Cincinnati, could not be updated last week.

"Chesebrough was the category manager for skin care in the pilot test store," said Jodzio. "We set up the section for them, and we're setting up the entire category, but not just Chesebrough products. We want the whole category to look good. If the category grows and P&G and L'Oreal sell more, we hope we will sell more of our product as well."

Wal-Mart executives declined to comment.

A local observer said, "The [biggest advantage] to combining skin care with cosmetics and fragrance is that there are a lot of cosmetics lines that have facial care, and they merchandise them within their cosmetics. So it's a

natural tie-in to think of cosmetics and facial care all in one."

Another source familiar with Wal-Mart added that the mass merchant's philosophy is "no longer tonnage-driven, but stockkeeping unit-driven. They want to simplify the purchase decision for the consumer, represent the brand name strongly and segment the section both by brand and by product type: body and bath, acne, facial, etc."

According to Jodzio and the other sources familiar with Wal-Mart, the new beauty section features an arch on its back wall with a sign reading "Beauty Boutique."

A U-shaped fragrance counter, about 15 feet by 9 feet, adds to the upscale, department-store look of the section.

"The look brings class to the mass [market]," said Jodzio, who added that the space for fragrances is "about triple what Wal-Mart originally had" devoted to fragrances at the location.

Across from the fragrance counter are three gondolas of skin care products, about 16 feet each, identified by "attention-getting" signs and graphics.

"The skin care section represents the full Wal-Mart assortment," said the local observer. "But it has taken skin care from being several aisles away from cosmetics and fragrances to incorporating it all into one area.

"The signage directs customers to acne, face care, hand and body lotion," continued the source. "The endcaps were made without using any backboards or headers."

"The section features product information, including brochures, how-to's and of course, a cosmetician will be available to service the customers full time," explained Jodzio. "It's a new, consumer-friendly shopping environment, because it brings the products together with additional selling materials and product information and designation, so the shopper has a more comfortable feeling when she's at this destination.

"It's more of the one-stop shopping Wal-Mart philosophizes," Jodzio continued. "Why let a woman go home and turn on the TV and see Cher and buy $35 worth of stuff for her face that she just saw at Wal-Mart for less?"

Merging the skin care, cosmetics and fragrance sections into one was a natural for Wal-Mart, said Jodzio and the industry observers. Other mass market retailers have been plotting similar moves, too.

"A lot of other retail companies are trying to do this. Maybe not on the scale Wal-Mart is, because they're No. 1, so they can afford to do this, because they see results immediately," Jodzio said. "But eventually you'll see more of this in other mass chains, too."

The only obstacle in setting up Project Horizon at the North Richland Hills store was doing the work after hours.

"It took four nights, but we couldn't impact on the store hours, and we had to have it cleaned up by store opening at 7 a.m. the next morning," said Jodzio. "This, of course, required a lot of hours and a lot of lost sleep. But it worked well. It was a good team effort."

Jodzio credited Mike Dougherty, director of trade marketing at Chesebrough-Pond's, for helping to mastermind Project Horizon.