For many consumers, there is a tendency to look for little indulgences; luxuries, if you will, that provide some sense of comfort in an economic environment that includes higher energy prices, rising personal debt and declining home values.
They seek ways to trade up and reward themselves without breaking the bank on some high-ticket purchase. It could be something as simple as sitting down to enjoy a $4 coffee beverage while relaxing in a Starbucks listening to the new Paul McCartney CD. It may also be a short 15-minute visit to a local salon for a chair massage.
For retailers, this speaks to the question of balancing product and environment. If consumers are looking to possibly make a trade up in cosmetics or other beauty products, will the ambience of the store environment invite them to make that short leap or will it discourage such action? Will getting consumers to move up, for example, from conventional cosmetics to mineral-based formulations be more likely to take place in a self-serve environment or would knowledgeable associates on-hand deliver the sales conversions stores are looking for?
A number of retailers are looking at a variety of means to upgrade the "beauty profile" of stores and, in the process, encourage shoppers to turn to them as a source for those little rewards that make the tough days a bit more bearable.
On the department store front, J.C. Penney added Sephora cosmetics departments to bring some of the upscale glow from that beauty brand to its stores catering to the middle of the market.
CVS, Walgreens and Target have brought in brands such as Lumene from Finland, IsaDora from Sweden, and Boots from the U.K. to create standalone sections and project an aura of exclusivity that had previously been the purview of department stores. A number of Target and CVS stores boast specially trained Boots beauty advisors to assist consumers in making the right purchasing decisions.
Over in the U.K., the Tesco supermarket chain is in the process of testing a new approach to selling cosmetics that seeks to bring the ambience of a specialty beauty boutique or department store into its Tesco Home plus store format.
Working in cooperation with L'Oreal and a London-based firm, Beyond Communications, Tesco has created a 1,000-square foot area with counters similar to those found in department stores. Interestingly, the department is being placed at the front of the stores to make a visual impact on consumers almost as soon as they enter.
Nigel Stern, managing director of Beyond Communications, told Talking Retail, "We have created a customer experience not usually associated with the grocery sector. It's about making the customer feel inspired and looked after."
As of now, the new concept is being tested at a store in Liverpool and no announcement has been made as to whether the new merchandising approach will be rolled out as-is or in some modified form to other stores. The test becomes all the more interesting based on Tesco's planned entry into the U.S. market. While it is widely known the company intends to focus its initial efforts on creating a niche with prepared and fresh foods, it is widely assumed that Tesco will inevitably seek to replicate its non-foods success in other markets here in America.
Discussion Questions: Is there value to upgrading beauty departments in grocery, drug and mass with more upscale counters, improved lighting and added sales staff or are stores making a mistake because premium and even higher quality beauty product purchases are going to be made elsewhere regardless? Do you see Tesco following its food-focused entry into the U.S. with a soon-to-follow push into HBC and other non-foods?