To be or not to be a fragrance ‘destination’ store - Column

Saturday, February 2nd, 2008

The key to making fragrances a destination shop for consumers is space and service.

But while many drug chains do give fragrances a large allocation of space in their stores, declining sales make it very hard for many chains to allocate hours to fragrances, and to cosmetics as well.

If I were a store manager or a district manager, before I’d invest the hours, I’d want some proof that the service idea works, that there is a payoff-that if I as a manager, put more dollars into service hours, I will get stronger sales as a result.

But to get perfect proof, one would probably have to do a series of controlled store tests, measuring what happens to sales in otherwise identical stores if half the stores have service and the other half do not. In lieu of that, it might help to look at some of the chains that are reporting stronger growth in fragrances and see what they have in common.

In addition to high in-stock service levels, attractive stores and smart merchandising, the stores with the best performance record in fragrances are inevitably chains with “committed” cosmeticians, meaning the are more then just token bodies in the department.

In Eagleville, Pa., Susan Swartz, senior buyer for I Got It At Gary’s, said cosmeticians help customers develop a feeling of loyalty to Gary’s stores.

They also generate incremental sales through suggestive selling. They keep the department clean and in stock, and they help take the anxiety out of shopping for fragrances, which can be a big-ticket item. “Suppose a customer comes into the store and said she wants to find something new to try,” she said. “The first question a good cosmetician will ask is, ‘What are you using now?’ That’s basically just a way of finding out what type of fragrance the customer likes.

“If she said she’s currently using a floral scent like Air du Temps, then the cosmetician knows not to show her a spicy scent like Obsession. She can show her something like a Vanilla Fields.”

At Detroit-based Arbor Drug, fragrances are merchandised in what spokesperson Fred Marx calls a “secure area,” meaning that the more expensive brands are locked up while the promotional and value brands are in open locations.

But Marx said the locked cases aren’t a problem for Arbor because they have full-service cosmeticians in all its stores, and one of their priorities is to always be in the department to assist customers.

“You don’t have to ring a buzzer in our stores to get service,” he said.

Marx said Arbor can afford to allocate extra hours to cosmetics because “our stores are so productive.” The average Arbor store does over $4 million a year in sales, and the chain generates one of the highest sales-per-square-foot averages in the industry, over $400 per square foot per store.

Gary’s Swartz said that there is “a direct link between having cosmetics salespeople in your stores and being a destination department. But cosmeticians cost money, and only upper management can tell operations that this is how they want their money to be invested.

“We’ve been successful at Gary’s with a cosmetician program because the people who set our policy directions agree that cosmetics and fragrances should be a destination shop. But even here, and we’re a small chain, we have our battles about how much to invest in the department. These are ongoing battles even for small chains.”

Swartz said that the only way top management can make its final decisions on strategies for cosmetics and fragrances is to stay educated” about the category. “They need to see proof that there are financial advantages, as well as strategic advantages, in making the department a destination shop, and when the program works right, that proof is there.”

That’s logical and it sounds fair, but the trick is to do it in a committed way. A chain cannot try to slip by with token service and earn itself the distinction of being a destination shop.

Customers won’t be fooled and the “test” will fail.





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