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When it comes to the men's grooming category, supermarkets are losing their edge. Even though grocers are selling more shaving products than drug stores, their share of the business is slipping, while the druggists' share is growing.
Supermarket operators' total category sales were approximately $758 million last year, compared with drug store operators' $646 million, according to ACNielsen Strategic Planner data for the 52 weeks ending Feb. 24, 2007. However, that represented a 0.9 percent drop in sales for food retailers, against a 4.5 percent increase over last year for the drug channel.
What's worse, the supermarket channel saw sales drop in every shaving category save disposable razors, and even that category grew only 1 percent, compared with drug's 3.2 percent gain.
Grocers need to find new ways to stanch the bleeding, and better compete against the drug chain threat. Here, Progressive Grocer presents a brainstorming session designed to help grocers regain their edge. The Procter & Gamble-sponsored session, led by supermarket nonfoods consultant Glenn Snyder, included savvy retail players in the HBC industry.
The issues on the table ranged from cross-merchandising razors with beer to unique checkout displays that boost sales while minimizing shrink.
The session's participants were:
--Terry Cerwick, HBC category manager, Bi-Lo, Mauldin, S.C.
--Al Jones, s.v.p., Imperial Distributors, Auburn, Mass.
-- Anthea Jones, v.p., nonfoods and pharmacy, Bi-Lo, Mauldin, S.C.
--Bill Mansfield, v.p., GM/HBC, Pueblo International, Carolina, P.R.
--Sue Vodika, category manager, HBC, Bashas', Chandler, Ariz.
--DeeJay Smith, senior account executive, beauty care, Procter & Gamble, Cincinnati.
Progressive Grocer: The supermarket industry has fallen behind other retail channels in attracting the male shopper, particularly when it comes to shaving products. How do you think supermarket operators can win back some of that lost share?
Bill Mansfield: We probably need to put shaving products next to the beer.
Sue Vodika: That's where we put Axe when it broke, and we could hardly keep it in stock. Many male shoppers just buy snacks, beer, and liquor. My family is an example: I buy the blades for the men in my family.
Smith: Do you buy their handles for them, too, or just blades?
Vodika: I do it all.
Smith: I asked because usually a man would like to buy his own system. But there are differences. Incidentally, when Fusion launched, retailers that displayed them next to the beer racks did very well.
PG: At what locations in the store do mobile shaving merchandisers drive the best sales? I usually see them in the HBC aisle, along with other HBC floor stands, in areas where the store traffic is not exactly top-drawer.
Mansfield: In Puerto Rico we have something that the [continental] U.S. doesn't have, in that we still have a lot of event marketing campaigns by Gillette. In fact, it's almost an annual calendar. We do the Gillette World Series, for example. It's to the point -- and I hate to say it -- that Gillette, literally, almost has a permanent low-profile front end in the HBC department. And it rotates, depending on the promotion and the product.
Al Jones: I've found that off-shelf special displays are traditionally in a wing panel or displayed in HBC and as close to shaving as you can get it. That sells product. I'd love to have it out at the front end, but that's not realistic in most supermarkets.
PG: Can't get the beer aisle, huh?
Al Jones: Nope.
Anthea Jones: We try to tie ours in with an end cap, and do some cross-promotions. If we have women's items, such as hair care, hair color, beauty products, and skin items, we'll tie the razors in with that, and then we also use a different placement near the feminine hygiene section as well. As far as the men's grooming items, those are located either in the hair color section or the men's grooming needs.
PG: How about shippers for shaving products? Would you put them next to the beer?
Terry Cerwick: We might. We try to get [shaving products] outside the HBC aisle. Otherwise you're only going to attract customers if they happen to be going down HBC.
PG: Do the dry grocery people oppose nonfood shippers in "their" aisles?
Al Jones: They don't necessarily oppose it, but they don't promote it, either. They have their own priorities.
PG: I've heard of some stores where aisle display space has been traded between departments.
Anthea Jones: We've never done that. But one thing we do is, we try to make sure that we communicate the sales and the profitability of the item, let them know what the sell-through rate is and what it means to their bottom line. We publish a weekly store publication, and when it pertains to shippers, we let the stores know, "Okay, shipper X is coming in on this date; this is the prospective sales, profitability, and date at which we expect it to be sold through." And we give recommendations on placement throughout the store as well.
Vodika: The beer tie-in has also worked for us. When Fusion broke, we displayed six strips of product in the beer section just for the Sugar Bowl weekend. And it sold great. We communicated to our stores about the strips in the beer section, and we found that 40 percent of them followed the plan. That 40 percent is pretty consistent. And we're pleased to get that.
Cerwick: Since beer and razors are both top men's items, why isn't cross-promotion a regular thing? Why doesn't Procter work up some kind of cross-promotion with, say, Budweiser? [To P&G's Smith]: You both work with NASCAR, don't you?
Smith: The data on the beer tie-in is not qualified; it's still coming through.
Fixturing for security and sales
PG: What about security? We talked about that earlier. Where do you hide your blades?
Vodika: Where do you hide them? You hit the nail right on the head!
Mansfield: Puerto Rico has its fair share of theft, both internal and external. About two years ago there was always this running battle between operations and merchandising. Several stores had bad shrink. Operations pointed to blades, batteries, and film. We don't have a problem with film any more -- nobody steals film any more, because nobody uses it!
PG: That's one problem solved.
Mansfield: About six or eight months ago, Gillette came up with a device at checkout that could either be locked or not locked. The frame was completely clear, so it was very easy to see if the product was in stock, and it was very easy for the customer to buy from. The fixture was inexpensive and very easy to replace.
PG: What happened -- did it work out?
Mansfield: We installed one at every checkout. In the stores with high shrink, the fixture remains locked, but it can be opened from the rear. Each checker has a little key that remains in the lock. So the unlocked fixture is available for self-service, but still acts to deter theft. The stores that do not have high shrink in the category are allowed to leave them open.
Not everyone uses the fixture correctly, though. In some Wal-Marts I've visited, for example, the same fixture does a great job of hiding the product.
PG: How can that be, that Wal-Mart can't make it work right?
Mansfield: They put a graphic on it. It's very nice, but it blocks the view, doesn't really show the product. Unless you kind of stick your finger in there, you can't really tell if it's in stock or not. Our fixture, without dressing it up with fancy graphs, is perhaps less attractive, but it's very functional.
PG: Do you sell both the blades and the razors from the fixture?
Mansfield: Just the system blades. The razors go in-line.
Vodika: How big is this fixture? I've never seen it, and I've seen a lot of fixtures in my time.
Mansfield: I'm going to guess it to be about 18 inches wide and 20 or 22 inches tall. The items inside are three or four across, and four or five down. It accommodates the Mach 3 -- M3 -- Fusion power and manual. Schick items are all in-line. The fixture's been a great lift to the category. Before, we had to struggle with where and how to install it -- every store had its own opinion on execution. Today our operations executives are happy. And that means we can get back to merchandising.
Vodika: We've never been offered a rack like that. How come, I wonder?
Smith: Must be custom-built.
Mansfield: No, I don't think it is. A lot of what we get comes from the South American or Mexican market.
Vodika: So did you do it as a company, or did Gillette do it for you?
Mansfield: We told Gillette that because our theft [shrink] was so great, we could discontinue the product and not lose a tremendous amount in actual sales. They were surprised it was that serious. I don't know if they created the displays for us, or if they were using them already somewhere else.
Cerwick: Are they freestanding?
Mansfield: Sort of. We put it right where the electric pole is at the register; that's where all the cables flow down. We put it right up front so that when customers are standing there with their carts, waiting to check out, the blades are staring them right in the face. Before, we used pegs by the checkout. It was pay by the peg; we charged suppliers for that space. And that's where the items were stolen. Now the fixture can be secured if the checkstand is not being used; it's unlocked at registers that are attended, and it has great visibility. This is particularly important because it helps combat our greatest fear, which is being out of stock.
Vodika: What I don't understand is, when a manufacturer has a selling tool that's inexpensive and protects their high-retail items, why isn't it passed around to other retailers? I know I haven't seen it or even heard of it.
Cerwick: Same with me.
Vodika: I have to fight for what I do have.
Cerwick: As a matter of fact, the only fixtures I've seen are those $2,000 jobs that are too expensive and not really functional.
PG: Al, are some of your stores displaying cartridges up front?
Al Jones: It depends on the store, and it depends on the customer. We have a lot of stores where the blades are only at the front end because of theft. Once you get in-aisle placement, there are a variety of ways to go.
Getting the cartridges up front helps, but doesn't solve the problem of theft. In those stores it's really up to the manager to educate the store help, to create a general increase in awareness. When the cartridges go behind the counter, you don't sell product.
Mansfield: Has anyone here been bold enough to take women's shaving products and move them to feminine hygiene? It's pretty well known that women buy their own stuff.
Smith: That's what we're checking in our shopper research facility. It's an example of new thinking that can not only increase sales, but also make shopping easier and more convenient. We're also researching the men's shaving section, working with the items that are there. Determining which items are uniquely female-oriented, and which are uniquely male, is just part of the equation. You also have to know how he or she shops, if she's going to buy his cartridges for him or if he buys his blades himself, how all of that plays out.
PG: I've seen quite a few stores that are doing it now, putting women's razors in the feminine hygiene section.
Al Jones: All the items in a full section, or some of them [placed] as cross-merchandising?
PG: I've seen the total grouping of women's shavers there, including shave cream.
Vodika: We block them. I mean, I definitely have a women's shaving section in feminine hygiene, but without the razors; we group all razors together, for men and women.
Smith: The shopper has been trained to shop that way. She goes to a certain place to buy for him. The key, though, is getting the shopper to put that one more item in her basket; how can you get her to buy as much as she can while she's in the store?
Mansfield: And maybe slide in some new ladies' skin care item—like a fancy anti-aging cream to boost the impulse sale.
Smith: A lot of testing is going on right now about that.
PG: Impulse sales are very important, but there may be another factor to consider: if some or most women's shaving needs found a new home in feminine hygiene, it could help free up some shelf space for men's shaving.
Mansfield: And don't forget to include beer in your research.
Smith: And snacks.
PG: What can manufacturers do to improve their advertising or packaging?
Vodika: I think Mach 3 has the best packaging, and Fusion's nice, too. It really stands out and it's different from anything else on the shelf. Mach 3 sales are still there.
Mansfield: I realize that everybody's beard is different. But I think that, particularly in Puerto Rico, where we're in real economic difficulties, some kind of value statement could be printed on the package -- that the blade lasts X days longer, or provides an extra shave.
Al Jones: Which would be contrary to what they would like consumers to do; they would like them to use the blades faster.
Mansfield: But in a difficult economy -- and I know everybody here has at least one store in that situation -- any type of value statement might help.
Al Jones: I'd like to pay a compliment: I think that a hell of a good job was done with the POP material that was available when Fusion came out. I don't know how widely available they were, but they were very attractive and really added excitement to the displays.
Smith: That's one of the things I think should be emphasized. You people on the firing line need to communicate with your account reps. Fusion was all run through Gillette's legacy systems. P&G was the parent company at the time, but Gillette was running the brand. We need to make sure that when the next innovation comes out, it's going to run as well as Fusion and Mach 3.
Vodika: Well, you also need to do something about those bright displays for the holidays. You know, those stocking stuffers with the little cologne bags. We've put them on our most prominent power panels, but I can't sell them! Instead, I suggest putting out a bright Fusion-only package for promotional areas, because all they really want is the razor. The price of the stocking stuffers was too high, even if they were a gift. I agree with Bill that value must count for something.
My husband was furious, because of course, I brought one home, and then he went to buy them, but refused because of the price. I tried to fight him on it. I said. "Okay, there's four of them. One lasts you 10 days, so that's about six weeks." Didn't work. He said, "OK, you go buy it." And he threw in for good measure the comment that his beer doesn't cost that much.
Cerwick: I agree that packaging should give shoppers a reason why should they pay more. Because if the woman is buying it, especially the cartridges, well, it's just one more thing to make a man jump. There's an opportunity to have a better value story indicated on the package.
Smith: There's another aspect to the Fusion; it works very well for most African-Americans. Their skin is different, and the majority of them have little bumps caused by curved hair shafts. A higher-quality blade works best for them, and once they get that message, they will trade up. It's probably a marketing job for both the manufacturer and retailer to work on. Actually, I think we are doing a good job, but there is opportunity for retailers to follow through.
Mansfield: Has there been any data relative to sales, power vs. the manual? Is it 50/50, 60/40?
Smith: It's subject to change, but right now, it's 55/45 in favor of manual.
Cerwick: I'm glad to see tamper-resistant packaging. That helps, because we do have some people who will take them out of the box and try to stick them in their purse and walk away with them.
Anthea Jones: DeeJay, you made a good point when you said that many African-American males have sensitive skin. I think that from a packaging and marketing perspective, that's something that Gillette could really work on. You know that many of the grooming products in the African-American community are purchased from barber and beauty supply places. If you were to get advertising and marketing into some of those key places, you would see the sales go through the roof.
Vodika: Right. And don't overlook the shave cream brands preferred by African-Americans. I've had quite a few African-Americans call to complain about this.
Smith: And that's part of the problem. Gels work very well, despite a lot of misconceptions out there. But your point is well taken that we've got to do a far better job in targeting our marketing and getting the message out to the African-American community about the benefits of our razors, and that they don't need to use shave cream.
Shaving actually helps the condition, despite the misconception out there that if you shave too much, it will get worse. Anthea's point is right on, that there's probably an opportunity here for us to do marketing and also to join with retailers, especially those that operate stores in African-American locations.
Anthea Jones: Well, I asked that same question when Gillette was launching Fusion, and I can't remember who the person was that came and met with us, but they said, "Yes, this will be a great razor for the African-American male." And I said, "Well, that's to be seen." I said I'd like to see some data on that, what the penetration is in the African-American market. Resoundingly, you guys said, "Yes, our new razor's going to burn the road up." But I haven't seen any research to support that statement.
Starting to gel
PG: What about shaving cream and gels? We haven't started talking about that yet. The category has many new items with special properties and all kinds of flavors.
Al Jones: It's become a commodity business, the cream part.
PG: Well, the action is in the gels, no question about that. There are some fancy ones out there. I bought something new the other day -- in CVS, pardon me. Anyway, the item has a little tingle to it, and the manufacturer claims that it coats the blades for a smoother shave. I think it's an English import.
Cerwick: It's an import from Europe. They have a gel, and also have a type of shave oil.
PG: I'll bet 100 bucks your supermarkets don't stock it.
Cerwick: No bet, but that doesn't mean we won't some day. By the way, I think people are using less shave gel than they used to, because the razors are better, and they don't need to use as much.
Vodika: Shave gels are much improved. Many contain more oil and lanolin. When you're done shaving, it feels better.
PG: How's aftershave doing?
Al Jones: We see much more skin conditioning-type of things, like Nivea for men. It's a lotion, and that's where we see the market headed.
Mansfield: Old Spice, Aqua Velva -- those products are hanging in there, and are helped by new packaging and advertising.
Now here's a question: What's the story on shaving the top of the head?
Cerwick: I shave my head, but I don't know how widespread it is. I do know there is a shave cream or gel for it. Don't know how it it's selling.
Smith: [To Mansfield] There is a tremendous trend now, with more and more men doing it; and, again, this trend is part of our research program.