High-end beauty on a budget
A $300 jar of beauty cream is a tough sell these days.
And that’s just fine with CVS and Walgreens. The nation’s largest drugstore chains are making over their beauty departments as the recession cuts into household budgets.
CVS Caremark Corp. is rolling out spa-like beauty boutiques attached to its drugstores, including one in Mission Viejo. More are planned for former Longs Drugs stores in California, which were bought by CVS last year.
And Walgreen Co. is redesigning beauty departments in select locations, most dramatically at its new store in New York’s Times Square.
Their aim isn’t to sell hope in a jar. But CVS and Walgreens are trying to sell cost-conscious shoppers on the notion that drugstores can give them a beauty boost for far less money than their department-store counterparts.
“We’re starting to see people talk about the need to splurge a little,” said Wendy Liebmann, president of WSL Strategic Retail, a consumer behavior research firm in New York. “But they’re not going back into the high-end stores to do this. There is no doubt we will do more shopping, but the places we do it will be quite different for some time.”
Women began to cut back on buying cosmetics when money started getting tight last year, according to WSL. They are spending less by using what they already have, paring their beauty routine to rely on fewer products, or trading down to less-expensive brands, the firm said.
Kathryn McKechnie of Chicago is a case in point.
“I’ve tried to consolidate the products I use on my face,” she said. “I was using a cleanser, toner, this Botox in a bottle, a serum, an anti-hyper-pigmentation, a moisturizer and two eye creams. I’ve cut back to save money and because it’s a pain.”
To reach shoppers who are beauty- and cost-conscious, drugstores and discounters have started to stretch into higher-end products. Drugstore brand Oil of Olay says its $30 Olay Regenerist Micro-Sculpting Cream “whipped the world’s most expensive creams, even the $350 one,” in advertisements, citing a Good Housekeeping test. And now it is selling a $47 anti-aging cream called Olay Pro-X.
“Consumers are smart, and I think they are less concerned about where they shop,” said A.G. Lafley, chairman and chief executive of Procter & Gamble Co., the maker of Oil of Olay, when asked about Pro-X during an earnings call in April.
That’s just what Mike Bloom is counting on. As senior vice president of merchandising at CVS, Bloom is the guy planning to change the face of the drugstore beauty industry.
The Woonsocket, R.I.-based company debuted its Beauty 360 boutique in Washington in November. CVS has since opened two more stores, in Mission Viejo and Ridgefield, Conn.
The 3,000-square-foot Beauty 360 stores are connected to CVS drugstores through a breezeway and have separate street entrances. The stores are designed to imitate department stores’ cosmetic floors and employ trained beauty advisors. They carry prestige brands not available in the drugstores, including Bioelements, Cargo and H2O Plus. And they offer spa services such as facials, nail touch-ups and hand massages.
CVS plans to open 30 stores this year, mostly in California, where it plans to convert space inside the recently acquired Longs Drugs stores. Bloom predicts there could be Beauty 360 stores at 500 to 700 of its roughly 7,000 drugstores.
Walgreens is saying little about its in-store beauty makeover, except that it is testing the concept at 35 stores. The Deerfield, Ill.-based company pulled out all the stops at its three-story Times Square store that opened late last year. The beauty department is bright and spacious and even has a L’Oreal store. Walgreens doesn’t expect to build a replica of the outpost but does expect to put elements in some of its higher-end stores
“We wanted to see what we can do,” Walgreens CEO Gregory Wasson said. “It is an example of where we can go.
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