Checking out the HBC market basket

Retailers can learn a tre­men­dous amount about pricing, promotion and marketing of the health and beauty care category by taking a shopping expedition, focusing on several types of stores in their market and comparing a handful of similar products. The information gleaned about how other stores price, market and promote health and beauty products can help ensure customers remain happy with prices and the overall shopping experience in their own retail outlets.

We looked at several stores in Los Gatos, Calif.—a town of almost 29,000 residents with an estimated median household income of $107,039 and an estimated per capita income of $67,113 in 2007—to compare prices, promotions and marketing tactics. In this area, consumers have several grocery stores within a 14-mile radius as well as a variety of mass merchandisers within a 25-mile radius.

SAFEWAY
The recently renovated 49,395-square-foot Safeway on Union Avenue on the south side of Los Gatos also attracts residents from San Jose.

The health and beauty aisle is located between the frozen food and the party, print, paper/pet care aisles. Closest to the registers, two endcaps feature batteries and ice cream. At the far end, which faces the store’s pharmacy, the endcaps offer shoppers shoe care products and laundry detergents, household cleaners and more frozen goods. Traveling from the front of the store toward the pharmacy in the back, consumers find an 86-foot aisle filled with a wide variety of health and beauty products. Both sides of the aisle are lined with HBC items, including energy products and vitamins.

Bath puffs, oval loofa pads, face mitts, organic cotton rounds, nail files, back scratchers, sponges, travel kits, thermometers, hand-sanitizing spray, pedometers, contact lens cases and latex gloves were some of the item on hanging displays. There were also shelf talkers.

There are two locations where shoppers also can pick up a special “Family Essential” coupon book featuring three-month-long specials on 11 products in this category. The store’s circular only advertised one health and beauty product: Safeway hand sanitizer, which had been marked down from its original price of $3.49 to $1.99; with a Club Card it cost just $1.75.

Safeway featured an impressive pharmacy with another wall of products—mostly for cold, flu and fever. The pharmacy had several freestanding displays: one for eyeglasses, one for cold and flu products and one for hair products, such as brushes.

NOB HILL FOODS
Closer to the center of town, Los Gatos residents can shop at Nob Hill Foods on Los Gatos Boulevard, a smaller and older store with 30,000 square feet of space. While most Nob Hill stores feature a pharmacy, this location does not.

The store’s weekly circular enticed customers into the health and beauty aisle with ads for 12 different products, six of which were oral care items. The other six were placed under the heading of “cough and cold sale.”
The HBC aisle at this Nob Hill Foods is about 72 feet long and sits between the aisle for hardware/soap/bleach and wax/pol­ish/house­wares and frozen food. Two endcaps facing the registers offered ice, water and DVDs. At the far end of the aisle, the endcaps featured cooking utensils, Kleenex brand tissue and toilet paper.

The aisle had many shelf talkers promoting in-store specials and private label brands but fewer hanging displays than Safeway. Those that could be found were similar in nature to Safeway’s—body scrubs, organic essentials cotton swabs, sea foam sponges, thermometers, foot brushes with pumice, nail files, toothpaste tube presses, travel items, hair turbans, nail care kits and shower caps.

Not only is the health and beauty aisle shorter at Nob Hill than at Safeway, the store offered less variety in terms of HBC products, although it, too, had energy products and vitamins.

Body scrubs and hand soaps were nestled among the household cleaners on the next aisle, making them hard to find.

TARGET
The Target on Hillsdale Avenue in San Jose features a full grocery section with frozen and refrigerated foods as well as dry goods. The health and beauty department is situated just to the right of the registers.

Although this department did not feature stand-alone floor displays, it had an abundance of endcaps. The health and beauty department includes 14 29-foot aisles plus the wall in front of the pharmacy These included: a range of sun block products; personal care gift sets, Remington products; Cover Girl and Revlon mascara, Jemma Kidd cosmetics; Burt’s Bees products; Neutrogena items; foot care products; vitamins; Tampax products; hand sanitizers and disinfectant wipes; Q-Tips and cotton; Clairol Natural Instincts Hair Color; eye glasses; hand lotion; toothpaste; and Softsoap products.

Target’s circular offered “specials” on 24 items, ranging from cold, flu and allergy products to antibiotic ointment. The store also had the lowest prices on oral care items, even compared to Wal-Mart, the next store visited.

WAL-MART
Shopping at Wal-Mart requires a 15-mile drive to Story Road in San Jose. There Los Gatos residents give up the niceties and go simply for bargains.

The health and beauty department is to the left of the registers and between the cigarettes and tobacco aisle and the pet products. No shelf talkers or hanging displays enticed consumers down the four approximately 26-foot and six approximately 40-foot aisles. The long back wall near the pharmacy also contained HBC products.
A variety of free-standing, three- or four-sided displays were found on the floor for price-based promotions. For example, one display featured styling gel by LaBella (40 oz.) for $2.97; Crest Pro-Health and Oral B CrossAction Toothbrushes for $3.25; Crest Whitestrips Advanced Seal (14-day) for $34.97; and Gillette Fusion Razors for $7.94. Another offered Herbal Essences products for $4.67; Pert Plus products for $4.34; and Dial (2-pack) and Zest (8-bars) soap products for $5.

Endcaps offered price-based promotions as well. Some of these include: TRESemmé products for $4.26; Vicks Warm Steam Vaporizer for $15; rubbing alcohol (32 fl.oz.) for $1.88; Schick Extreme Comfort Plus Flexible Razors (8 pack) for $10.37; Axe gift packs for $8.00, Garnier hair products for $4.96; Pantene products for $5.47; L’Oréal Excellence Crème hair color products for $6.92; and Gillette Total Performance and Olay Limited Edition gift sets.

Price-wise, in this area Wal-Mart was lower than Nob Hill, Safeway and Target for HBC items. Comparing 26 similar products, Wal-Mart had the lowest price on 17 of 26 items, even though in some cases these items had to be purchased in larger quantities or sizes. Target had the lowest prices on seven of the 26 items.

Safeway and Nob Hill claimed the lowest price on just one item each. However, at Safeway a shopper would have to use a Club Card to obtain that price. 

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