store profile Shopping for Cosmetics by benbenzhou


store profile Shopping for Cosmetics

More Info
									                                                                                         Where others have
                                                                                         failed, Cosmetics
                                                                                         Plus has managed
                                                                                         to tame the illusive
                                                                                         fragrance market.
                                                                                         by Mike Nave
     Store Profile:

                                        of New Jersey
                                                             ormally, beauty stores either don’t sell fragrances or stock them
                                                           in limited quantities. The fact that Cosmetics Plus of New Jersey
                                                          places a large emphasis on selling fragrances makes this salon
                                                         store chain unique. Beauty Store Business spoke with owner Don-
                                            ald Gottheimer to find out more about his successful operation. Gottheimer,
                                            who remains the sole owner and president of Cosmetics Plus, opened the first
                                            location in Kearny, New Jersey, in 1969. Over the years, he developed a vari-
                                            ety of different formats for his stores, but in each case there was always a ded-
                                            icated focus on cosmetics, fragrances and other beauty products and services.
                                               Cosmetics Plus has grown to an eight-unit chain of full-service beauty super-
                                            stores with four stores in New Jersey, one on Long Island in New York and three
                                            in the metropolitan Washington, D.C. market. Locations range in size from
                                            3,700 to 7,200 square feet, and a new prototype store measures approximately
                                            5,000 square feet. Each store is dedicated to servicing its primary customers:
                                            fashion-conscious suburban working women from upper-middle and higher
                                            income families. The company anticipates opening several new stores in the
                                            next two years in the metropolitan New York, New Jersey and Washington, D.C.
                                            markets, and has made it a priority to expand into more high-end department
                                            store cosmetic lines. (Cosmetics Plus Stores of New Jersey are not to be con-
                                            fused with the now defunct Cosmetics Plus of New York stores once found in
                                            the New York City, Florida and California markets.)

Beauty Store Business   February 2004
Cosmetics Plus stores traditionally do about a third of their business in cosmetics,
fragrances and salon haircare products.

BSB: What makes your salon store                 BSB: What are some of the more
chain unique?                                    important product categories and
DG: Product selection. Cosmetics Plus            lines in your stores?
offers popular-priced and designer fra-          DG: Cosmetics Plus stores traditionally
grances, both drugstore and depart-              do about a third of their business in cos-
ment store brands of cosmetics, and a            metics, fragrances and salon haircare
complete selection of salon haircare             products. Appliances, nail care and hair
products supported by the services of            care are our fastest growing product
salons in our stores.                            categories. Tigi, Paul Mitchell, Sebastian
   The products are merchandised in a            and ARTec are the top-selling brands in
consumer-friendly, comfortable shop-             hair care, and OPI and Essie are the top
ping environment with attractive fix-            nailcare lines. Lancôme, Tony & Tina,
tures, flattering lighting and trained           L’Oréal and Revlon are our big-hitter
salespeople who have earned their cus-           cosmetic lines.
tomers’ confidence.
                                                 BSB: Why are your stores so success-
BSB: Who is your major competition?              ful with fragrances?
DG: We’re competing with chain drug-             DG: We have become category killers in
stores and department stores, as well            each market we’ve entered by providing
as retail beauty supply stores, includ-          a broad selection of the most desired
ing the Sephora and Ulta chains.                 fragrances in the marketplace. Our
                                                 stores currently offer in excess of 1,000
                                                 fragrance items, including bath prod-
                                                 ucts and significant value gift sets 12
                                                 months a year. The consumer has
                                                 responded by keeping our stores in the
                                                 forefront of their minds when thinking
                                                 of the fragrance category.

                                                 BSB: How do you justify the short
                                                 margins on fragrances?
                                                 DG: Cosmetics Plus enjoys competitive
                                                 margins on fragrances, in part, because of
                                                 the variety of products we offer. Promo-
                                                 tional opportunities offering higher mar-
                                                 gins off-set low margins on some of the
                                                 most sought-after fragrances, such as
                                                 Chanel and Estée Lauder. Although the
                                                 margins on fragrances are far less than

Beauty Store Business          February 2004
The Cosmetics Plus salon store chain caters to its target audience by providing nearly all
of their essential beauty products and services under one roof.

the margins that are typically earned on       City, ECRM shows and several gift shows.
salon haircare products, the company’s
philosophy is: “We take dollars to the         BSB: How do you train, motivate and
bank, not percentages.”                        keep your store sales staff?
                                               DG: The company has designed a com-
BSB: Who are the key members of                prehensive incentive structure that
your organization?                             motivates key store personnel on a
DG: Jean Herscovici, vice-president of         monthly basis. In addition, there are
retail operations and merchandise;             specific financial incentives on particu-
Steve Bower, controller; Marcia Gaynor,        lar items or lines throughout the year.
cosmetic buyer; David Brown, buyer for         The company offers periodic education
all hair and beauty products; and Chris-       and training from its vendors.
tine Mara, MIS director.
                                               BSB: What trends are making beauty
BSB: What are the specific challenges          stores a more popular place for
Cosmetics Plus of New Jersey faces in          women to shop?
its marketplace?                               DG: Most Cosmetics Plus stores are in
DG: Cosmetics Plus is faced with many          strip shopping centers. The easy access
of the same challenges and opportuni-          these locations offer, compared to
ties that face many other companies            department stores or regional malls,
who are too big to be little and too little    make them much more convenient for
to be big. This results in lack of first       working women who discover they can
consideration for new product distribu-        meet all of their beauty product needs
tion and real estate sites, and getting        with only one stop.
muscled out by the Wal-Marts and Tar-
gets of the world. The company has to          BSB: Do you have a private-label cos-
spread its advertising and distribution        metics brand?
costs over too few doors.                      DG: The company has reached an
                                               exclusive agreement with an Italian-
BSB: What trade shows do you regu-             based color cosmetic line. Cosmetics
larly attend?                                  Plus is marketing this as its “House
DG: Senior product management and our          Brand.” The line consists of approxi-
buyers attend numerous trade shows             mately 120 items and is priced in line
throughout the year. These include the         with MAC cosmetics. It makes a fashion
local and national beauty supply shows:        statement, and is more appealing to
Cosmoprof in Las Vegas as well as              younger women than established
Bologna, EX•TRACTS shows in New York           department store lines.

Beauty Store Business         February 2004
All salon haircare products at Cosmetics Plus locations are displayed self-service, while
manufacturers’ displays are featured in traffic aisles whenever possible.

      The company’s philosophy is: “We take
      dollars to the bank, not percentages.”
BSB: Tell us about your POS system?             BSB: What type of advertising do you use?
DG: The company currently uses a POS            DG: We use both four- and eight-page
system development by Trade Winds,              circulars that are either inserted into a
which primarily provides information on         variety of newspapers or mailed to their
sales and inventory movement. We’re in          customer lists. The company also uses
the process of licensing back-office soft-      ROP advertising in newspapers on a
ware from a third party, which will             monthly basis, as well as distribution of
improve our information regarding cus-          direct mailing postcards to its most
tomer purchases, customer management,           frequent customers.
sales history and inventory replenish-
ment. The computer system will also             BSB: Do you have a Web site?
allow for improved management of our            DG: The company operates a Web site
frequent customer program and other             under the name,
discount programs in the planning stages.       which is used exclusively for fragrance
                                                product sales.
BSB: What type of in-store display and
merchandising strategies do you use?            BSB: How important are ethnic beauty
DG: Several stores provide for open-sell        products to your overall product mix?
display merchandising of all fragrance          DG: The product mix isn’t geared
products; other stores display fragrances       toward the ethnic customer. There are
in showcases and wall cases behind glass.       limited product offerings in the color
Popular-priced cosmetics are merchan-           cosmetic category, and we offer no eth-
dised self-service, and designer cosmetic       nic haircare products at this time. BSB
lines are merchandised in showcases that
                                                Mike Nave is president of Professional
house counter displays and tester units. All    Beauty Distributors and is publisher of “The
salon haircare products are displayed self-     Beauty Industry Report” newsletter.
service, while manufacturers’ displays are
featured in traffic aisles whenever possible.

Beauty Store Business          February 2004

To top