Michel Chevalier & Michel Gutsatz: Luxury Retail Management: How the World's Top Brands Provide Quality Product & Service Support “Part conceptual, part operational, the book is truly insightful. Each chapter prompts key questions that luxury professionals are facing, and thanks to the authors’ trusted expertise, the insights and solutions described are very
– Thomas Lindemann, Group HR Director, Richemont International
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Private Label Beauty Brands: an Executive Briefing
Private Label Beauty Brands: an Executive Briefing for Eurostaf A complete Report written for Eurostaf:
The new competitive brands environment
Why are private label brands a major issue today?
What are the main trends driving the growth of private label brand?
What are the different strategies led by retailers and the different business models?
What are the key success factors of private brands?
What are the new challenges faced by national brands?
The American drugstores - CVS, Walgreen, Rite Aid & Duane Read – are important distribution channels in the United States, and are going through a fundamental change, especially with regard to beauty products. Each of the four chains is developing a different strategy but with a single objective: to increase sales of beauty products.
CVS was a pioneer in 2008, launching a new chain dedicated to beauty called Beauty 360. Four of these stores exist today and the number should reach 30 by the end of 2010. Solely devoted to “premium” beauty and niche brands, this store is akin to a "speciality store", like Sephora, with a large counselling staff, services and demonstrations. "This new concept will redefine the beauty shopping experience by providing customers with access to prestige and niche beauty brands as well as an unparalleled level of service". These stores are adjacent to CVS stores and have access to them.
Walgreen has chosen to capitalize on the trust its customers place in the brand. This stems from the presence of pharmacists in the stores. Walgreen has therefore undertaken to develop a "customer-centric", 4-point strategy concentrating on its current stores: training of "beauty advisors", developing its own beauty brands, upgrading the range of products (Fekkai is one example), restructuring merchandizing, etc.
Rite Aid continues to maintain its positioning, centred on pharmacy and proximity to its customers. Beauty products are located in the centre of the new store - which has been completely reorganized - with low gondolas, great clarity, merchandizing intended to counsel the client. This is certainly the mass market, but one of high quality.
Duane Read has begun a total transformation of the architecture of some of its stores: The first one just opened in New York on Herald Square. The 1400m2 store on two levels has devoted the top floor of 540m2 to beauty products under the name Look Boutique.
Thirty new stores with the same concept are to be opened in 2010, half of which will include Look Boutique. Here one finds Lacoste, Juicy Couture, Usher, Burberry and Gwen Stefani perfumes, and skincare products such as Avene, La Roche-Posay, Lierac (already present); also new brands such as MD Skincare by Dr. Dennis Gross, 100% Pure, and Rilastil Borba. Exclusive brands are clearly separated from mass brands and "beauty advisors" are to be present during peak hours. And of course – giving it a strong competitive advantage - the store is open around the clock (as opposed to the neighbouring Sephora and Macy's).
A Mass-market approach, but with quality (Rite Aid), a chain dedicated to high-end beauty products (CVS), a store-in-store devoted to high-end and mass (Duane Read), the development of beauty private labels and service (Walgreen)… Who said that the beauty distribution landscape was bleak and that nothing was happening?