Alicia cash teen

In 1999, teens spent $10 billion on beauty items, according to research conducted by Seventeen magazine. And though that money was spent across various channels of distribution, chain pharmacy stores, for their rich tradition in the beauty business and their self-service atmosphere, are uniquely positioned to pick up a greater share of what promises to be an expanding pie as retailers can expect more teens to enter the marketplace over the next several years, with more money to spend than any other time in the history of retailing.

According to Amy Cooper, Seventeen's director of research, when it comes to cosmetics and personal care items, "teens and young women buy a combination of mass and class/prestige items." In a recent survey, Seventeen readers said they most often purchase their cosmetics at mass discount stores such as Kmart and Wal-Mart, followed by drug stores and then department stores. They are willing to spend more for more upscale foundation brands to cover up acne or skin problems, which often develop in the pre-teen years, Cooper said. But she noted that items such as lipstick and mascara are "easily bought in drug stores and mass merchandise [outlets] at a lower cost--especially lipstick--which teenagers [can use] to experiment with color and [it won't] break the bank."

Certainly, many already have begun to make serious inroads to the teen market. Some carry their own teen magazine, called Teen Beauty Handbook, published by Compendium Systems Corp. of Port Chester, N.Y. Teen Beauty Handbook is a 99-cent, "how-to" beauty grooming and health magazine found at the cash registers of 104 drug chains, including Walgreens, Duane Reade and CVS.

According to Compendium's president, Jack McAuliffe, "teenagers like to have a feeling of belonging and a sense of their own identity. And that's what we're trying to establish [with Teen Beauty Handbook]," he explained.

Last August, CVS emerged with a customized edition of the handbook called grl lab. But for CVS, the term "grl lab" stands for more than just a magazine; the name represents a major initiative for CVS in terms of marketing directly to the teen population. grl lab is also a self-serve merchandising display currently in the beauty departments of approximately half of CVS's 4,100 stores.

"It's a multi-shelf unit with its own specific branding designed to appeal to teenage girls," explained Todd Andrews, director of corporate communications for CVS. With a pastel pink and blue color scheme, grl lab functions as a separate unit within the beauty section of CVS stores. It contains beauty products such as lip gloss and nail colors, but also other accessories that might appeal to teenage girls, such as hair clips and diaries, Andrews said.

But for CVS, the focus of grl lab extends far beyond just earning share of wallet in the steadily expanding and increasingly more profitable teen market. It is about initiating this customer to the CVS brand early and tying her to that brand for life. "The buying power of teenage girls has been increasing and is [already] considerable," Andrews said. "[But] also, our core customers are women, and if we capture that customer during her teenage years, then she'll remain a loyal CVS customer and shop beyond grl lab."

CVS hopes to roll out grl lab chainwide, but Andrews couldn't determine when the rest of the stores would receive the unit. "We're certainly considering it right now," he reported.

CVS isn't the only chain targeting the teenage consumer. Other national chains, such as Albertson's, are planning to "concentrate on [the teen market] as much as we can this year," according to Jim Young, the chain's director of category management for beauty care.

"It will be a primary focus in our cosmetics area and hair notions area, wherever we think there is a tie-in--whether it be an end cap or a promotional table," he explained. "We did some very strong [teen] business last year--more than I thought we would do, and I was very surprised."

However, according to Young, it isn't always so easy to reach the teen consumer because teens display little brand loyalty and are hit or miss by nature when it comes to sticking with a particular product. Still, to make things easier, "you can pick up the teen magazines and thumb through them [and see] who's advertising in them," he noted.

For other chains, not being able to fully reach the teen consumer is more a matter of geography. Though Duane Reade does carry the Teen Beauty Handbook, the chain does not specifically direct its efforts to the teen shopper beyond that.

"We're not focused on teen business because more than half of our stores are located in Manhattan," explained Gary Charboneau, senior vice president of sales and marketing at Duane Reade. "The incident of teens shopping in our stores is much lower than it would be in non-Manhattan locations. Our focus is on lines that appeal to the working-age woman."

Promotions vs. merchandising

Outside of New York City, other regional chains, operating in areas where there are more teens in the market, are realizing the buying power of this growing demographic.

Fruth Pharmacy recently began putting teen centers in 20 of its 22 stores. Amy Siders, the chain's cosmetics buyer, said the centers will use in-and-out promotions and carry some special cosmetics lines for teens. They will also be featured in Fruth's back-to-school newsletter.

But, the real key to keeping the interest of the teen consumer is keeping things fresh and in step with today's market. In order to attract teens to the centers, Siders said she needs to offer them a variety of different items each time they come in the store. "Once a month I'll have different displays," she promised.

Of course, it goes beyond just product. It is about creating an experience, an event around the chain. "We do a teen drawing every month. [Teens] come into the store and enter their name and address into the drawing. [Whoever wins] gets a $25 to $30 item each month," usually a bath and body or cosmetics item, Siders said.

And again, for Siders, the commitment to capturing share of the teen market is more of a long-term investment. Like CVS, Fruth wants customers to remain loyal to its stores beyond their teenage years. "It's important to reach the teen consumer when she's a teen and continue that business [of serving her] when she becomes a working woman," Siders said.

Although winning the brand loyalty of the teen customer is no cakewalk, because they tend by nature to be experimental with personal and beauty care products, explained Cooper, they "will remain loyal to your brand if it's perceived as being of a high quality and something that benefits their lifestyle." Of course, the earlier a chain can do that in the lifecycle of a customer, the longer it will be able to cash in on that brand loyalty.

But reaching the teen market is not the same for all regional chains. Take Kerr Drug, for example. Like Duane Reade, "Teens are not a large demographic in our markets," said Kristen Heinz, category manager for cosmetics and beauty at Kerr. Though she noted trends, such as boys buying hair color and girls buying anything with color (including lipsticks and nail items), teens "don't fit specifically into our marketing strategies, except in the mail stores, where we buy specifically for the large volume of teen impulse-purchase behavior," Heinz clarified.

While Kerr may not focus too heavily on the teen consumer, it certainly isn't ignoring her either, Heinz explained. For the past two years, the chain has been offering a special program called Saturday Teen Scene, which entitles teens under 19 to a 10 percent discount on all cosmetics every Saturday. To enter, teen customers simply fill out a card with their name on it. "We try to keep the program fresh with [new] manufacturer offers and samples," said Heinz.

For other chains, the plan is to reach the teen customer in the store through clever merchandising strategies. Happy Harry's deploys special endcaps in several of its stores that group together teen-focused items, including nail polish, lip gloss and Bonne Bell cosmetics. "We buy a lot of promotional items to put on [the endcaps], and we have some signs hanging over them, explained the chain's cosmetics and skin care buyer, Valerie Cheyney. But the teen demographic hasn't always been Happy Harry's first priority. Though the chain has always offered teen items, Cheyney admitted that Happy Harry's only recently "just started to [really] look at how we can drive the [teen] business."