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CVS beauty care mix brings new energy

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Drug chain ups the ante against specialty beauty retailers

CVS beauty aisle_NYX Cosmetics display

WOONSOCKET, R.I. — CVS Pharmacy is unleashing a bevy of new items to prove it can compete with specialty beauty care merchants and lure younger beauty-crazed shoppers.

Competitors offering the latest trends had siphoned off some of those customers, but now CVS is finding a path to add newness at lightning speed — and at affordable prices — to bring them back.

While Revlon, CoverGirl, Maybelline and L’Oréal will always be crucial to the chain’s mix, those venerable brands face fresh competition from up-and-coming logos. That’s even prompting those brands to buy up the innovators, as exemplified by L’Oréal’s purchase of NYX. Another ploy is to add beauty icons, which Revlon just did in its signing of Gwen Stefani as an ambassador.

Still, when CVS eyes where its growth is coming from, fledgling brands have brought in the dollars. All told, there are more than 2,800 new beauty products featured in many CVS doors.

With shoppers taking their cue from social media instead of traditional forms of advertising, smaller companies are on an even keel with the behemoths to get their message out to shoppers.

CVS new beauty brands

Some of the new and trendy brands that CVS Pharmacy has brought in to spice up its beauty offering.

That means several things to chains such as CVS. A seismic change is the speed to market with which innovation can debut at mass, meaning shoppers no longer have to wait for innovation to trickle down from premium to popular price.

On CVS shelves now there is Wunderbrow to keep up with the brow phenomenon. There’s Nip+Fab, which is lauded by the Jenner/Kardashian clan. Korean beauty merchants have nothing on CVS — the company has its own mask line. Shoppers who want natural à la Tata Harper also have lower-ticket options.

CVS wants to beef up beauty, a category that can help offset the pressure on profits at the pharmacy counter. At CVS Health’s recent Analyst Day, CVS Pharmacy president Helena Foulkes said health and beauty items produce 1.7 times more profit than many other front-end categories. She shared that in 400 elevated beauty stores beauty sales jumped 4%.

The company pointed to the potential to scale up resets in 3,000 stores over the next several years. While health and beauty products comprise less than half of CVS’ front end now, the company intends to push that to 80%.

Directing the efforts to bring newness to the forefront at CVS is Alex Perez-Tenessa, vice president of beauty and personal care merchandising. He gives the nod to growth from smaller, trendier brands, which he feels is helping CVS get more beauty enthusiasts into its doors. “We are seeing more Millennials or those who are first to try new beauty items,” he said.

While much of the industry has been focused on efforts at Walgreens or Target Corp. to burnish beauty, CVS has also been upgrading its look and assortment, albeit quietly until now. The goal is to bring scalable improvements across the chain. The company puts each and every beauty brand to the test to make sure there is a return on the space investment.

“We carry favorites, but we want to be the place where customers find innovations at affordable prices,” Perez-Tenessa said.

And just as Sephora has been a launching pad for new lines, CVS can also nurture innovative lines. The use of its ExtraCare loyalty data helps mine the best customers for new lines.

Service is moving to the forefront at CVS. Too often, visits to stores found beauty staff attending to housekeeping. That didn’t sit well with Perez-Tenessa. Now they have been relieved of those duties with a single goal — to educate shoppers — and they have tools such as iPads to help in some stores. CVS has new Trend Centers right at the entrance to the beauty department to direct shoppers to its new product jewels.

Wunderbrow is one such discovery. “We saw customer demand for brow solutions,” explained Perez-Tenessa. “The brow category is on fire in beauty right now.”

Professional skin care is also key, with the chain adding more Healthy Skincare Centers. The chain added 700 more of the sections last year and doubled the product assortment.

Shoppers can’t help but see the huge statement CVS is making in nail with a new nail bar starring Essie Gel Couture in 1,500 stores along with other nail essentials that are designed to own the category. The display is at the entry of the beauty area.

“We are seeing more customers discover us for beauty, and there is more to come,” concluded Perez-Tenessa. “We are seeing the reaction from customers when they come into our stores.”


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