From The January
2004 Issue of Natural Foods Merchandiser
Naturals' New Wrinkle: High End HABA
Move pricey purchases from department
store to your store
A $98 night cream, $24 shower
gel, $56 facial mask, $50 bust-firming cream—if you think
you’re at a Saks Fifth Avenue or Neiman Marcus cosmetics
counter, guess again. All of these items, and hundreds more,
are designed to be sold in natural foods stores.
Once the purview of grocery store-priced cosmetics brands,
natural products stores are responding to customer demand by
stocking high-end health and beauty care products. And an
increasing number of manufacturers are giving retailers those
products, with face creams, body scrubs, makeup and even soaps
that retail for $15 or more.
In the past year, more than a half dozen companies,
including Dr. Hauschka Skin Care, Annemarie Borlind of Germany
and Zia Natural Skincare, have launched health and beauty
lines designed to compete with the best-known high-end
products that are staples in many natural foods stores. And
the stores naturally want to cash in on the success of these
lines. Martha Bishop, segment manager for Dr. Hauschka, says
that last year her 25-year-old brand’s sales increased 22
percent in natural foods stores. So many requests have come in
from natural foods retailers that want to stock Hauschka
products that “we’re turning people down daily” because the
company doesn’t have enough stock or field representatives to
Linda Upton, vice president of sales and training at
Borlind, says her 23-year-old brand has seen no decrease in
sales during the recent economic downturn.
The new high-end personal care lines are designed to lure
crossover shoppers—women who traditionally shop in department
stores for personal care but who also have a social conscience
and are knowledgeable about natural and organic ingredients.
“We appeal to the LOHAS [lifestyles of health and
sustainability] market—a woman who still reads her
Glamour and her women’s magazines, but also reads Utne
Reader and Mother Jones and is concerned with the environment.
She’s very cognizant of ingredients, reads a lot, educates
herself a lot,” says Jeny Dowlin, director of marketing for
Symco, distributor of the Symbiotics Age Defiance line, three
skin care products priced in the $30 range that were launched
in August 2003.
“The people who are going to Nordstrom and Saks Fifth
Avenue to buy their cosmetics are coming [to natural products
stores] to buy their food. They’re willing to pay a premium
price for high-quality, natural, pure products, so why not
extend that to [personal care]?” says Adrian Larralde,
president of TransitWave Int’l., distributor of Mirra, a
Russian skin care line that debuted in the United States in
March 2003. Mirra has 25 products priced from $19 to $50.
Another market consists of consumers who don’t shop in
natural foods stores but who have had adverse reactions to
harsh ingredients in mainstream personal care products. “As
people develop problems, they go to the health food stores to
see what they have,” Upton says.
who buy high-end beauty care are mainly baby-boomer women who
have the money and the interest to seek out natural cosmetics,
says Lisa Sedlar, vice president of sales, merchandising and
marketing for Pharmaca, an eight-store natural pharmacy and
personal care chain based in Boulder, Colo. Sedlar says about
70 percent of her stores’ facial care products are priced at
more than $15. Pricey skin care lines give Pharmaca an “image
of a unique and distinctive marketplace,” she says.
products also help increase the average
Higher-priced products also help increase the average
expenditure per customer, says Borlind’s Upton. “Are you
making money or are you just moving a lot of items?” Also, she
points out, customers who make the price commitment to lines
such as Borlind tend to be loyal to their brand and to stores
that stock it.
But marketing to these customers, no matter how
knowledgeable they may be, can be tricky. “People are going to
pick up our $150 cream and look at it and say, ‘Holy cow, why
does it cost that much?’ ” Upton says.
Is It Really Worth
Costly products have costly ingredients,
manufacturers say. And whereas more than 50 percent of a
mainstream health and beauty product’s price may be devoted to
advertising, that’s not the case with most natural personal
care products. Instead, the money goes toward ingredients and
formulations. Take Symbiotics’ Age Defiance line, for
instance. It’s made with colostrum from New Zealand cows,
where the organic standards are strict. Mirra’s products
contain sturgeon and salmon caviar and hand-harvested herbs.
Dr. Hauschka’s plant ingredients are raised biodynamically,
using a holistic agricultural process.
Formulations are also a value-added factor. Upton points
out that Borlind customers are paying for a large research
staff that creates cutting-edge technology, such as liposomes,
and extensive product testing. “That expertise takes a while
to build,” she says. Mirra uses a cold emulsification
processing technique that produces particles 546 times smaller
than the average skin cell, allowing better penetration, the
Cashing In On
Women—and the few men—who buy high-end,
natural health and beauty products aren’t necessarily rich.
Store owners and manufacturers both tell tales of
cash-strapped college students shelling out $30 for a Dr.
“Price is less of an issue after a product is sampled and
tried,” says Pharmaca’s Sedlar. “When your skin is glowing and
moist, you don’t care how much it costs.” That’s why sampling
is key to selling high-end products. Many large manufacturers
make trial sizes and have training staff available to do
in-store demos. In addition, they are anxious to train store
staff about the benefits of their products and give them
samples to try. The idea, says Upton, is to have someone
knowledgeable nearby when a customer picks up that $150
There’s another benefit as well, points out Mirra’s
Larralde. “If you’re fighting to keep a customer base and
build a relationship, what a perfect reason to talk to your
customers and interact with them.” This is particularly
important in natural products stores, because they frequently
carry smaller brands that don’t do much advertising. Customers
have to depend on sales staffs to acquaint them with the
Upton believes that staff at natural products stores can be
“as good as, if not better than, people in department stores.
They can have more conviction, belief and knowledge” in
natural ingredients. So do their customers. “You need to
market more toward ingredients and education. The person who
shops in natural foods centers is really savvy, has the
knowledge and doesn’t need the consultation as much as someone
shopping in a department store. Besides, food store shoppers
are label readers,” says Caren Conrad, general manager of
Boscia, a Japanese skin care line priced between $12 and $38.
Boscia was launched in the United States in fall 2002.
Conrad believes shelf talkers that explain how to use a
product and what it’s for are key. She suggests that retailers
visit their stores’ wine sections for inspiration: “Their
shelf talkers do a great job of explanation and
recommendation.” Pharmaca posts signs titled “Why We Believe”
in certain products, “Your Choice Naturally” product
ingredients primers, and offers “Five-Star Beauty Reviews” in
Customers who shop in department stores can
be flummoxed by health and beauty aisles in natural foods
stores. Where are the glass counters? Where are those ladies
in perfect makeup and white coats? “I don’t know anyone who
can truly counteract the department store image,” says
Pharmaca’s Sedlar. “But you can remove the barriers to make
products more accessible so people can try them.”
Pharmaca, like some mainstream stores such as Nordstrom and
Sephora, has moved away from the department store counter
approach and now offers “boutique” areas, where customers can
walk the aisles and try products themselves. Boscia’s Conrad
suggests that natural foods stores emulate these boutiques.
“Keep the product in shelves, but [in] clean shelves with lots
of testers, and a Kleenex and trash can area nearby so people
can try products.”
Pharmaca and some natural foods stores lure well-to-do
patrons by recreating the spa experience. They have an
esthetician and massage therapist on staff or on contract who
offer facials and massages in a room in the store.
When it comes to display, although most manufacturers
prefer that their lines be blocked, they want their products
on shelves, rather than in glass cases, and displayed next to
other lines of all prices. “If you put all the high-end lines
separately, you might miss out on a lot of customers who would
actually purchase them. It’s like saying these products aren’t
for everyone,” says Mirra’s Larralde. Putting a product behind
glass can be a hassle for customers who have to search for a
sales associate with a key, says Dr. Hauschka’s Bishop.
But some retailers opt for glass cases to reduce stealing.
Theft of high-end beauty products is a serious problem for
Pharmaca, Sedlar says. A year ago, the store installed
Sensormatic strips on all products over $25. Sedlar wouldn’t
say how much the Sensormatic program cost, but says it has
already paid for itself in theft reduction. Pharmaca also
places its high-end lines near cash registers. Other stores
put mirrors at the ends of personal care aisles and make sure
aisles are constantly staffed with at least one
Natural Foods Merchandiser volume
XXV/number 1/p. 42,44,46