Harmon Discount Health & Beauty to be Renamed
By Laura Klepacki, special to GMDC
Harmon Discount Health & Beauty, the New Jersey-based division of Bed, Bath & Beyond, recently opened its 39th store in a new highway strip center in Clifton, N.J. under the banner Harmon Face Values. In signage in front of the store and on shopping bags the word Harmon appears above Face Values, but in much smaller letters.
A new logo emphasizes the V in Values by using a different typeface and is shaded red while all other letters are white.
BB&B company officials have remained mum on the topic. Even in a conference call Wednesday reporting its year-end numbers, no mention was made of the change. The company also did not respond to phone calls for comment. But a store associate in the Clifton unit remarked that the plan is to rename all the Harmon stores.
Debt-free and with sales climbing – from $5.8 billion in 2005 to $6.6 billion in 2006 – Bed, Bath & Beyond is in expansion mode. It plans to add another 70 units to its flagship BB&B division, now totaling 816. It also just acquired Bye Bye Baby.
Since absorbing Harmon in 2002, it has built the chain from 29 to 39 stores and introduced Harmon shop-in-shop departments in several Bed, Bath & Beyond stores. In the conference call, company officials said they were expanding that initiative, but did not say how many Harmon shops currently exist or would be added.
Harmon has built a reputation with consumers on wide variety and low price. The newest unit, at about 3,200 sq. ft., is smaller than the typical Harmon store that ranges from 5,000 sq. ft. to 9,000 sq. ft. The company apparently is interested in testing various footprints.
The Clifton store, while using the basic merchandising techniques of the chain including a gauntlet of blue plastic baskets filled with travel-sized and bargain products lining the entrance, brings a finer touch to the front-end with wooden flooring. The rest of the store is covered with indoor/outdoor-type carpeting.
In a random review of prices at a Walgreens, a CVS and a Harmon in West Caldwell, N.J., Harmon’s prices did come out lower. A Revlon Super Lustrous lipstick was $5.59 at Harmon, compared to $7.99 at Walgreens and $7.49 at CVS; Crest Renewal Whitestrips were $34.99 at Harmon and $39.99 at both Walgreens and CVS; and the L’Oreal Refinish Exfoliating Facial Kit was $10.99 at Harmon, $14.99 at Walgreens and $12.99 at CVS.
Harmon also continues to push its private label program. On-shelf signage throughout the stores takes direct aim at its branded competitors. For instance, it compares a 16-oz. Harmon skin lotion at $3.99 to the Lubriderm item priced $7.59. A 16-oz. Harmon brand Tea Tree shampoo for $5.99 compares to a much smaller 8-oz. Paul Mitchell Tea Tree shampoo for $8.99.
Discussion
Questions: Will developing Harmon stores-within-the-store at Bed Bath & Beyond make it easier for the chain to open standalone locations in new markets outside the New York metro area? As a store-within-the-store concept, is Harmon a match for the Bed Bath & Beyond
profile? Is Harmon’s pricing strategy a viable means for it to compete against
the likes of Walgreens, CVS and Rite Aid as well as competitors in grocery,
mass and clubs?
Bed, Bath, & Beyond’s culture is to grow the number of store locations very carefully. Far too many retail chains hurt themselves by expanding much too fast. BBB bought Christmas Tree Shops and Harmon, and they’re being careful about expanding those concepts. Further good management sign: the acquisitions are clustered in New Jersey, instead of being scattered all over the country. Another sign of retailing skill: testing store within a store and co-location (side by side) strategies. How many retail chains just roll out without careful testing?
The Bed, Bath, and Beyond and Harmon’s store within a store business model will be successful because, in my opinion, it really doesn’t try to compete head on with chain drug stores in the traditional sense. The BBB-Harmon’s consumer is shopping with a different primary objective in mind to purchase mostly categorical items not necessarily available in chain drugs and other channels. However, while she shops these stores she knows she can also pick up Harmon’s products at value prices. I think this will work well and not hurt other channels in a direct way.
Emphasizing Harmon’s Value is a smart move. Across other industries, we’re seeing growth at the high and low end of the market. In the food world, both Whole Foods and Wal-Mart are pressuring the supermarkets in the middle. In apparel, Target and top end boutiques continue to set the trends while traditional department stores struggle. Translate that trend to Beauty Care. We’re seen a rise in the high end of the market with players like Kiehls and Boots. Harmon has lots of opportunity to create be the beauty value offering.
The store within a store may work well because: 1. The consumer has already been trained to look for HBA in the store; 2. The target is the same; 3. An offering of convenience with selection should be very motivating on this shopping mission.
More power to you, BB&B!