CVS And Walgreens Open Cosmetique Boutiques With Low Prices

By Margarita Nahapetyan

CVS and Walgreens, the nation's largest drugstore chains, are redesigning their beauty departments and start offering spa-like boutiques as a cheaper alternative to department store cosmetics counters.

As the recession cuts into household budgets, both CVS and Walgreens are trying to provide the cost-concerned customers with the option to buy commonly expensive beauty products in their boutiques for significantly cheaper prices, compared to their department-store counterparts. "We are starting to see people talk about the need to spend some money," said Wendy Liebmann, president of WSL Strategic Retail, a consumer behavior research firm in New York. "But they are not going back into the high-end stores to do this."Liebmann said that there is no doubt that people will be doing more shopping, but, the difference will be that they will be making their purchases in some other places for some time.

According to WSL, female shoppers started to cut back when it came to buying beauty products after finances started getting tight last year. Some are using what they already have, some just buy fewer products, or swotch down to less expensive brands, the firm says.

In order to attract more shoppers who are both beauty and proice-conscious, drugstores and discount store began to stretch into higher-class products. For example, drugstore brand Oil of Olay has reported that its Olay Regenerist Micro-Sculpting Cream, which costs $30, "whipped" the world's most expensive creams, even the ones that cost $350 or more, according to advertisements, citing a Good Housekeeping test. And now, the brand offers a $47 anti-aging cream called Olay Pro-X. "Consumers are smart, and I think they are less concerned about where they shop," said A.G. Lafley, chairman and chief executive officer of Procter & Gamble Co., the maker of Oil of Olay, when asked about Olay Pro-X.

CVS opened its first three thousand square foot Beauty 360 boutique in Washington, D.C., last November, and has afterwards launched stores in Mission Viejo, California, and Ridgefield, Connecticut. All boutiques offer prestige brands that are not available in the drugstores, such as Bioelements, Cargo and H2O Plus. Furthermore, they offer spa services such as facials, manicures and hand massages. The Beauty 360 stores are connected to CVS drugstores through a breezeway and have separate street entrances. All stores are designed in a way to resemble cosmetic floors in the department stores and all employ professionally trained beauty advisors.

Walgreens for now does not say much about its new beauty makeover inside the store, with an exception that at this point it is testing the concept at 35 stores. The Deerfield, Illinois-based company pulled out all the stops at its 3-story Times Square store that was launched at the end of last year. The beauty department is very bright and spacious and even has a L'Oreal store. Walgreens does not expect to build a replica of the outpost but has an intention to put elements in some of its higher-end stores. "We wanted to see what we can do," Walgreens CEO Gregory Wasson said. "It is an example of where we can go."