Alli 60 mg Refill Pack 120 Capsules
10% Patron Savings
vs. Outside the Gate?
Higher
or
Lower?
Alli 60 mg Refill Pack 120 Capsules
Actual Price at DeCA:
$50.64
Avg. Price Outside:
$64.91
($ Savings: $14.27)
% Patron Savings:
22%
William “Bill” T. Wood
Category Manager – Non Edibles
HBC Categories
Represent 10 % of the Business!
$-Share on Total Store
Top 6 HBC Categories
$166.2 Million = 43%
52 WE March 20, 2010, $$ in mm
$16.80
PAIN RELIEF
$19.70
HBC
Categories
$383 Million
10%
Grocery Food
$1,806 Million
47%
Dairy
$391 Million
10%
Nonfood
$214 Million
6%
Center Store
Other
$157 Million
4%
Frozen
$396 Million
10%
Chilled Other
$503 Million
13%
SHAMP/COND.
$24.30
$25.20
BAR/ LIQUID
SOAP
SHAVING
NEEDS
$38.50
VITAMINS &
SUPPL.
$41.60
ORAL
HYGIENE
Source: Nielsen RMS, HBC Category = DeCA definition
Higher Share for Oral Hygiene,
Vitamins and Shaving Needs than RM
$-Share on HBC Categories
52 WE March 20, 2010
Commissaries
10.8%
Share Index
130
Remaining
Market
8.3%
Oral Hygiene
Bar/Liq. Soap
Source: Nielsen RMS
10.0%
160
6.2%
6.6%
184
3.6% 4.7%
Vitamins
Shampoo/Cond.
136
4.6%
6.4%
112
5.2%
Shaving Needs
Pain Relief
5.2%
84
4.4%
Higher Focus on HBC than
Remaining Market !!
$-Share on Total Store
52 WE March 20, 2010
Commissaries
Perishables
33%
Index
78
Remaining
Market
Source: Nielsen RMS
Perishables
43%
Center Store
Other
57%
Index
112
Center Store
Other
50%
Calculation Example: 56.5%/50.3% = 112
HBC
10%
Index
149
HBC
7%
Growth Opportunities with Bar/Liquid Soap
and Vitamins. Need for Action with Pain Relief!
%-chg. Vs YAGO
Patron Savings
52 WE March 20, 2010
22.8%
Pain Relief (3.6%)
(0.4%)
Shampoo/Cond.
23.4%
(2.7%)
(3.0%)
27.1%
3.9%
Bar/Liq Soap
7.8%
3.4%
Shaving Needs
23.1%
(3.7%)
28.3%
6.1%
Vitamins
10.3%
Oral Hygiene
(0.2%)
(0.7%)
Remaining Market
Source: Nielsen RMS
23.7%
Commissaries
Health & Beauty Execution Excellence
Create More Impactful HBC Endcap Displays!!

More emphasis on
display execution!

Review Display
Compliance Reports
Military Patrons – Shopper Segments



Single soldiers – always on the go
Young families – getting in and getting the job done to provide for
family
Retirees – taking the time, enjoying the company and finding the
deals
Single Soldiers
Military Outlets
Young Families
Retirees
Skin Care, Men’s and Fragrance
Will be a Significant Driver of Growth
Skin Care
Men’s Beauty/
Grooming
Fragrances
Potentially, a $1 Trillion Business!
The market is predicted to grow to $1 T by 2020.
Beauty & Health Annual Spending
Unlike most key categories throughout the store, she
spends more annually on Personal Needs as her product
needs change at different lifestages.
Beauty & Health Annual Spending
Annual Dollar Spending

$445
$425
$405
$385
$365
$345
$325
New Families
(kids <6)
Maturing
Families (kids
6-12)
Established
Families
(Teens 13-17)
Empty Nester
Couples
Lifestage
Nielsen HH Panel CY 08
Beauty & Health Annual Spending
HH’s with children spend +22%
more annually than households
without children.

Avg Annual Beauty & Health Spending - CY 04
$400
$381
$380
$360
$340
$320
$300
$311
$280
HH's without Children*
HH's with Children**
Avg Annual Beauty & Health Spending - CY 04
* HH's without children include singles and couples 18-54 yrs old without children.
** HH's with children include new, maturing, and established families with children <18.
Nielsen HH Panel CY 04
Beauty & Health Annual Spending

Remarkably, beauty & health annual
spending for empty nester couples is +12%
greater than HH’s with children!
Avg Annual Beauty & Health Spending - CY 04
$430
$420
$410
$400
$390
$380
$370
$360
$350
$425
$381
HH's with Children*
Empty Nester HH's
Avg Annual Beauty & Health Spending - CY 04
* HH's with children include New, M aturing, and Established Families.
Nielsen HH Panel CY 04
Demographic Trend - Graying of America


The number of people 55+ has grown +27% from 2000–2010
This group is projected to grow another +28% from 2010–2020


Everyday beauty & health needs change at various lifestages
Opportunity for retailers to grow sales across beauty & health
Population (Millions)
Graying of America Projections*
95.8MM
75.1MM
52.4MM
1990
59.3MM
2000
2010
Years
# of Persons 55+
* US Census Data
2020
4 Traits of HBC Shoppers
“We want to feel confident
in the choices we make for
our families.”
“We want to choose
the right solutions for
each family member’s
needs.”
“We want to do our
best in helping our
families achieve wellbeing every day.”
“We want to find products
that fit the changing
priorities of our family
members and ourselves as
we age.”
4 Traits of HBC Shoppers
RETAILER IMPLICATIONS
Help shoppers find the right
products to satisfy the
needs of each individual
family member, and the
more shoppers will buy.
Can leverage consumers’
changing lifestages and
priorities to maintain loyalty
and build sales.
Ability to orchestrate shoppers’
choices and self-selections by
validating their decisions and
providing reassurance as they shop.
Opportunity to become the
primary destination for all
Personal Needs purchases
for every member of the
family – “one-stop
shopping.”
Olay Pro-X
Age Repair Lotion SPF 30 2.5 oz
20% Patron Savings
vs. Outside the Gate?
Higher
or
Lower?
Olay Pro-X
Age Repair Lotion SPF 30 2.5 oz
Actual Price at DeCA:
$28.79
Avg. Price Outside:
$40.66
($ Savings: $11.87)
% Patron Savings:
29%
Military Patrons –
In their own words…
Difficulty Finding New Items
“9 times out of 10
I can’t find it”
“You can go to Walmart and
you can go to somewhere
else…get the new thing that my
kids saw on the TV that they
want. But you can’t go to the
commissary…”
“They’re behind
the curve.”
“It takes them
forever to get
[new products].”
Assortment Problems
“One time they have
it, then they don’t
have it anymore…
That’s kind of
annoying to me.”
“It doesn’t seem to
flow… Where’s the
freaking mousse?”
“They don’t have
a large selection
at all.”
Neil Stern
Senior Partner,
McMillan Doolittle
Why Get Excited About HBC?
 HBC
has been one of the most consistently growing
categories in retailing over the past decade.
 Projected to continue that way as consumer concerns for
their health, well-being and appearance remains
unabated.
 The category is attractive to retailers due to new products
driving incremental overall sales, higher overall margins
and higher rings.
 It is little wonder that most major retailers are devoting
additional space, merchandise attention, enhanced
displays and information to the category in an effort to win
customers.
27
The Keys to Winning
1.
Clear delineation of Health, Personal Care and Beauty
2.
Create an environment that causes consumers to “Stop”
3.
Use key organization principles within the category
4.

Choices organized by brand, price point, promotion

Drive regimen sales, trade-up, and trial
Highlight “new” within the categories
5.
Provide clear and compelling information on how to
choose
6.
Wow them—unique environment, great savings, etc.
28
Keys to Winning in Action:
Best Practices

Mass Retailers:


Supermarkets:
Drug Stores:

Specialists:
Target, Walmart and
Costco
Kroger and Stop & Shop
CVS and Shoppers Drug
Mart (Canada)
Ulta, Sephora and others
29
Facts on Walmart HBC

Walmart sales have moved from 45% to 51%
grocery/HBC over the past 5 years

Walmart HBC sales were $18 billion in 2009

They have a 30% share of the US market
Note: The following pictures are intended to be thought-starters only.
Moving HBC Over to Food Side—
More Prominence, More Traffic
Stopping Power—Wood Floors, Lower
Profile, Slanted Aisles
But, Still Communicating Value
With Information/Promotion Now at
Product Level…
1. Adjacencies: Health Interplays with
Pharmacy…
2. Visual “Stopping” Power…Curves
Promote Intimacy and Browsing
3. Organize—Brand, Price Points for
Trade-Up
4. Promote Regimen Selling…
5. Focus on News…and New
6. Information…
7. Wow! Stopping Power, Trial,
Uniqueness…
Costco: Wow! Can be a Price, or an
Unexpected Item…
Great Pack and Price Point
Supermarkets Creating a Distinctive
Look…
Color-Coding Health…
And Beauty…
With Way-finding, Information and
Adjacencies…
And Help in Making Choices…
Walgreens Lowered Profile for
Better Navigation
Focusing on New
And Better Information…
But the Bar Keeps on Rising…
With Enormous Product Choice…
DeCA Can Create Its Own Path to
Winning
1.
2.
3.
4.
5.
6.
Clear delineation of Health, Personal Care and Beauty
Create an environment that causes consumers to “Stop”
Use key organization principles within the category

Choices organized by brand, price point, promotion

Drive regimen sales, trade-up, and trial
Highlight “new” within the categories
Provide clear and compelling information on how to
choose
Wow them—unique environment, great savings, etc.
57
Creating the Path To Meaningful
Differentiation
Delight the Shopper
Wow!
Best Prices
Unique
Environment
Category Organization
Principles
Brand, Trade-Up, Regimen Selling
Compelling Information … New
Make It Simple
Clear delineation of categories
Adjacencies, Layout, Assortment Basics
Upward Progression
Provide In-Store
Guidance
58
What We Know Now…




We know the Health & Beauty categories are
growing as consumer concern for their
health, well-being continues.
We know how she shops…
We know why she does not shop the
Commissary.
We know the Commissary’s price is right!!
What Can We Do?
4 Traits of HBC Shoppers
RETAILER IMPLICATIONS
Help shoppers find the right
products to satisfy the
needs of each individual
family member, the more
shoppers will buy.
Can leverage consumers’
changing lifestages and
priorities to maintain loyalty
and build sales.
Ability to orchestrate shoppers’
choices and self-selections by
validating their decisions and
providing reassurance as they shop
Opportunity to become the
primary destination for all
Personal Needs purchases
for every member of the
family – “one-stop
shopping.”
What 3-4 Changes Can We Make
Now?
1.
2.
3.
4.
Communicate Patron Savings…
Loud and Often!
Display, Display, Display!
Highlight “New” in All Categories!
Educate Her at Shelf!
What is it worth?

If military shoppers frequent military outlets
1 more time in a year…
$335,000*
*Source: AC Nielsen Homescan Panel
Bausch & Lomb PreserVision Eye Vitamin and
Mineral Supplement with Areds - 120 Softgels
Actual Price at DeCA:
$20.14
Patron Savings vs.
Outside the Gate?
________%
Bausch & Lomb PreserVision Eye Vitamin and
Mineral Supplement with Areds - 120 Softgels
Actual Price at DeCA:
$20.14
Avg. Price Outside:
$29.74
($ Savings: $9.60)
% Patron Savings:
32%
Questions, Suggestions
or Feedback?
The hand fans are yours to remind you
of the keys to winning our patrons back
with up to 50% savings!!