Boy-toy peddler Best Buy seeks balance with women's health store

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What's Best Buy doing opening a store where a woman can take a pilates class, drink a latte while researching the latest breast-cancer treatments, find a new eye shadow, fill little Johnny's prescription and even get those fading blonde highlights touched up?

EQ-Life, Best Buy's test concept store opened in Minneapolis last month, aims to help women achieve "equilibrium" by offering under-one-roof access to health (i.e., body fat monitor, $50), wellness (i.e., herbal clay body peel, $45) and technology (i.e. , heart defibrillator, $2,199). With a wave of consumerism spreading in healthcare, an aging baby boomer population obsessed with health and wellness and unprecedented advances in home diagnostics, EQ-Life is a glimpse of a new retail future. "They are redefining the big-box concept for the healthcare category," said Candace Corlett, a principal at New York-based WSL Strategic Retail.

Better known for targeting men with loud music and an endless selection of electronic "toys," Best Buy's multimillion dollar EQ-Life investment also reflects the pressure publicly traded retailers face to find new paths to growth when the prospect of category saturation rears its ugly comp-sales-busting head. "They are getting close to being fully penetrated," said Mitchell Kaiser, a retail analyst at Piper Jaffray.


The nation's largest electronics retailer with $27 billion in sales and 805 stores in North America continues to open stores-78 in fiscal 2005 alone. Yet comparable-store sales growth dropped to 4.3% from 7.1% in 2004 and come nowhere close to the chain's early boom years: 19.9% in 1995 and 26.9% in 1994.

Mr. Kaiser said the once-simple growth formula of opening stores has evolved into a three-pronged strategy: Growing sales per square foot, expanding internationally and creating new retail concepts like EQ-Life. "Because of the sheer size of Best Buy, it will be a long time before [EQ] sales impact earnings," he said. "But this would be an entree into the healthcare side of technology where the margins are better than in consumer electronics."

The concept began two years ago in the mind of EQ-Life President Mike Marolt, who left his position as president-retail operations at Best Buy, gathered a team and launched 18 months of consumer research, working with Accenture, the Institute for the Future and IBM. The focus group tally thus far: 32 with another handful planned with shoppers later this month. "The women said, `We don't want a sickie store.' They wanted a place to come and experience and learn and explore." The focus groups also uncovered the desire for pilates and yoga classes, the inclusion of a 4,000-square-foot DaySpa and a Caribou Coffee cafe.


"Women said things like, `Don't just give me Tylenol and 20 different generic alternatives, give me natural and organic choices too,"' Mr. Marolt said. "They also wanted more luxury brands than what you might find in a Wal-Mart or CVS." That's why instead of Pantene shampoo, women find Rene Furterer, a high-end hair-care brand out of France. Instead of Almay cosmetics, EQ-Life carries the Urban Decay cosmetics line out of New York, among others.

A division of the WPP Group, Fitch: RPA, a retail experience and design firm in Columbus, Ohio, spent 13 months creating the in-store design. The biggest challenge, said Carrie Keeneth, senior environmental designer at Fitch, was creating intimacy in what was essentially a big-box store with 18,000-square-feet of space. "It needed to be warm and inviting without being overwhelming and intimidating," she said. "Unlike at Best Buy, there are warm lights and understated music."

The store is divided into zones based on primary health states like healthy heart, diabetes or women's issues. Merchandising isn't typical. An interactive kiosk might include displays with pedometers and body-fat analyzers alongside recipe books and yoga mats.

The zones are divided by 10-foot tall "canyon walls," which serve double-duty as display walls and in-store signage promoting seasonal themes. Eventually the walls can serve as in-store billboards and be sold as media space to manufacturers and suppliers of store merchandise, according to Ms. Keeneth.

To get the word out, EQ-Life worked with Clarity Coverdale Fury, Minneapolis, to create a six-page brand book that was mailed to 10,000 "influentials," such as pilates and yoga instructors, sports medicine offices, massage therapists and physical trainers in the local market. The agency also created a series of magazine and newspaper ads in local publications for a campaign called "Equilibrium," to promote the store's grand opening.

Health-care-product marketers have embraced the fresh take on merchandising. "Other retailers are putting a health-care product or two on a shelf and calling it a center," said Nancy Nygren, director of consumer markets for defibrillator marketer Medtronic Emergency Response Systems. "As consumers take more and more control of their health, manufacturers are looking at the retail [health-care] space as a whole new place to market and build a brand," she said. "Every retailer is looking at this. Best Buy was just the first to jump."

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