For years, the beauty industry has been able to boost sales, when needed, by attracting younger consumers. The theory was that the age group wasn’t yet strapped with house and child rearing expenses and could afford to purchase more beauty items. When drug chains wanted to expand their reach, they added edgier cosmetics. Avon extended into Mark. Even skin care marketers touting wrinkle reduction zeroed in on younger users.
Now the so-called “Millennial” shoppers, ages 18 to 34, represent the highest percentage of Americans who do not have enough money to cover their basic needs. That’s according to research from consultancy WSL/Strategic Retail.
WSL found that nearly 25 percent of the young adult market reports it can’t make ends meet, as compared to 17 percent of adults ages, 35 to 54, and only 13 percent of those age 55 and over. The results were presented as part of WSL’s How American Shops MegaTrends report, Moving On 2012.
“The young adult market has always been known for being the most fashion forward, first to respond to trends and first to adopt to new retail channels,” said Candace Corlett, president of WSL/Strategic Retail. “But they’re also the group that’s been hit hardest by the economic recession which has left them struggling to find jobs and pay down student loan debt.”
Wendy Liebmann, chief executive officer at WSL continued, “This decline in Millennial spending power presents a significant challenge to brands and retailers who have long considered young adults to be the golden ticket to sales growth. Businesses must begin rethinking their strategies to lure these shoppers to buy. At the same time, they must reevaluate the power of this generation to support new brands and stores.”
To attract the Millennials, the WSL research suggested that pricing messages once eschewed for reaching younger consumers move to the forefront. That’s because 80 percent believe it is important to get the lowest price on most things. Sixty percent said they are likely to choose a lower priced brand over the usual brand if they can save money. Their love for the Internet is evident in the fact that 57 percent make a point to search online for discounts before shopping. And, 63 percent are now sticking to only those brands and stores they know they can afford.
An already strong pricing strategy is important in serving them. It could be a reason J.C. Penney Co. Inc. has adopted its new pricing strategy and why Wal-Mart went back to touting price. This shopper segment may rewrite the retailing rules for the next few decades. However, this research could also encourage marketers to look once again to the more mature consumers as the bread and butter. Revlon was, perhaps, too ahead of the game with its Vital Radiance (maybe it is time to bring it back?) and retailers might need to return more space to products women over 40 and even 50 want and can afford to buy.
People, Places and Things
A few words with Barbara Lampugnale, executive director and founder of Duality Cosmetics who struts her new nail polish called Nail Pak, a patented three-in-one nail care system in front of investors last week on Shark Tank and ended up with a deal on QVC. The nail color has a bottom that screws onto the bottle, which houses pads with nail polish remover and a file.
WWDBeautyNews: The three-in-one concept is clever, but the colors are really cool, too. Can you discuss the commitment to new colors, what ages are they targeted at? How often will there be new colors? Lampugnale: We have the three collections currently all in fashionable and classic colors — targeted for all ages. We will have seasonal collections based on new and exciting fashion trends, debuting approximately every quarter. Each collection has a story with the colors named after women related to the story. WWDBeautyNews: So QVC is a great start, what’s next? Lampugnale: I am so grateful that we got a spot on QVC. Within our eight-minute segment, we sold through our inventory! We are currently finalizing our distribution strategy and are in hopes of making an announcement regarding placement of the Nail Pak at a retail level in the very near future. I can’t reveal the terms of our agreement — but we are working together and things are going great. WWDBeautyNews: Are there other product categories planned? Lampugnale: Duality Cosmetics was created to provide quality cosmetics that serve at minimum a dual purpose. We have plans with other cosmetic categories but the focus right now is in nail care. We have other plans within the nail category, which we can’t discuss now, due to patenting issues, however we do have other plans for a fall and holiday collection as well as a Christmas package. WWDBeautyNews: How is shelf life, especially the remover pads? Lampugnale: Both the polish and pads have a shelf life of 24 months, if cared for properly.
WWDBeautyNews. How did you get on Shark Tank? Lampugnale: I applied for Season 1 after watching the previews and then I applied for Season 2. For Season 2, I made it through several interviews but did not make the cut because I didn’t have product. For Season 3, they contacted me asking if I had product yet — when I hung up the phone, I started making calls to assemble an amazingly talented team and three weeks later, I had my Nail Pak. My team, who I have been working with for about four years, includes my husband Pat, brother David, Mark Ryan from IBuildsocial, Martha Brady of Well Beauty Solutions, and my p.r. team.