It was standing room only Thursday night at the Cosmetic Executive Women’s Beauty Retail Revolution presentation featuring Shannon Curtin, divisional vice president and general merchandising manger of beauty and personal care at Walgreens, Chance Wales, director, category leader Health & Beauty for Amazon.com in the U.S. and Karen Grant, vice president and global beauty and industry analyst for The NPD Group. Jill Scalamandre, the chief marketing officer of StriVectin and Nia24 moderated the panel.
The three speakers reviewed what’s currently happening in the market as well as predictions for Christmas. Each also provided a glimpse into the future.
One of the most interesting messages came from Wales on how instrumental Amazon.com is when consumers are searching and researching products.
“People don’t just purchase online and that’s fine with us,” he explained. Amazon has build tremendous trust with consumers, fostered by high levels of customer service. “We live and breathe customer services.”
There’s tremendous potential to drive more sales of beauty on the site, said Wales, who noted that 74 percent of Amazon customers make offline cosmetics purchases. That’s also a testament to how beauty is researched on Amazon prior to consumers visiting a brick-and-mortar store.
Getting more prestige brands is a goal since most requests Amazon gets in beauty are for the upscale lines. Currently the mix is 60 percent mass items to 40 percent prestige.
Wales said the beauty team will monitor Amazon’s venture into higher-end apparel to learn how to properly reach consumers looking for premium goods. Other goals are to sell more multiple items, replacement products and companion products. There will be more suggestive sales of items others who have purchased the products added to shopping baskets.
While Walgreens is certainly known for its stores, the company is also developing a robust online business thanks to its acquisition of drugstore.com, which includes beauty.com. As hoped, beauty.com has given Walgreens more knowledge of the prestige beauty business.
As far as traditional Walgreens stores, Curtain said 63 percent of Americans live within a three miles radius of a Walgreens (a number that jumps to 80 percent when expanded to five miles). To fully understand how much tonnage the chain sells consider this — Walgreens moves an incredible 36 pieces of mascara per minute.
Although late to the game, Walgreens is now rolling out a loyalty program that the chain plans to use to further develop customer relations. Walgreens also has 26,000 well-trained beauty advisors who Curtain said are instrumental in selling beauty. She hinted that more Boots products will be coming aboard at Walgreens as Walgreens purchased a stake in Alliance Boots earlier this year.
The purchase of Duane Reade has paid off in improvements in stores with the concept of Duane Reade’s Look Boutiques opening in new markets. There are now 38 Look Boutiques and Walgreens has aggressive growth plans for the format — in the right markets.
“It is our DNA to be the best in beauty. We are going to take the best of our businesses, take what they’ve done and use the best of the best,” she said of Walgreens tapping concepts from its recent acquisitions.
Both Amazon.com and Walgreens have access to more premium brands and Wales and Curtin concurred with Grant’s statistics that the prestige business is growing faster than mass at this juncture. Grant said the 11 percent gain in the prestige business in 2011 were the highest in the past 15 years. She said NPD will start measuring beauty sales in the direct to consumer category, which will give the company an even sharper picture of total beauty sales.
As far as categories, Curtin said nails continue to dominate the drugstore environment as well as BB creams and other skin care items. “Again, our BA’s help us sell higher price points in skin care,” she added.
Grant said fragrances showed the first increases in years — thanks to a certain young man by the name of Justin Beiber and other fragrances last year. She expects fragrance will have a good holiday season for 2012 along with nail color, BB creams, brighteners, artistry makeup brands and lipstick hybrids combining color and lip balm.
People Place and Things
Shannon Curtin hasn’t missed a beat in the beauty business despite giving birth just 15 weeks ago. She discussed the Walgreens’ beauty consumer, how the retail chain can nurture new brands and why it doesn’t just sell “product” but the experience, too.
Walgreens’ Customers: “Our shopper is a confident woman and we offer her all platforms. In stores, she can opt in or opt out of service. We have 26,000 beauty advisors who build relationships. If they want to shop on their own, we have educational Web sites. We also offer online and a retail store environment.
On the Experience: Fun is what sets us apart. I tell people to stop selling me products and sell me the experience. A good example is Revlon when we launched GrowLuscious on the Jumbotron in Times Square with Jessica Biel. People loved it. We love to co create together [with vendors]. Launching New Brands: We have the capability to launch in one store or many stores — it depends on the company and what they can handle — or one store and online at the same time. I like to use the example of Yes To [Carrots, Blueberries, etc]. We started with six items in select stores and now carry 47 items.
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