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Critical Mass: Beauty’s Holiday Rush

Mass-market retailers banked on a last-minute surge and post-Christmas traffic to nudge holiday sales above last year.

NEW YORK — Mass-market retailers banked on a last-minute surge and post-Christmas traffic to nudge holiday sales above last year. As retailers tally numbers, most feel they eked out about a 3 percent gain.

Despite efforts to kick holiday shopping off as early as Thanksgiving, retailers and vendors lamented that consumers didn’t visit mass-market doors until the final countdown.

“It was a very late season, a slow start, with the major lift the last weekend and the Monday and Tuesday before Christmas,” said Shawn Haynes, vice president of sales for E.l.f. Cosmetics. “I don’t know if it was the weather or consumer confidence, but a lot of people waited for deals and as a result there was a surge just before and even after Christmas.”

Store visits four days after Christmas revealed price cuts helped clean out leftover merchandise. A Rite Aid in Amsterdam, N.Y., had an almost empty fragrance gift set display after cutting prices by at least 50 percent. A CVS Pharmacy in Hillsborough, N.J., had bare nail-color shelves. Bed Bath & Beyond ran out of Infiniti Pro by Conair’s Curl Secret online, temporarily driving shoppers to stores to get the new hot curler. Upscale retailers were out of the new Urban Decay Naked3 Palette, prompting some shoppers to look for similar shades at mass.

Still, buyers said the holiday was challenging and many only came out ahead because they had trimmed holiday buying budgets.

Retailers said efforts were stymied this year by the shorter selling period between Thanksgiving and Christmas, storms on key selling weekends, strong competition from online merchants and a lack of vibrant new products. Off-pricers such as TJ Maxx and warehouse clubs like Costco also continue to ramp up beauty offerings, giving chains new competition for consumers.

Added to that, market reports were that some chains didn’t get merchandise out to stores on a timely basis and missed early sales. One vendor said it stepped in when a major chain didn’t get merchandise from another supplier in time to fill a gap. One vendor left another chain without an important $3 and under price point in beauty that had to be replaced with $5 merchandise.

And, of course, Target suffered after it reported its credit card malfunction topped off by its gift card problem.

“At least there was good news for retail doors when the postal service and FedEx missed delivery dates,” quipped a drugstore manager, who said he saw a nice blip of people rushing for last-minute gifts.

Moe Alkemade, group vice president of consumables, sundries and seasonal at Walgreens, said many people dashed out for one last item — a move that often benefits drugstores. The chain’s research revealed that 97 percent of consumers made an unplanned visit for a last-minute item. To help, Walgreens offered a shopping guide, a gift finder tool accessible online or through a mobile app designed to help inspire gift ideas.

Although retailers said they were able to move the fragrance gift sets they had, they lamented a lack of new must-have products available to their channel. One retailer said her efforts to pare back, eliminating more than 30 gift sets and two previous vendors, helped push her sell-through up 20 percent.

In color cosmetics, there was a nice blip in nail color, which buyers said they hadn’t seen since the summer. Other categories singled out as providing some sales lifts were appliances such as power cleansers, artificial eye lashes, red lipsticks and certain color gift sets.

“If there was something unique in a gift set such as good colors or instructions on how to use it, we sold it,” said a buyer for a discount chain.

At E.l.f., gift sets priced at $3, $5 and $10 sold well, including a nail cube brought back after a strong debut in 2012, Haynes noted.

To help offset relying on slashing prices, Markwins Beauty Products emphasized exclusives and tying in products to retailer rewards programs such as CVS ExtraCare. Surprisingly, said Eric Weeks, vice president of sales at Markwins, one of his firm’s briskest sellers was a $30 beauty palette under the Fergie franchise called Jet Set.

Once again, the beauty category was battered somewhat by competition from other categories. Mass merchants pointed to gains in jewelry and electronics.

“It doesn’t look like it was a big beauty business except maybe in electronics [devices]. There wasn’t much beauty and fragrance advertising on TV either,” said industry consultant Allan Mottus. “It was an e-commerce Christmas, where Wal-Mart and Amazon slugged it out, making most categories commodities.”