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NEW YORK — Teens and their love of social media are driving changes to the beauty assortment in the mass market.
This story first appeared in the March 29, 2013 issue of WWD. Subscribe Today.
Small beauty companies are increasingly grabbing the attention of younger consumers by using online marketing vehicles, a move that allows them to better compete with major powerhouses.
“Social media enables brands that are more relevant [to shoppers] to do well rather than if you just spend millions,” said Joey Shamah, the cofounder of E.L.F. Cosmetics, which test-markets products on its Web site before rolling them out to retail. “Spending millions doesn’t make you relevant,” he said. E.L.F. Cosmetics, which launched on the Internet, now commands end caps at Target.
Retailers said shoppers are asking for more value items and smaller brands that have gained awareness via social media. Rite Aid has responded by carving out a four-foot section for the YouTube-fueled cosmetics brand Jesse’s Girl, and allotting promotional space to Pretty Woman, a niche line with products such as a textured nail finish called Pearl Nails.
Walgreens’ push in alternative designer fragrances is from InStyle, a niche company that is one of the top mass fragrance companies, according to women’s fragrance rankings from Symphony IRI Group.
Younger consumers, weaned on turning to the Web for information, are credited with helping drive a 3.44 percent increase in facial cosmetics sales and an astounding 17.46 percent rise in nail volume for the 52-week period ended Dec. 30, 2012, according to IRI. The NPD Group Inc. noticed an uptick in teen spending last summer after a period of stabilization: Teens were shelling out an average of $12.50 last July, up $1.50 from the same month tracked in 2009.
Make no mistake, products from L’Oréal, Cover Girl, Revlon and Maybelline continue to hold the top-selling spots in all color cosmetics categories, according to IRI. To the big players’ credit, they responded to the teen frenzy too, as evidenced by Procter & Gamble Co.’s launch of Olay Fresh Effects, Maybelline Eye Studio Color Tattoo 24HR Cream Gel Shadow and Revlon Nail Art Moon Candy.
But smaller, nimble brands with an online presence are increasingly piquing consumers’ interest.
“We have people coming in asking for a brand they saw on YouTube, Pinterest or Instagram,” said a buyer for a drugstore chain who asked not to be named. “We have to at least look into those brands.” A brand’s most difficult challenge three years ago was to get a store test. Now the consumer is in charge, asking retailers for brands they want. “These [social media] outlets create pent-up demand,” said Shamah.
Allen Ash, vice president of Almar Sales Company, a marketer of value beauty products, agreed that younger consumers learn about products from other avenues. “They are savvy, so ads don’t impress them as much and they also like to buy at prices they feel comfortable with or that their parents are willing to spend.”
“They aren’t reading newspapers, and they forward through commercials online or on DVRs,” said David Pina, vice president creative director for InStyle Product Group.
Instead of directing whatever funds he can into advertising, Jesse’s Girl president Jesse Lawrence invites bloggers to his headquarters to shoot videos that are triggered on QR codes so girls can see how to use the products.
In addition to social media, celebrities also sway young women’s spending habits. That helps explains why Burt’s Bees tapped singer Carly Rae Jepsen to front Güd’s new Red Ruby Groovy products, and [Heart] Calgon’s decision have actress Sarah Hyland represent the youth-oriented bath and body line. Similarly, Wet ‘n’ Wild got a huge boost from its ties with Fergie. And just this week, Kiss Products named teen actress Alli Simpson as its brand ambassador for imPRESS nails.
The Internet is creating cyber celebrities, as well. Lawrence teamed up with Julie Gutierrez, a video blogger with more than 100,000 followers, for a nail line called JulieG, which is sold exclusively at Rite Aid. Her video introducing new Frosted Gum Drops polish has more than 50,000 views to date. Lawrence said JulieG is one of the top-selling nail brands at Rite Aid.
Lessons have been learned about how to market to teens without being tacky. “We are trying to do colors and trend merchandise that is high-end and not gimmicky like the cell phones [of years ago] where you opened them and saw the colors,” said Lawrence, referring to teen products in years past.
Another case in point is Jackie Fame/Fame Body, a brand created by two brothers who launched their own Web site when their parents wouldn’t allow them on Facebook. The company said it is in talks with four big retailers for its line of personal care products promoted on the site.
While online drives shoppers to unknown brands, the economy is doing its share, too. “Consumers are making do with less, and that includes buying lower-priced cosmetics,” said industry observer Allan Mottus.
Charles Yu, vice president of sales for Beauty 21, said lower-priced cosmetics not only keep consumers coming to stores but also have the potential to build multiple sales. “Consumers want affordable products that allow them to enter categories they haven’t tried before. It affords them the chance to experiment with different palettes. They also pick up multiple shades. People are more budget conscious with their hard-earned money.”