Talk about a category with buzz. Literally.
This story first appeared in the March 21, 2014 issue of WWD. Subscribe Today.
After years of fits and starts, at-home beauty devices are becoming an ever-more viable category, with players big and small looking to get a piece of the action. To wit, technology-based companies like Tria Beauty and NuFace, are looking to transform themselves into viable, multipronged beauty brands, while established cosmetics companies are actively pursuing various avenues to enter the arena, whether with class-one devices, such as cleansing tools, which don’t require FDA clearance, or class-two devices, like handheld lasers, which do.
Call it the Clarisonic effect. The sonic-powered facial cleanser has sold more than three million devices since its launch in 2004, at prices ranging from $99 to $225, and was acquired by L’Oréal in 2011. Industry sources estimate the brand has reached sales of $158 million and become the number-five brand in prestige skin care, just behind La Mer. Another source estimates the entire device market in the U.S. is currently at about $1.5 billion, a figure analysts expect to grow from 12 to 15 percent over the next few years.
“We consider it a full-fledged category,” says Carol Hamilton, president of L’Oréal Luxe USA, who declined to comment on sales figures. “The transformation has happened.”
QVC’s results bear out the numbers. In 2013, beauty devices accounted for 18 percent of total beauty sales and had the category’s largest growth rate with a 63 percent increase, according to Claudia Lucas, director of beauty merchandising at QVC. That figure is expected to increase exponentially as the activity in the market increases. This spring, for example, Tria Beauty, a pioneer in at-home laser hair removal, is launching its first antiaging device, priced at $495, while Silk’n, best known for its hair-removal tools, is introducing its most accessible device, the Flash & Go, priced at $229.
Meanwhile, Iluminage Beauty, a joint venture between Unilever and Syneron Medical, will enter the arena with a $595 antiaging laser designed by Karim Rashid and a topical skin-care range co-branded with Pond’s Institute, while Elizabeth Arden will launch a deep-cleansing device as part of its new Elizabeth Arden Rx skin-care range, which is being distributed exclusively in physician’s offices. For its part, Olay has the Microdermabrasion Plus Advanced Cleansing System, which it launched under its Pro-X banner, and Johnson & Johnson is also said to be looking at the category closely.
They’re not alone—and this is just the beginning.
“Yes,” says Scott Lyon, vice president of sales for Home Skinovations, the parent company of Silk’n, when asked if the established giants in the beauty space are looking for a joint venture, a licensing agreement or an acquisition in the devices space.
“The future of beauty is not in a jar,” says Marie-Pierre Stark-Flora, founder of the Iluminage brand and chief marketing officer of Iluminage Beauty. “The jar isn’t going away—it would be impossible to hydrate without it,” she acknowledges. “But the big progressions will most likely come from devices over the next five to 10 years, and new technologies that come to us from the medical world and other industries we haven’t even started to think about.”
“We’re just at the tip of the iceberg right now,” agrees Jennifer Sunwoo, executive vice president and general merchandise manager for women’s at Barneys New York. “As customers understand the world of electronic devices and how they can maximize their overall regime and the efficacy of their skin-care products, we see these products as having huge potential.”
Thus far, the most popular devices are in the antiaging, antiacne, hair removal, hair growth and cleansing realms. The sweet spot in terms of price point is $500 and below, and consumers have become very clear in their performance expectations. “The customer is wary about price points. You’ve got to look at the what the saving is relative to the in-office version of the procedure and what the results are,” says Space NK founder Nicky Kinnaird. “The amount of time and dedication that is needed to produce results is important. If something is unwieldy and time consuming and requires a lot of treatments because it isn’t the same strength as an in-office procedure, the customer isn’t inclined to take it up.”
Innovation and newness are as much drivers for devices as they are in other beauty categories. So in an arena where upgrades in technology are both time consuming and costly—Kevin Appelbaum, chief executive of Tria Beauty, estimates the process of going through FDA approval costs between $5 million and $10 million—device companies are increasingly looking to expand their scope with topical products, from cleansers to sophisticated antiaging serums. Retailers say such a move is easier said then done, even for a powerhouse like Clarisonic. “That’s the million-dollar question,” says Priya Venkatesh, vice president and divisional merchandise manager of skin and hair care at Sephora. “In general, I haven’t seen too many brands in beauty cross categories very well.
“You can do one thing and be exceptionally good at that, but if you try to do everything, no customer buys that,” she continues. “They want to cherry pick. They’re in charge and there’s no debating that.”
Over at QVC, it’s a similar situation. “Topicals have been challenging,” agrees Lucas. “Consumers buy into the authenticity and authority when it comes to the device, but when we pair the brands with topicals, they don’t believe there is the same credibility.”
What’s working for both retailers is pairing best-of-class devices with a curated selection of topicals from traditional firms, not always the most palatable solution for a brand. NuFace, however, which does have its own line of skin-care products, has executed successful co-branding events with Perricone MD Skin Care at Nordstrom and Natura Bissé at Neiman Marcus, combining devices and products for facial services in in-store treatment cabines. “You have to educate the consumer on the science and technology and how to use the device,” says Tera Valdez, cofounder and chief operating officer of NuFace. “You have to be able to sift through the static in the marketplace, so we love to partner with existing brands to show the consumer how we can enhance their existing antiaging regimen.”
Education has proven to be the key to closing the sale in this category, a dynamic that has resulted in the bulk of sales being done online at the moment. “This business is a big strength for us online,” says Venkatesh, who notes e-commerce is where the category’s growth is coming from at Sephora. “Online, the customer is able to see a video, read reviews and watch a demonstration—this is a considered purchase.”
Venkatesh believes this to be a phenomenon which will have a ripple effect across beauty. “It will make brands more savvy about the right balance of marketing and education in a digitally savvy way,” she says. “What a lot of brands tend to do is market, market, market, and that’s just advertising. What this category will teach the rest of beauty is that there is a lot of merit in giving someone instructional content in how to use something and what to expect without overpromising. They’ve reached the balance between marketing and setting expectations through education.”