NEW YORK — The mass market cosmetics world grew up on the shoulders of Revlon and Max Factor.
This story first appeared in the November 8, 2002 issue of WWD. Subscribe Today.
Twenty-five years ago, today’s other leading players — Cover Girl and Maybelline — were limited to spinning racks while the big players had upscale counters. Almay was a niche brand. L’Oréal had yet to get its first big U.S. push — that came in the early Eighties. Neutrogena color did not exist.
Revlon owner Charles Revson had been a force to reckon with. At the time of his death in 1975, Revlon controlled about 50 percent of the drugstore cosmetics sales with Max Factor at 25 percent, recalled Allan Mottus, industry consultant.
“When anybody tried to extend their brands, he [Revson] would line them up and nail them to the wall,” Mottus said. At the time, “the mass business was basically drugstores and Penney’s and Sears. It was not a broad-based business.”
Mass merchandisers have evolved out of the variety store business. And drugstores, dominated by family-owned firms, consolidated into the handful of chains that control the market today. “In those days, independents had a 60 percent share of drugstore sales,” said Roy White, vice president of education for the General Merchandise Distributors Council and a former editor of a drugstore publication. Most of those independents sold brands now only found in department stores such as Elizabeth Arden.
Supermarkets only started adding cosmetics some 20 years ago, when the New Jersey-based Pathmark chain acquired a drugstore company and successfully expanded health and beauty through all its stores.
“It was the development of the distribution system,” noted Suzanne Grayson, president of Grayson Associates, who had worked at Revlon and Max Factor, “that forced marketers to change their way of merchandising. The wall and planograms did not exist then.”
While Revlon was the powerhouse, it was Noxell’s Cover Girl that set the stage for the look of the mass color department today. Although most stores had added pegged walls by the end of the Seventies (instead of glass counters), most of the walls were generic fixtures — not supplied by vendors. Those fixtures started appearing just before the Eighties with the advent of the Noxell black fixture.
“Cover Girl changed the rules in the early Eighties,” Mottus added. “That was an enormous and risky move. The big thing is that it went from two company protagonists to a much broader thing.” It was during this period that department stores started walking away from Revlon and it became exclusively a mass entity.
“It was a very significant thing,” Grayson commented. “That was called self-service.”
Just 25 years ago, most beauty departments still had either a cosmetician or a sales clerk. “Today you are pressed to find service, back then there were girls trained by cosmetics schools,” recalled Jeanette Solomon, a former buyer at K&B with more than 30 years of experience. Revlon and Max Factor trained beauty advisers on their products. Those schools were phased out when it got too expensive for retailers to pay for employees to get trained while hiring other staffers to oversee their shifts.
“In the late 1970s, the wall was dominated by Revlon, Max Factor and even Clairol, which had some cosmetics,” Solomon said. At that time, Maybelline and Cover Girl were considered “budget” lines, she added. “Today, nothing in the drugstore is truly budget,” Solomon said.
The early success of drugstore retailing created a problem —too many brands. “There were just so many launching one on top of the other,” Solomon said. She cited Clarion as an example of a brand that didn’t make it at a time when there were perhaps too many choices. One category where there used to be fewer choices was hair color. “It was L’Oréal, Clairol and Roux,” Solomon said. “Now there’s Revlon and even Maybelline. It is very confusing with all the choices and the forms…temporary, kind of temporary and so on.”
John Wendt, executive vice president of public affairs for L’Oréal and former president of Maybelline, said the biggest change he sees in the industry is “one of technology.”
The industry, he said, “used to be color and paint. It went from being shade-oriented to being one of technological superiority and consumers are smart enough to know that while color is important, they are more discerning in regard to quality.”
William McMenemy, executive vice president, marketing for Del Laboratories, said the “biggest issue of all has been the consolidation. People talk about it like it is something that happened just recently. To a degree that is true, but it has been going on for the past 25 years. Players on both the manufacture and retailer side have shrunk.”
He added, “We used to have a lot more competitors and a lot more customers.”
Also different today is the availability of scan data. “Twenty to 25 years ago, retailers didn’t have the ability to collect data themselves, so they didn’t know their own numbers. We [manufacturers] would provide them with the shipment information and also analyze it. The information we have today and take for granted just didn’t exist.”
Over the years, brands have evolved from having strength in a single category to being more broad-based, McMenemy noted. Maybelline had a strength in eyes, Cover Girl in foundation, for example, and now they are full lines.
When L’Oréal entered the mass world, the company started with only lip and nail, buyers recalled. “At the beginning, it was too French,” one source said. “They had a great deal of trial and error before getting it right. Now look at all of the L’Oréal items in the store.”
It was also a time in the industry when the marketer was in control. “When Revlon was in its heyday, it had automatic shipments with accounts because its programming was driving products so quickly. People [retailers] were signed up for this deal,” Suzanne Grayson reminisced.
Another major shift in the Seventies was moving fragrances to glass cases. “The pilferage was just too high,” Solomon of K&B recalled. “One salesman told me that would wreck his business — he didn’t care that most of it was being stolen.” Today the trend has come full circle with retailers seeking ways to bring scents out from under glass. The difference this time — clamshell cases with anti-theft devices.
“In the Seventies, fragrance was becoming very important to drugstores,” recalled Annette Green, president of the Fragrance Foundation. Revlon, Max Factor, Faberge, Houbigant and Mem were all launching fragrances. Before that, a lot of inexpensive fragrances were sold in the 5- and 10-cent stores. “The drugstores and chains were happy to have a new category,” Green said. “They couldn’t get their hands on the Chanel or L’Air du Temps.” Today, Coty dominates mass fragrance.
As the years progressed, drugstores found they had more and more competition for the mass beauty shopper. “It used to be only drugstores, but now grocery stores and discount stores have aisles and aisles of cosmetics,” Solomon said. That’s eroded the share drugstores have of the beauty pie. Drugstores once had more than 65 percent of sales — now discounters and drugstores each have about 40 percent. “Competitors have outdone drugstores at their own game,” Allan Mottus said.
There’s one thing that never changes for all retailers — the space squeeze. It is still a challenge fitting in new items, according to Judy Wray who has held posts at many drug chains including Peoples, Eckerd, Revco and now Rite Aid. Added Solomon, “Yeah, they never did invent a shelf stretcher.”
And to those involved then and now, it feels more competitive.
“When I was at Revlon we got reports on Max Factor. When I was at Max Factor, we got reports on Revlon. It was very competitive, but there were only two players. Now there are four or five who are very competitive. What has made it more competitive is the singular concept that all products are very good. The technology available to all of them,” Grayson said. “We thought it was competitive then. We knew nothing!”
“I think it is more difficult today [to break into the business] because of the resources you need,” Del’s McMenemy said. “Now when you deal with retailers, you are not just dealing with regional chains but with gigantic corporations. Just doing business on a day-to-day basis, it requires more resources, both financial and technical.”
Grayson agreed. “Because the market has become so big, it is extremely expensive to launch products and they have to have broad appeal,” she said. “Revlon used to do promotions of sizzle type products just for image. Those are the kinds of things you can’t do anymore.”
“The industry was probably more fun then, but it is probably more exciting now because the opportunities are bigger and things move faster,” summed up McMenemy.
“What is missing today is the ego — the personal ego,” Grayson said. “It is the financial thing. It is all about the price of the stock. At Revlon, we spent just as much time redoing existing top selling products as new products. Charles [Revson] had to best everyone.”