Faced with often brutal price competition and with margins suffering, the German beauty market is actively searching for new ways to shake the nation’s consumers out of their bargain-hunting fervor.
As evidenced at Beauty World, the four-day trade fair that closed here March 8, manufacturers are hoping to emphasize special events, niche products and services, instead of just special or discount offers in the year ahead. Cosmopolitan Cosmetics, one of the few big fragrance houses showing in Frankfurt, used the fair as a teaser platform for its Max Mara joint venture fragrance to be launched later this year.
There was not a bottle of the new scent to be seen, let alone a sample of the juice. Instead, Cosmopolitan staged a Max Mara fashion show, and retailers could fill out postcards, which would ensure them more detailed information about the new fragrance closer to the launch date.
“People see so many products, and we wanted to show them that fragrance is also about fashion. It’s lifestyle,” said managing director Jurgen Vater.
“The industry needs a bit of entertainment, and the perfumeries also need to find a way to entice consumers into their stores. They don’t go into a perfumery on the weekend to see 4,000 perfumes, but rather to see what’s new or get advice — all things that have nothing to do with price.” Vater also pointed to the German market’s price sensibility as one of its biggest problems at the moment. “The price marketing is extreme, and it’s not specific to fragrance or beauty. You see it in travel, housewares — Germany has become an endless bargain paradise.”
Frank Wittek, sales manager for Clarins Germany, agreed. “The German end consumer has become very price- oriented. It’s different than in England, where it’s service that counts, or in Benelux, where the focus is on quality. In Germany, it’s only price. People want to get almost everything for 9.99 [euros, $12.39 at current exchange], which of course is impossible. So there’s a lot of pressure on margins, which are declining,” he said.But you can’t give up on a market the size of Germany, he quickly added. Clarins is trying to buck the trend with interesting new products, special offers like gifts-with-purchase or co-op event marketing. “Invite consumers to the perfumery, treat them with champagne, entertain them with a magician or whatever,” said Wittek. “Perfumeries must be more than bottles on a shelf. You sell beautiful illusions when you sell fragrance. Beauty is a dream game.”
“We need new fun things, not just the norm,” stated Thomas Schnitzler, managing partner of Nobilis, Germany’s largest independent perfume distributor and a leader in so-called niche scents. With fun in mind, Nobilis set up miniskirt-clad girls spraying the new FCUK fragrance in the fair’s entry halls, whereas the company’s stand was more oriented to its premium and core businesses.
“We started the premium concept, targeted at 100 to 120 high-quality perfumery doors in Germany, five years ago. We wanted to tell the consumer that they could go to a perfumery and find something not to be found elsewhere. But it’s so sad that [the concept] is being diluted by some makers,” said Schnitzler.
What needs to change in the German fragrance market? “The fun has to come back,” he responded. “And from the trade side, the recognition that stores shouldn’t carry everything. Out of 1,500 retailers, we have maybe 20 that carry our entire assortment.”
The fair in itself took on something of a niche character, due to the absence of the major international producers. For the first time, Beauty World ran concurrently with Lifetime (for the professional spa and wellness industry), Passione (personal accessories) and Cosmetica (for cosmetic institutes and beauty salons), as opposed to the consumer goods fairs Paper World and Christmas World in January. While the new, modern halls were lauded, the prestige sector lacked critical mass in terms of key brands present, and the positioning often left something to be desired. “It’s not good for someone making toothpaste to be placed next to a prestige fragrance,” a top executive remarked.
Exhibitors also generally complained about light traffic. “The customers aren’t here to see,” said the sales manager of a leading European skin care brand. Over at the American pavilion, Jim Bellm, vice president of sales for mass merchandiser Belcam, said, “the majority of people are very dissatisfied. We’ve been one of the lucky ones. We saw Wal-Mart Germany and Target Australia, but the show’s been very slow. At the ICRM in Barcelona, we saw 55 retailers in two days, and that’s much more productive than standing here and talking to people in the booth next door.”Nevertheless, the Frankfurt Fair reported that 23,000 trade visitors had attended the joint fairs. Comparable attendance figures were not available, as this was the first time the fairs were held in this configuration.
Regardless of the fair’s unorthodox mix, one trend that couldn’t be missed was the rise of natural-oriented skin care products for both perfumerie and salon sales.
“We’re normally at shows oriented to salons, but we thought as the fairs are [now] united, Beauty World could be an entree for us with the perfumeries,” said Decleor’s brand manager Carey Pepper.
“At first, we thought it would be good to be surrounded by big brands, but as the big brands aren’t here, we find the perfumeries are interested in us,” he reported. Decleor is distributed by Shiseido in Germany, and the aroma-cosmetics specialist has been growing its German business at a steady double-digit pace, “though we started at a low level,” he acknowledged.
There was also a separate Nature Cosmetics area housing brands like Dr. Hauschka and Santa Verde, plus the fair featured newcomers like the H2O live from South Africa. Although oil and water presumably don’t mix, the hydro skin therapy range blends pure mineral water, extracts from the fruit of the olive tree and/or extra virgin cold-pressed olive oil.
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