EVIAN, France — The consumer has taken control.So concluded a panel of beauty industry executives representing retail, manufacturing and consulting firms at the WWD CEO Beauty Summit here in June.Maybe there had been a time when manufacturers steered the industry with marketing prowess and brands. Then, conventional wisdom held that retailers prevailed in the marketplace with their real estate control and efficient distribution systems. But, as noted by Marc Pritchard, vice president, global cosmetics and personal care at Procter and Gamble, a recent study found that 66 percent of women said they would walk out of a store if they got bad service, even if it has the product they want. "The consumer is empowered; the consumer in is charge," suggested Pritchard, who moderated the one and a half hour panel discussion on what it will take to bond with this new educated and demanding shopper. "Her expectations are growing."Pritchard is convinced that the $60 billion global beauty industry could expand further "if we focus on the desires of consumers across the world."Several suggestions were offered on how to respond to the new consumer values from redefining service to the opening of distribution channels to the simplifying of product offerings to make shopping easier.Women are cross-shopping and they are becoming less brand loyal, agreed the panelists. During a recent trip to Moscow, Pritchard interviewed one woman whose broad beauty stock included items from Lancôme, Black Opal, Avon and Rimmel. "There is cross-shopping even in developing countries," he pointed out. Consumers are also becoming more comfortable with buying unfamiliar brands. In one recent study, 50 percentof consumers said they were willing to buy unfamiliar brands, according to Pritchard.Beth Pritchard, president and chief executive officer of Bath and Body Works, (no relation to Marc Pritchard) said that brand loyalty "has to be earned. You have to make that emotional connection between customer and brand." In BBW stores, customers are treated to a hand massage. "Remember," stressed Beth Pritchard, "shopping is fun; it is not a necessity. You have to entertain the customer."In some newer stores, BBW is offering spa treatments, not as a profit center, but as a service to expose customers to its new spa treatment products, she explained.At Selfridges, said Claudia Lucas, head buyer, beauty, for the U.K.-based department store, "women want choice." She explained that her shoppers are more willing to experiment and "are looking for brands that are not mainstream." At present the retailer sticks to premium offerings keeping in sync with its overall store presentation."We have some things in the store that are not there to generate cash but to add to the experience of the buy," commented Lucas on the importance of service. She pointed to its integrated nail bar as an example. The store also held a Bollywood event honoring the Indian film industry to draw and entertain consumers.Timra Carlson, vice president, NPD BeautyTrends, noted that 69 percent of beauty shoppers buy beauty while they are out shopping in stores for other things. "Women and men today have less planned purchases," she said, adding, "If the consumer is unhappy, it is a loss for that department as well as another department. Retailers really need to look at themselves as brands."In mass stores, the shopping experience needs to be made easier, said P&G’s Pritchard, who noted that P&G has been using interactive computer technology to aid in shade selection and also to guide women to the right skin treatment items.Patricia Fuchs-Wenzlau, director and chief executive officer of European Forecasts, said that the industry should ease up on imitation products. "Show the courage to do the unexpected," she instructed. "The flipside of that is ‘show the courage not to change and not run with a trend.’ When you know you have something good stick with it and stay with it."The industry will benefit most, concluded Pritchard, when retailers and manufacturers jointly focus on the consumer.Pritchard recalled his early resistance to a mass store movement toward universal fixtures, which replace manufacturer- supplied displays. But the joint effort between retailer and manufacturer to create a new look has been rewarded with sales increases.Shashi Batra, senior vice president ofmerchandising at Sephora USA, remarked that there were challenges too when open sell came into the prestige market in the U.S. "It was a huge learning experience for retailer and manufacturer. After a lot of pain and resources, the communication at point of sale, whether the person is assisted or not, is ultimately going to drive the success of that product," said Batra. "We have totally underestimated the power of merchandising."Hilary Dart, president of Calvin Klein Cosmetics cautioned that "we have to be careful that mass practices at retail don’t become the norm, the method. We have to make sure that it doesn’t distort the brand image."People shop the department store because they have an expectation of service. To take the mass approach, it could lower the expectation of the consumer and drive her away from the store. You have to have the merging of methods."The most direct challenge of the retail status quo bubbled forth from an audience member. "Why does there have to be a difference between prestige and mass? I don’t understand why the brands can’t sell in both."Dart responded, "The U.S. market tends not to offer a go between in the retail environment. [In the U.K.] Boots the Chemist does a really good job selling prestige and mass brands under one roof."I think if there is going to be a new move on the part of retailing in the U.S. it has to be quite a brave move, not just more of the same." Below are 10 suggestions from the panel to help the industry connect with the modern consumer.Balance the selection of new products and classics.Explore new channels of distribution.Manufacturers and retailers should partner to improve merchandising.Redefine customer service.Develop category-management programs for all retail formats.Better define and target your consumer.Sell brands in both prestige and mass environments.Distort efforts toward the biggest- selling products to draw customers.Simplify product offerings to improve the shopping experience.Keep product and retail marketing ideas fresh."
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