What Role Should Beauty Play in the Mass Market?

Fifteen years ago, most women had two choices for purchasing cosmetics. There was a corner drugstore or the mall department store.

Times have changed. Drugstore chains merged creating larger but fewer nameplates. Discounters added more cosmetics as did food stores. Specialty retailers, like Sephora and Ulta, emerged with a whole new way to get beauty. Layering onto that was the growth of direct marketing in the form of home shopping and e-commerce. The pie was further divided. Most drugstore beauty departments started to look the same.

As an avenue to attract more consumers, drug chains tried upscale products to distinguish their offering from the competition. Over the past four years, drug chains have added more dermatology-focused beauty counters, upscale brands and even opened separate divisions such as CVS Beauty 360. The goal was to prove to the prestige beauty industry that shoppers are in charge and will shop where they want to shop and if the environment is right, prestige brands should open the distribution pipeline.

What was hoped would be a flood, however, turned into a trickle. To date, few monster premium brands have agreed to turn on the spigot. The reason cited was to protect the department store distribution, which up until the last year seemed stalled, but now is showing growth once again. The patience displayed in not jumping ship may have paid off. In 2011, total U.S. prestige beauty generated $9.5 billion, an increase of 11 percent in dollars, compared to $8.6 billion in 2010, said recent NPD data.  In addition, the outstanding dollar results were achieved with all beauty categories surpassing pre-recession levels.

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“In the 15 years that NPD has been tracking the prestige beauty industry, we have never seen growth like this — especially across all categories,” said Karen Grant, vice president and senior global industry analyst, The NPD Group. It wasn’t a lack of trying that didn’t net non department stores the key brands. Beauty 360 stores are absolutely beautiful and a shock to many consumers when they learn they are part of a drugstore chain. Duane Reade and Walgreens’ Look Boutiques cause consumers’ jaws to drop as they enter. So why did CVS announce it is closing its Beauty 360 stores? Why are so many eyes on Look Boutique trying to determine if the move pays off?

Timing is perhaps the biggest obstacle for mass merchants looking to upgrade. “Timing is everything and Beauty 360 timing was bad,” said one executive. Indeed, just after the debut, the economy turned sour. To make matters worse, as women started returning to stores in the last year, many discovered they could do more with less and didn’t need some of the premium offers. Topping it off for CVS, the brands coveted did not open the gates.

So what now? Industry consultant Allan Mottus predicted CVS would reduce its focus on beauty and build up its pharmacy further. CVS doesn’t show indications of that, however, with the company citing its booming beauty loyalty program and the buoyancy of its Nuance brand as reasons why beauty is still at the forefront. Furthermore, CVS suggested it would use what it learned with Beauty 360 in traditional stores.

Some think the format of Look Boutique will stand the test of time. Instead of banking on big department store brands. Walgreens and Duane Reade’s team travel the world looking for unique brands such as Minus 417, a Dead Sea line. Some industry experts think this will pay off. “If they focus on building unique brands like Sephora has, it will work,” said one supplier. 

Others think the spark of Walgreens’ Joe Magnacca (who helped created Look) will also result in Look’s success. “He’s a merchant and he gives the customers what they want,” said one industry source. Giving the customers what they want may be the decisive factor in how deeply chains dive into beauty. As retailers discover their core customer, they’ll adapt the beauty to what they need to meet them. In the case of Beauty 360, shoppers found enough other outlets for the same brands. The future could hold each drug chain having a very different approach to beauty and shoppers will seek out the one that is a match for them.

Recent numbers prove beauty has a place in drugstores. For the 52-week period, ended January 22, 2012, facial cosmetics rose 4.5 percent, eye was up 4.3 percent, nail rose 22.5 percent and accessories 17.6 percent. The gains outstripped most other front-end categories. So whether they want traditional mass or better products, the drug channel does have traffic.

People, Places and Things

With a study last week suggesting women are returning to salon services, it was a good time to catch up with gloProfessional, a line that is using skin care expertise to extend into hair care. WWDBeautyNews chatted with Lisa Bookman, sales and marketing manager for gloProfessional.

WWDBeautyNews: How has expertise in skin care been translated into hair?
Bookman:
gloProfessional is a company dedicated to providing our customers with high-performance products containing beneficial and nourishing ingredients that promote healthy skin and protect it from harsh environmental factors, which are all important to our skin care routine. The same goes for our hair care. Our goal when developing the gloessentials hair care line was to create products that uphold the same integrity of ingredients and performance as our glo therapeutics skin care and glo minerals cosmetic lines. Our mission is to provide a complete systematic line of hair care to enhance and maintain healthy, beautiful hair from scalp to tip with high quality, advanced ingredients — just as we did for our skin care and makeup lines. We have taken the same great care with the gloessentials collection by formulating it with antioxidants, natural botanical extracts and essential fatty acids. Our shampoos and conditioners are infused with an exclusive MBP (Mineral / Botanical / Peptide) Complex, which combines Jade Powder (mineral), Turmeric (botanical) and Quinoa (peptide) to protect and nourish while promoting a healthier scalp and healthier hair. The entire collection is color safe, guards against heat and harsh environmental factors and does not contain any parabens or sulfates. All products, except the Boost Hair volumizer and Dry Shampoos provides UV protection.
 
WWDBeautyNews: What will be most popular products?
Bookman:
We went to great lengths to ensure our hair care collection launched with each of product meeting a specific need, which allowed us to launch a “tight-line” with room for growth.
So far, we have seen a wonderful reaction to the entire line. Immediately out of the gate, the most popular products have been the Reparative Keratin Leave-In Treatment, Boost Hair Volumizer and the Intense Replenish Hydro-Nourish Shampoo and Conditioner. Although, the Re-energize Dry Shampoo and Infinite Shine Smoothing Oil are giving the others a run for their money!
 
WWDBeautyNews: What is THE trend in hair right now, strengthening, color preservation?
Bookman:
Color preservation is always the top of the list which is why it is important to use products that are color-safe for hair, which ours are. As far as styling, we are seeing a flurry of loose, natural-looking manes and what many are referring to as “Free and Easy Waves” or the “Get Up and Go” look. The Style Defining Cream creates texture and definition and provides easy styling while conditioning agents and vitamins promote healthy, shiny hair with a medium, touchable hold. There is also a surge of volumized-looking hair — sexy, shiny, bouncy hair — that fresh, natural look with a little bit of extra “oomph”. The Boost Hair Volumizer creates gravity-defying volume and bounce.

WWDBeautyNews: How important are natural ingredients?
Bookman:
Natural ingredients are important if they are good for the hair or skin, impart a positive influence and are efficacious. There are ingredients that are not natural but are healthy for the skin and hair. It just so happens that many ingredients that are good for the hair happen to be natural. Our hair care products are infused with an exclusive MBP (Mineral / Botanical / Peptide) Complex. The MBP Complex combines Jade Powder, Turmeric and Quinoa to protect and nourish while promoting a healthier scalp and healthier hair. 

What’s In Store

Another BB Cream Debuts:
The BB brigade continues with Dr. Brandt’s introducing its BB cream with the power of flexitone, a tone blending technology. It retails for $39.

Packaged Facts Finds Antioxidants Important:
Antioxidants are featured in a diversity of consumer packaged goods—from granola bars to vitamin shakes to detox skin care—and according to a new report from Packaged Facts reflecting a  meta-trend whereby the link between dietary supplements and actual diets is becoming ever stronger. American consumers not only approach foods and beverages from a nutritional supplementation perspective, but also have come to regard health and beauty care products as extensions of the foods they eat and the nutritional supplements they take, the report said.

 

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