Pete Unplugged

By reinforcing their core business with aspirational add-ons, savvy marketers aresatiating the thirst for new while protecting the original franchise.

Appeared In
Special Issue
Beauty Inc issue 05/20/2011

For years, the beauty industry has marched to the incessant drumbeat of newness. According to conventional wisdom, a company has to constantly launch new products in order to hold its market share and therefore its space at retail. But after a decade of raining product introductions, particularly in the fragrance market, there is talk by some marketers of a growing need for a new brand of newness— launches that echo the heartbeat of the franchise.

This story first appeared in the May 20, 2011 issue of WWD. Subscribe Today.

The familiar ring of classic names resonates louder than ever with recession-jittery consumers, or so the theory goes. Newness is as necessary a tonic as ever, but the real objective now seems to be all about offering the kind of newness that builds the core.

Manufacturers are creating new forms of the original product, more accessible prices and sizes and promotional tactics that relate to the essential values of the brand. The goal is to present something that attracts new users, but also rewards loyal customers with something different that demonstrates attributes they already appreciate.

Veronique Gabai-Pinsky, global brand president of the Aramis and Designer Fragrances Division at the Estée Lauder Cos. Inc., has built up Donna Karan’s Cashmere Mist from 11th place to fifth in the rankings by pursuing this kind of strategy. Over the years, she has offered the original fragrance in different forms. In the past, she marketed an eau de parfum. This year, a whipped perfume will be offered, as a mousse that can be sprayed on the skin. It is meant as a way of provoking fresh interest in the brand for those who already use Cashmere Mist. “We try to give them a reason to stay loyal,” says Gabai-Pinsky. “It’s the juice and the brand. My whole thing is about building the brand.”

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She notes that simply feeding the voracious appetite of the market for newness by perhaps launching a limited edition flanker is ultimately defeating, and dismisses the tactic as “diluting your message.” She adds, “In a market that is overcrowded, dilution is not the solution.”

Her formula is to “recruit, retain and revive” with advertising.

This philosophy doesn’t just pertain to fragrance; it applies to skin care and color cosmetics as well. “It’s about keeping current users and getting new users,” says Jill Scalamandre, chief marketing officer of Chrysallis, a division of Catterton Partners. While citing examples in competing color cosmetics companies, she turns to her own StriVectin antiaging skin care brand, which Scalamandre has been rehabilitating—stockkeeping unit by stockkeeping unit— and relaunching from the inside out.

Chrysallis added a subbrand to the line in late February with the introduction of a sku for sensitive skin, called Sensitive SD, as an adjunct of the core SD range. Citing research that shows 66 percent of women think of themselves as having sensitive skin, the company kept the two major ingredients of its niacindriven formula and added other elements to soothe irritated skin, often a side effect of wrinkle-fighting products. “There are two objectives,” says Scalamandre, “rewarding your current users and bringing in new users. We are very focused on building the core. It is the engine of the company.”

She adds, “With the cycle of new launches, the base of the business is not growing.” Scalamandre maintains that this strategy does not cannibalize the business, since the sales of the new item tends to be incremental. According to Chrysallis, the revitalized part of the brand has shown a 48 percent growth year to date, with 9 percent of that growth driven by the new sensitive skin sku. The company is also adding a sunscreen. In January, a 2-oz. size of the skin care, priced at $69, was offered to entice new users, who might have been repelled by the $135 price of the regular 5-oz. sku. The company also put out a 15-ml. sample size, priced at $15. It contains a three-week supply.

Scalamandre notes that “it is harder to get the attention of consumers” without mounting a stream of launches. “How do you make it new,” she asks rhetorically. The answer lies in line extension sku’s, like the sensitive skin product, smaller sizes and more affordable prices. Promotion and sampling are other powerful tools. StriVectin has addressed the Achilles’ heel of the skin care business, namely the need to implore the customer to buy and use the product diligently in the hope of one day seeing a difference. At point of sale in Toronto, the brand has installed a ModiFace virtual makeover device that is designed to show a customer what she will look like after eight weeks of using the product twice a day.

In targeting the base, it is critical to know who the consumer is, Scalamandre says, noting that StriVectin has the names of hundreds of thousands of its consumers. They are segmented into six groups. The heaviest users belong to one of two groups called the Suburban Fashionistas and Selfmade Women. “Understanding the consumer base is really critical today,” she adds. Marc Rey, president of International Designer Collections at L’Oréal USA, maintains a list of rules for those who are careful “not to kill the dream” of the fragrance business.

Among them is the commandment to keep promotional tactics pertinent to the values of the brand. “We are selling aspirational products,” he says. “The image can’t be about price and promotion.” One bright example was the Acqua for Life promotion to push Giorgio Armani’s Acqua di Giò and Acqua di Gioia. The promotion was aimed at providing 40 million liters of clean drinking water, $1 worth of water donated for every bottle of fragrance sold. “It is aspirational,” says Rey. “It’s not a big pink slash with 30 percent off.”

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