The most influential figures in the men’s grooming industry came together in late October to discuss the state of the business during a roundtable organized by WWD Beauty Biz.
This story first appeared in the December 11, 2009 issue of WWD. Subscribe Today.
Executives from L’Oréal, Procter & Gamble, Unilever, the Estée Lauder Cos. Inc. and Beiersdorf discussed strengths and weaknesses in the grooming market and areas that can be improved. They pulled no punches when talking about the fiercely competitive nature of the business, but also complimented successes by their cross-table competitors. At the end, each peered into the crystal ball and predicted how the men’s business might evolve and where untapped potential exists.
WWD: How would you characterize the men’s business today? What are the strengths and the challenges?
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Stephane de la Faverie: We are going through a very difficult time. The men’s market is suffering the same way the women’s market is. One of the things that’s happening is that the market is becoming more promotional. People are looking for more value. There are different ways of reacting to that. You can just follow and give them more gift sets and more discounts or you try to bring something that is more interesting to the customer.
Ultimately, the customer is looking for value, but is still looking for a strong engagement from the brand. At Armani, for many years we have played in promotions, but not as much as some other brands. We have to rectify that carefully, but not in a way that’s going to be detrimental to the brand.
The biggest challenge that we have is finding the right level of promotion and the right promotion itself—what is the value? What is the offer?—to be able to answer the customer’s needs without hurting the brand and becoming unprofitable. Because that’s the problem: The more we get promotional, the less profitable we’ll become, ultimately.
Diana Espino-Gitlin: I find challenges to be the retail environment. The clutter of department stores is difficult enough for women, let alone for men. We’ve seen success in Asia, where we’ve been able to build cathedrals, or areas where men are less vulnerable feeling in the environment. Bloomingdale’s has tried to build an area to make men feel more comfortable, but that’s a big challenge yet.
Mike Dwyer: It’s an interesting time because on one hand, we have the economic situation and the uncertainty that comes with that. On the other, we have for the first time distinctive signs of consumers now [being] attracted to the category on a broader basis. It’s starting, from the social standpoint, to become more acceptable to be caring about yourself. We also have a lot of competition. Everyone here is quite interested in this category and the opportunities it presents. What we’re seeing is the long-term opportunity this gives for real growth and we’re quite excited about it.
Espino-Gitlin: There’s a cultural shift. Men are more comfortable in using products, and what we try to do is talk to men directly, in ways that they feel comfortable—problem-solution, what the end result is going to be. That’s an opportunity.
Charles “Chip” Bergh: I agree. There’s no question that the economic environment has posed a lot of challenges for all of us, but the strong brands are getting stronger, and it’s a great time and a great opportunity to be investing in and building brands. It’s something that’s starting to happen at different speeds in different parts of the world. But it is a great opportunity for all of us because it’s a market that’s going to continue to grow.
The one thing that we’ve seen, particularly in blades and razors, is that guys are very value conscious—and value does not necessarily mean the cheapest thing on the market—but they need to be convinced of the value, even of premium brands. The premium part of our business is still the best chunk of our men’s business.
The market is still growing on a global basis. So, as dire as the economy seems to be, by properly investing in brands, continuing to drive innovation, continuing to connect with consumers and looking for ways to accelerate growth of the total male grooming space, lies a real opportunity ahead.
Nicolas Maurer: There is a great opportunity to continue to create noise around the men’s category. We see different dynamics across the different segments. The shaving preps where we are is pretty flat. Face care is a bit of a challenge because in mass, the face care proposition and the number of players is still limited and we need to create this noise. We’ve invested in the brand for many, many years. We’re kind of feeling a little bit alone in that space. We’ve been pursuing activities around extending our offering to segments such as body washes, and that is very dynamic.
One of the lessons is there are plenty of opportunities to get men. That said, we can’t sell them a regimen of six different products. You have to have a broad offering. What they tell us is even if they think they are very involved, even a bar of soap is for them a characterization of being involved in taking care of themselves.
WWD: So a bar of soap could be a beauty product for a guy?
Maurer: It is. There is a tremendous opportunity in the U.S. market to continue to change behavior, even if there is progress, to continue to make the use of skin care products more acceptable. There is still a big difference between Europe and the U.S.
Dwyer: That’s an important point, in that in the early 2000s there was a bit of a metrosexual revolution and we thought the way guys were treating themselves might change and become much more female-like as far as their hair regime. Really, that hasn’t manifested out. What we’re seeing is that the real win feels like, how do we bifurcate around male and female within categories that have traditionally been unisex or female driven? Personal cleansing and hair are good examples. If you’re a guy and you’re looking through those categories now, you’re probably looking at a female offering or unisex. Knowing how guys interact with this category and knowing that they’re driven quite a bit by their passion points—how do we help drive that? The big opportunity is continuing to move down that [road].
Bergh: Different categories have genderized at different speeds. It’s so clear that when a category genderizes, everybody wins. The retailer wins and the manufacturers win. Antiperspirant and deodorant was probably the first category that really did it. Now there are very few unisex brands left and it’s pretty much completely genderized. Hair care is just starting to genderize. It’s a huge category, but it may take a lot longer. Look at the hair around the room on our heads—there’s not a lot there.
WWD: What’s on deck, realistically? Is skin care for men a pipe dream?
Bergh: It’s real. In China, in the next 12 months or so, skin care for men is going to be bigger than blades and razors. There’s not a lot of facial hair in China, so that’s part of it. But on a dollar basis, it’s huge and it’s going to continue to grow. But there are a lot of cultural differences. In Europe, the skin care market for men is still bigger than it is in the U.S. But it’s going to come. Guys are going to wake up and realize they’ve got to start putting UV [protection] on their face.
de la Faverie: They’re going to wake up. The big difference, coming from Europe and having lived here also, is that Europe is much more advanced because of the retail space that is dedicated to it. Sometimes it’s just about: How much space do you dedicate and how much do you want to educate the male customer? We don’t educate in the U.S. as well as we do in Europe.
WWD: Let’s talk about the cathedral space at retail that Diana referred to. In both the mass and prestige markets, is part of the problem that there isn’t enough space?
de la Faverie: When you look at what Europe has developed—all of the department stores that are dedicated to men’s—and the way we are treating it here, we are far from that yet. It’s a question of putting the resources behind it and educating as an industry the retailers and the suppliers. You need to create a space where men are comfortable going because they don’t want to go to the women’s department. They want to be talked to in their own environment.
WWD: Do men want to go to a department store, period?
Espino-Gitlin: They do, because they go with their women or they may go for something else. But the business could grow if it wasn’t part of fragrances, because they’re so exposed. What Clinique Skin Supplies for Men does so well is direct the business more to women buying for men. At Lab Series, we talk to men directly. But the challenge is how to service them in these environments, whereas in Asia, we do very well because we can cater to them.
Bergh: We just recently acquired two prestige male brands, The Art of Shaving and Zirh. We also see it as a huge opportunity. There are prestige male consumers who are incredibly underserved. It drives me crazy—I go into Bloomingdale’s and guys are walking out with a $1,200 suit, they may stop and buy a $100 fragrance and then they walk out the door, bang a left and go into Duane Reade and spend $10 for a Fusion razor and $3 for a can of shave prep. Those are guys who could easily be spending $200 at The Art of Shaving in that same Bloomingdale’s. Retailers are starting to recognize that there is an underserved male prestige consumer who wants more than just fine fragrance.
Espino-Gitlin: Online is my number-one door in the world, and these customers feel comfortable. We just redid our Web site to bring in more lifestyle, to be more interactive, so we can engage them in a different way. The interest is there, but the area is not here in the U.S.
Maurer: In mass, the challenge is that when we launched men’s products in 2001—the metrosexual trend started. So there was suddenly a huge amount of support that came from the retail world. They said, “We have to find an opportunity to capitalize on this trend.” We’re now back to the normal metrics that the retail world applies, and how we’ve seen the men’s business grow in mass is it’s never exploded. It’s always been steady growth, but it’s never been immediately a tremendous explosion of the category. We’re going to have to continue to work with retailers to ask them to be more patient and potentially apply different metrics. The conversion is just taking longer.
Dwyer: The analogy we use is: “You have to walk before you can run.” Although guys are more open because it’s socially more acceptable to care for themselves, we’re still in the categories they use on a regular basis. So, for example, personal wash still has low male usage. Hair had almost no male usage until this past year when there were male-specific brands. The real opportunity and probably the right way to build this market is to get guys engaged in the categories that they currently are purchasing, then graduate them up. The question is how long will that take and setting the right expectations at retail. It feels like that’s probably a several-year journey. It’s a big opportunity, though—we’re still talking about $700 million in sales between now and 2012 that we could generate in hair care if we can move guys from “I’m using the unisex or female brand” to a guy-specific brand. How do we get people out of female into Axe hair and start it at an early age so as they graduate into more senior years, that’s a natural behavior that they embark on?
WWD: How do you acquire a guy?
de la Faverie: We need to talk to him in his own world, in his own environment. You need to go and find him. Something we’ve tried at Armani is going to gyms. You can bring your offer somewhere else and somewhere new, where they feel comfortable and you can engage them.
Bergh: Guys want a benefit that they can see and experience. You can’t talk antiaging to a 20-year-old—he doesn’t care. A 25-year-old woman might care about antiaging because she doesn’t want to have wrinkles when she’s 40 or 50 because that’s what mom told her. Guys don’t care. They want something almost immediate. Innovation is going to play an incredible role. There’s got to be real experience, almost see-it-before-your-eyes experience. It’s figuring out how to talk to them in a relevant, credible way that makes them want a product. Right now there just isn’t that latent demand. They’re not sitting around a conference table saying, “I can’t wait
for somebody to have a new moisturizer.” We’ve got to create the need in a credible way and then deliver the right kind of product.
Espino-Gitlin: We launched our new Web site three weeks [ago] and we’ve already seen a lift in the business. We’re working a lot on problem-solution—men respond to that. My personal way of saying it is WASGA—What’s so good about this for me now. Whenever we talk about product: What does it do? How do you use it? When to use it.
Dwyer: You can’t underestimate the power of talking to guys in their language and finding their passion points. Guys are pretty simple when it comes to most things in life. It’s about play, it’s about family, it’s about career and it’s about attraction. Those four buckets are probably the buckets [with which] you can find a space and relate to them quite well. Couple that with giving them products that actually perform. It’s not a very tough recipe to understand. There’s definitely a challenge in executing it.
It’s simple to see how guys check out hair care. You walk up in front of that category and there’s not a brand there until recently that was saying anything to you unless you had a dandruff problem. How do you expect to engage and really start to want to participate in that if there’s no message back? It’s easy to recognize how we can provide that by pushing on those passion points.
Bergh: Gillette built this incredible business on blades and razors around a very simple insight and viewpoint: Guys want to look good, feel good and perform at their best, and it’s either to get the girl or get the job. Around the world, that’s almost a universal truth. The other key part of the Gillette equity is great brands, great products, lots of innovation. We’ve got to look for ways to do that across other categories besides blades and razors.
Dwyer: It’s even gone into the details of the way the product works in their hands. You think about Axe shower gel. The shower gel can is actually like a joystick the way it fits into the hands and the implication is how do you link back to something like gaming, which is so prevalent. Guys love gadgets and love to play with things. How do you play off of those types of insights to deliver products that they want to engage with?
Maurer: For Nivea for Men, we’re using the slogan: “Work Smarter, Play Harder.” We try to demystify the usage of skin care products. We just launched a product called Active 3, which is a three-in-one product, a shower gel and shave [prep]. It’s also about demystifying the fact that yes, guys shave their body. And you help them if you make kind of public domain that it’s OK to do so. So it’s going back to education, democratizing, making things accessible and making them feel OK in the way they behave.
WWD: How much of your marketing is targeted toward women and how much toward men? Are women buying the majority of men’s products right now, and when do you think that will start to shift to more self-purchase by men?
de la Faverie: In the luxury industry, three or four years ago, over 60 percent of fine fragrances for men were bought by women. It’s slowing down a little bit, but we are still around 40 to 50 percent. There’s still a huge opportunity to increase that and talk to men in a different way. There’s also an opportunity to keep talking to women. You need women to keep buying men’s products because it gives a lot of credibility, and at the end of the day, you want to target men this way.
Espino-Gitlin: It’s about where they shop. On the Web site, over 80 percent of our customers are men. In Japan, the women buy for the men. In Korea, it’s 50-50, increasingly more men.
Maurer: We found that women are shopping, but she needs to get permission from her partner. It varies by channel. For Nivea, in mass, the [shopping] is done more predominantly by females. In the drug channel of trade, men would be shopping a little more often. But there is the kind of permission that it is OK for her to bring a product home and he says, “Yeah, that’s OK.” He might not buy it himself. But he would agree that it’s the right product.
Bergh: On blades and razors, guys tend to buy their own stuff. It’s not that women don’t do it, but most women are afraid to buy blades for their husbands because they’re afraid they’re going to get it wrong. Most of our marketing dollars are focused on guys and young guys. As we look at where our real key is, it’s basically ESPN and sports, and very heavy on the Internet because that’s where young guys live.
But we think of women as big influencers. Probably the biggest nemesis that we’ve got is the incidence of shaving declining. Guys think women think that scruff looks hot, but most women don’t want to get near a guy who has scruff, and that’s a huge insight that we’re trying to hammer away at.
Body grooming is also an enormous opportunity because guys who body groom tend to use more blades. You don’t want to shave down there with dull blades. And those guys also tend to be much more heavily involved in overall grooming and so they represent a real rich target all the way around.
Dwyer: You can’t underestimate the importance women have in grooming. Being very conscious of what women are thinking about guys and their grooming habits is an important leg that we want to lean into as we start to try and further develop the market. It’s probably one of the single biggest reasons Axe has been successful—that it was created around an idea that women care what you look, smell and feel like, and hence the products that come out around that.
WWD: Men’s products in department stores are primarily merchandised with women’s. If you could have your wish, where would you move it?
de la Faverie: At Armani, we did a few tests where we put some outposts in the men’s underwear department and in the shoe department, and we saw an incredible lift where we did it. It’s about going where they are. Often for fine fragrance, you have to go through the beauty department to find it, and what guys are going to go through Clinique and Lauder and Lancôme and all the beauty brands? They’re not. Once you go in the department store where they are, they don’t have to come down to the main floor.
Espino-Gitlin: Look at what John Allan’s did at Saks Fifth Avenue on the seventh floor or Harrods in London, which created a men’s department downstairs—we’re thriving there. We’re trying direct-response TV in Korea. It’s [been] very successful.
Maurer: Before being in the U.S. I was in Scandinavia, and H&M is a pretty strong retailer also for cosmetics and toiletries. There is something very interesting in this proximity of fashion and skin care. For us, it was a very good business model. It’s a contextual relevance. The mind-set was right—looking at dressing up, that’s just part of the ritual.
Bergh: It re-frames the whole purchase decision. You can spend $1,500 for a suit when you’re in Saks or Neiman Marcus and $100 for skin care.
de la Faverie: We are highly successful in the new Armani store on Fifth Avenue, where Mr. Armani has put everything from Giorgio Armani to Emporio to Armani jeans. We have key locations at the entrance and in the men’s floor we have fragrances. They buy a $1,000 suit or $3,000 suit and the fragrance is part of the [wardrobe].
WWD: What’s the role of megabrands versus individual brands?
Dwyer: What we see with the megabrands or big cross-category brands [is] the successful ones have had a proposition that is a very distinctive and unique, one that they’ve been able to drive quite successfully and then export it into other categories. The key is making sure there’s a category context point for that versus just saying, “OK, here comes Axe in hair care. You trust Axe, you should buy it here.” Because guys, while quite brand loyal, are also a bit unsure about buying something else they don’t see a need for.
With Axe hair care, there was an insight around—guys didn’t realize how much their hair matters to get girls. It’s a strong leverage point for us to bring the brand in, and it’s also a strong leverage point for us to talk about product benefits around the way you style your hair, the way you take care of your hair. That allows the brand to more easily move from one category into another. There’s a lot of examples of brands that have tried to extend into other categories and have failed because they neither have that strength and position or they lack the category credentials to allow them to sit down in there and have a purpose.
Espino-Gitlin: The megabrands can create the awareness with the advice of advertising the campaigns that they have and endorsements from celebrities or sports figures. This gives that permission thing. Then the individual brands: I can’t afford to have those kinds of campaigns, so my message has to be the problem-solution, proven products that give results.
Bergh: What’s a brand? A brand is nothing more than a promise to the consumer and delivering on that promise. It’s within the benefit that that particular brand promises and delivers and how far you can go. You can stretch a brand to the point of breaking it. Gillette stands for blades and razors and shaving. We rightfully belong on the face. Whether we can do toenail clippers, I don’t know. It’s still a sharp cutting instrument, but is that a place we want to go? It’s still kind of unclear whether hair care will belong or not. But clearly, anything that has to do with shaving or face or part of that morning ritual we have a shot at.
The other thing that comes to mind is channels. Gillette is clearly a mass brand. We look at how far up do we think it can go? Could it be on the main floor of Bloomingdale’s? I’m not sure. But Art of Shaving, yeah; Zirh, yeah. If you tried to flip Zirh to mass tomorrow, we wouldn’t be on the floor of Bloomingdale’s. So the role of the channel also plays a pretty important factor in the decision.
WWD: What about men’s makeup? Is there any viability in that at all in terms of problem-solution products?
Espino-Gitlin: Creams in Asia are huge. But does it translate to a really full-blown makeup line? I don’t know that that will ever happen.
de la Faverie: Some have tried it. It’s tactical. It gives you a little bit of excitement. In the luxury industry, we’ve been a little bit complacent over the years. We haven’t really done such an exciting job that customers have to run to the store and say, “My god, there’s something new.” So what the makeup does, even though it’s never going to be big, is create some excitement. Should we do it? Some brands have more equity to do it than others because that’s more their positioning. For Armani, that’s not our thing.
WWD: Name someone or a brand in the room who you admire and why.
Espino-Gitlin: Axe. Because they talk about revolutionizing. They did something that was different in the message, in the delivery, in the attraction. They made it have baseball fever—catch it! I admire them for that.
Dwyer: I like what’s done on Sean John. It’s a fragrance brand and also trying to see itself as a lifestyle brand. They take a personality and really take advantage of him in so many different ways. He’s such a powerful figure; he’s quite inspiring.
Bergh: I have a ton of respect for my competitors and I’ve learned the hard way that the minute you get cocky is the minute they take you out at your knees. I’ve seen my competitors do some really smart things over the
last couple of years, so I’ve got a lot of respect for them.
Maurer: I would echo that completely. There are obviously markets where the competition is tougher. Here, there is respect and also we’re all in this together because there are still plenty of things that can be achieved that will only be done by creating the right clout in terms of providing the right message.
de la Faverie: I admire all of the brands here. We are all making a mark. We are in different ways competing against each other, motivating each other and pushing each other. But Axe for me has been an amazing revolution of a simple gesture. They are also influencers of what we need to do to re-create the excitement. [Axe] is a perfect example of how to reinvent something classic and make it new and exciting.
WWD: Crystal ball–gazing time. When you look into the future, sum up what you see for the men’s market overall.
Bergh: I’m incredibly bullish. There’s a lot of upside opportunity. Guys are not going to be at our door. It’s going to be up to us to come up with the right innovations, the right brands and the right messaging, the right way to connect with and reach them, to make the shopping experience something they don’t want to resist, but that they can’t resist. By doing that, the category will grow and all of our brands will benefit. You can go to different markets around the world and already see it starting to happen. The U.S. isn’t the best place to take a look at what the possibility is. But go to Asia, go to Korea, go to China and see what’s happening in terms of
the opportunity. We’re in a great place because we’ve got about 700 million guys around the world who use Gillette, wake up every morning using it, and all we’ve got to do is get them to buy one or two more.
Espino-Gitlin: If I had a crystal ball, I would like to be given the creativity and the knowledge to come up with a product that talks to men in a playful way and that triggers points in their family and career and creates attraction for men.
Dwyer: The future is very encouraging. The right fundamentals are starting to take place because guys are more open to personal care. It is going to be a bit of a journey. The Unilever perspective is that we’re going to have that bifurcation across male and female in categories that have traditionally not had it, and the categories that guys are using now is that critical first step. How do we tap those passion points and bring those products that we can deliver against it? Since 2005, 66 percent of the growth in the men’s care category can be attributed to Unilever brands. Coming from [this] business model, it really starts to set the stage for the next generation down the road.
Maurer: For Nivea for Men, the good news is that, while the Axe proposition is getting built, we are just basically at the stage after Axe. We’re trying to target a little bit older, so the more we’re able to build, the more we are also going to be able to harvest. From a U.S. perspective, we’re present in shaving, after shave, face care. We just introduced body wash and we’re very happy and we’re obviously present in a lot more categories all around the world. So the path for growth in the U.S. is also very encouraging. The consumption of hair care products for men is still at an early stage, so there are definitely a lot of opportunities for us in that field.
de la Faverie: Like everybody else, I’m extremely bullish about the future. What we’ve experienced over the past two years is a bump in the road, but looking at the positive note, we’ve stepped out of the box in finding new ideas to reinvent our business and to continue to grow it. The consumer has told us, “I’m not going to come to see you unless there is an offer that I really believe in. Because for me to open my wallet, it needs to be a value for me because we’re just being a little more careful than in the past.” Everybody has looked at new ideas, and what’s going to come out in the next months or years is going to be extremely exciting.
There are ways of talking to men that are untapped that we can use to speak to them in their own world. The retailers are starting to realize it and are going to embrace it. We are embracing it. We are pushing it, and it’s going to be one of the fastest-growing categories in the future.