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Beauty Inc issue 06/19/2009

This story first appeared in the June 19, 2009 issue of WWD. Subscribe Today.

The days when shaving constituted the beginning, middle and end of a grooming regimen are long gone, as more and more men adopt a multitiered approach to maintenance. When it comes to the men’s market, shaving is not the only game in town. Marketers have many balls in play when looking beyond traditional categories to grow sales. “A lot of companies are going after men under the recognition that men have been underserved,” says Chip Bergh, group president of global male grooming for Procter & Gamble’s Beauty & Grooming division, overseeing the Gillette, Braun, Old Spice, Tag and, most recently, The Art of Shaving men’s brands, who adds retailers are supportive of vendors driving the male opportunity despite the recession. “Men make up about 50 percent of the global population,” Bergh continues, “but the men’s market is only one-fifth of the women’s market.” Citing Euromonitor International data, he notes the men’s market is roughly $43 billion a year worldwide, while the women’s and non-gender specific market is about $230 billion. “There’s big upside growth potential,” he says. Many feel the timing has never been better, with men becoming increasingly aware of the benefits of a more nuanced grooming regimen.

 

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“Guys associate being well-groomed with success,” says Bergh. “In today’s environment, confidence is important—guys want to be well-groomed to get the girl and the job and to keep the job,” he says, noting 80 percent of men say a wellgroomed appearance makes them feel confident. Moreover, the physiological differences between men and women “really drive the need for different products,” says Bergh. He notes that men secrete more sebum and have oilier skin, meaning moisturizers need to be lighter. Men sweat on the face more, so they need a deeper cleanser, and they need a stronger antiperspirant because they have bigger underarms. “Gender neutral or female brands don’t meet what guys really need,” says Bergh. “There is a real recognition now that men have been underserved for a long time.” With that dawning recognition comes a new way of communicating. Compared with women, men are more about efficacy and women are much more intoimage when it comes to marketing. “Very technical language turns men off,” says Brian Robinson, president of Zirh Holdings LLC. “Guys like humor,” agrees Bergh. “Science and technology are important but you can’t take yourself too seriously.”

 

THE ROBUST GROWTH IN THE BODY WASH MARKET IS HAVING ONE NEGATIVE IMPACT, HOWEVER: A DECREASE IN THE CONSUMPTION OF FACIAL CLEANSERS.

Guys are also keen to know how something works and usually aren’t content to take a product at face value. The correct terminology is key. “Calling a product a stand-alone moisturizer is not something they’re into,” says Bergh. “But call it an aftershave lotion or a balm, and chances are they’ll be more receptive.” John Allan, who founded his eponymous men’s spa 20 years ago, pulls no punches when it comes to his philosophy about how to market to men. 

 

He believes department stores have taken the wrong approach, pushing items men may not need rather than sticking to the basics such as shaving, hair and body care. “At the department store counter, men’s personal care products are sold the women’s way,” says Allan. “A man is hit with freelancers and merchandising is stretched to [specialty] moisturizers. You purchase and walk out with an eye cream and you’re like, ‘What?’” Many executives agree the best way to market to men is to go to where they are—and one of these places is the Internet. Robinson says the Internet is “the best” place behind which to put resources in targeting men. “They can anonymously review [products] then actually take action to make a purchase.” The niche brand Billy Jealousy, which is carried in 300 doors in the U.S., including Sephora, Nordstrom and Barneys New York, as well as several Web sites including Amazon.com—generates a third of its business online, according to founder Pat Parsi, who adds that 90 percent of those purchasing men’s products online are male. “The more product information you provide, like statistics, Q&As and photos,” says Parsi, “the more likely [men] will be to buy the product.” While online sales may be growing, it’s the mass market that continues to be the primary engine of the entire sector. Shaving is the fuel that drives category  sales, but emerging areas hold promise. One category that marketers and retailers are particularly bullish on is hair care and styling. In January, Unilever’s Axe launched Axe Hair, an assortment of 10 shampoos, conditioners and styling aids. This followed the June 2008 launch of shampoos and conditioners by Gillette.

 

Then, in February of this year, Gillette launched six hairstyling aids. “We expect 2009 to be quite a big beginning of a viable men’s segment in hair care,” says David Rubin, Unilever’s marketing director for U.S. hair care. “Deodorant and shower gel have undergone the transformation from women’s specifi c products to men’s specific products. Hair is an obvious next step.” Rubin’s expectation is that men’s hair care, a $677.7 million business in 2008 according to Euromonitor, could reach $1.5 billion by 2012. The body wash wars have heated up, too. Last year, Nivea launched a trio of body washes. Then, last month, Gillette launched fi ve body washes to go up against Axe’s and Old Spice’s dominance in the bath and shower market. Many of these are 2-in-1 or even 3-in-1 products, which are particularly popular among men. “In the grooming category overall, body washes are very strong,” says Nicolas Maurer, chief marketing offi cer for Beiersdorf Inc., whose parent company, Beiersdorf AG, markets the Nivea and Nivea for Men skin care brands. Sales of male body washes grew about 28 percent last year. “We contributed to making the category grow [by] launching three body washes: Cool, Energy and Sensitive,” says Maurer. The robust growth in the body wash market is having one negative impact, however: a decrease in the consumption of facial cleansers. “As the category has taken off,” says Maurer, “men are potentially using [body wash also] on the face.” Overall, men’s skin care in the mass market grew about 13 percent to roughly $150 million in 2008, from $133 million in 2007, according to estimates by Euromonitor.

 


“THE FRAGRANCE MARKET RUNS IN LINE WITH CONSUMER CONFIDENCE AND WHEN IT’S LOW, FRAGRANCE SPENDING IS LOW,” SAYS NPD’S KAREN GRANT. “WE DON’T ANTICIPATE THERE WILL BE A REBOUND IN SPENDING OVERALL FOR 2009.”


The men’s market in the prestige sector has been harder hit by the recession. The fragrance category was down 8 percent overall to $854 million, while skin care ended the year down 3 percent to $69 million, according to The NPD Group.  “Overall, the market for fragrances and skin care had a tough year,” says Karen Grant, vice president and global industry analyst for beauty at NPD. Of skin care in particular, she notes, “It’s been growing each year but last year it took a dive because the shaving business didn’t do so well.” While facial moisturizers, which accounted for 27 percent of the skin care category, were up 1 percent, shave treatments, which comprise about 24 percent of the market, decreased 5 percent. “There are some bright spots but it’s a tough category,” says Grant. Standout performers include niche brands like Kiehl’s, Anthony Logistics for Men and Jack Black.

 

Other highlights include sun protection products, which doubled in volume, lip products, which grew by double digits, antiacne products, up 9 percent, toners, up by 6 percent, and body cleansers, which grew 1 percent. “Small categories are showing the biggest growth,” says Grant. In bad economic times, “skin care is an area that people will give up last as opposed to a fancy dinner or expensive piece of jewelry,” says Zirh’s Robinson. “To be clear, this bad economy is worse than most of the ones in recent memory. People this time around are being much more judicious—[asking] ‘Do I really need that?’ In good economies, it is easier to make larger sales and pile on the additional products.”

 

The numbers in the fragrance sector are particularly bleak, due in part to fewer launches. “There were 21 percent fewer launches on counter [over 2007] and there was a drop-off in how much [dollar volume] they generated,” says Grant.  In terms of dollar volume, new launches generated 20 percent less in 2008 versus 2007, accounting for 15 percent of the total men’s business. Still, newness helped drive the category. Of the top three launches, Dolce & Gabanna’s The One cracked the top five, ranking number four. It was the most successful launch of 2008, followed by Gucci Pour Homme and Emporio Armani Diamonds for Men, says Grant, who notes Ed Hardy’s men’s fragrance launch also did well.

 

When it comes to the rankings however, Armani’s Acqua di Giò continues to reign supreme. The L’Oréal owned brand has topped the list of all fragrances—men’s and women’s—since at least 2005, according to Grant.Rounding out the top five men’s scents were Armani Code, Dolce & Gabbana’s Light Blue and The One and Calvin Klein Eternity. “We anticipate [2009] is going to be another tough year,” says Grant. “The fragrance market runs in line with consumer confi dence and when it’s low, fragrance spending is low. We don’t anticipate there will be a rebound in spending overall for 2009.” Stephane de la Faverie, general manager of Giorgio Armani Beauty, agrees. “We’re trying to maintain where the market is,” says de la Faverie. “We’re working toward flat to slightly positive for the second half [and] slightly down to flat for the year.” To stimulate sales, Armani is focused on newness, as with the launch of Emporio Armani Diamonds for Men. “Everyone will work harder to come up with something new to attract the consumer,” says de la Faverie. “People are spending more carefully, so a wow factor is needed.” As to why grooming is outperforming fragrance, de la Faverie notes, “Little by little, retailers are giving more space to men’s grooming. It was a second thought, now it’s becoming top of mind.” “There’s a cultural movement toward men becoming more involved in their grooming routine,” agrees Yvette Valentine, vice president of global skin care marketing for Clinique, who oversees Skin Supplies for Men, the number-one skin care brand for men in the prestige market. She has seen men move to moisturizers with antiaging benefits, as well as products that target acne and the eye area.

 


 

“MEN ARE SELF PURCHASING MORE THAN THEY HAVE IN THE PAST,” SAYS CLINIQUE’S YVETTE VALENTINE, “[BUT] THE MAJORITY OF PURCHASES ARE STILL DONE BY WOMEN.

 

“There are definitely opportunities in targeted concerns,”she says, noting men “want it to sound manly—you definitely want to use different language.” Still, she says, “a good amount of women” purchase men’s products for their guys “because they’re in the department store and buying. Men are self purchasing more than they have in the past, [but] the majority of purchases are still done by women.” More than half—and up to 70 percent, according to some accounts—of men’s personal care products are purchased by women, according to industry sources. As the men’s prestige market has cooled, one source says, retailers have pulled products and more men are using women’s products. But that’s not necessarily the best strategy. “Once men like something, it’s harder to try to get them to try something new,” says Nicholas Munafo, president of Beauté Prestige International USA. “They have much more brand loyalty. “[Women] are much more infl uential when it comes to marketing to men,” continues Munafo. “Women try new fragrances and then men try them because women told them about it.” When it comes to self purchase, Diana Espino, vice president and general manager of Lauder’s Lab Series, Aramis and Sean John businesses, says men in the 18-to-35 age range are driving growth and perhaps the greatest opportunity is to hold on to these men as they  get into their 40s and 50s. “As generations grow, so will the category,” she says, adding 80 percent of purchases at labseries.com are made by men. Munafo says retailers need to “innovate the shopping environment to get customers to come back.”

 

In February, Bloomingdale’s did just that at its 59th Street flagship, where it opened a sleek, 4,570-square-foot fragrance department, the centerpiece of which is a wide, round fragrance bar carrying men’s and women’s scents. The cornerstone of the department is a 400-squarefoot, two-chair barber and men’s grooming area that was set up by The Art of Shaving. Aside from barber services, the space merchandises grooming products from the likes of Lab Series and Zirh. Still, many believe the path to growth lies in a masstige proposition. “I’m a big believer in distribution and making men’s grooming more accessible to men, says Dwight Schultheis, co-founder of Amenity, which is in about 235 doors globally, half in the U.S. at venues like Nordstrom, The Sports Club/LA and dermatologists’ offices. He cites as an example Canada’s Shoppers Drug Mart. “It’s pushing the corner drug store into the premium space. “Men visit drug stores and supermarkets on a far greater proportion to department and specialty stores,” agrees Zirh’s Robinson. “Also, since the distribution is so wide and the category larger in mass than in prestige, [mass market] vendors can afford to spend more on advertising.” “Science is going to keep driving men’s grooming,” adds Schultheis. “Razors are the backbone category that will drive it. When Gillette launches a new razor, it drives the business.”

 


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