Shoppers’ loyalty evaporates as their choices multiply.
There is little consumer loyalty when it comes to choosing a favorite beauty brand or store, according to a recent report released by the NPD Group. The study showed that only 60 percent of women said they had a favorite brand, and only 50 percent said they had a favorite store.
A large proportion of women reported they don’t have one favorite store or brand for makeup, skin care, hair care or fragrance. In fact, four out of 10 women who make purchases in beauty categories say they don’t have one favorite brand.
“Today’s consumer is trained not to have a favorite brand in a store. How can they engage in brand loyalty when stores are selling the same type of products across all channels of distribution? They’ve really muddied the waters,” said Allan Mottus, a beauty industry consultant.
According to Mottus, customers have been trading down via their store experience as well as the brand since the retail channels have widened. “Since Sept. 11 — when department stores started losing traffic to strip centers and local stores — department store customers are more frequently buying Olay, Neutrogena and L’Oréal Paris. From the advertising and marketing standpoint, the products are said to offer the same kind of quality, but offered at a lower price point,” said Mottus.
Many industry experts feel that few women have a favorite brand and store because of the wide reach of various retail channels, including mass and specialty stores that take away from traditional department stores.
“Consumers are cross-shopping throughout these channels for various items including fragrances, skin care and makeup,” said Maria Ianni, fragrance specialist at the NPD Group. “Also, the sheer number of launches plays a huge part as the market becomes more and more cluttered and saturated, making it difficult to stand out in the crowd without inundating the consumer with advertisements or unsolicited sales help.”
In skin care and fragrance, the NPD study showed that younger women are more likely than older women to have favorite brands. Ranked from top to bottom, the top five skin care brands were Oil of Olay, Avon, Mary Kay, Dove and Neutrogena. Others mentioned included L’Oréal, Clinique, Aveeno, Noxzema, Lancôme, Bath & Body Works, Ponds and Suave.
While Cover Girl ranked number one among women who said they had a favorite makeup brand, direct-selling companies Mary Kay and Avon also ranked high on the list. L’Oréal, Clinique, Maybelline, Revlon, Almay, Estée Lauder and Bare Escentuals were also listed.
Among those cited as favorite hair care brand, Pantene and Suave led the way, and L’Oréal, Garnier’s Fructis, Dove, Clairol, Aussie, Herbal Essence and Paul Mitchell rounded out the list.
Unlike other categories, “favorite fragrance brand” was far more fragmented, with many different brands sharing small but loyal consumer bases. While 40 percent of women claimed they didn’t have a “favorite fragrance brand,” Estée Lauder holds the title among women who do have a favorite.
And when it comes to shopping for skin and hair care products, one out of two women said they don’t have a favorite store.
Wal-Mart emerged the winner across the board in all four beauty categories as the favorite retailer among women, and Target was close behind. However, for fragrances, Macy’s came in second behind Wal-Mart.
The lack of brand loyalty provides retailers and manufacturers with an opportunity to be more conscientious catering to consumers’ tastes and directing them to the right brands. According to Ianni, data showed that 75 percent of women prefer to be left alone while shopping, and they only want help when they ask for it. Ianni sees this as an opportunity for stores to train salespeople to be conscious of this and guide consumers depending on their needs.
Wendy Liebmann, president of WSL Strategic Retail, sees this as both an opportunity and a challenge — how to create a relevant environment and brand so people keep coming back.
“This means understanding the consumer’s tastes and directing them to the right brand. It helps to build relationships and brings back the idea of customer service,” said Ianni. “Manufacturers can build on the 80/20 rule by enticing consumers through various loyalty programs, which already works well for some manufacturers. This could become a bigger part of the industry and could become another part of the whole gift-with-purchase concept in the future.”
To build customer loyalty, the key is providing a pleasant shopping experience and fostering trust in a brand. Word of mouth is a very powerful purchase driver.
“Consumers will rave to their friends and families about good experiences or about products others ‘have to try,'” said Ianni. “But it’s important to know that for manufacturers and retailers, one bad experience can have the reverse effect.”
Still, attracting customers back to a store or brand is the most effective way to ensure success. “For retailers, it’s about how to create a compelling enough proposition that will make people want to come back to the store, whether it’s by offering innovation through brands and categories others don’t have or creating an experience people find relevant to their lives and building a sense of community,” said Liebmann. “It’s about respecting their customers and delivering on what you say you are going to deliver.”