Carmen Bauza and Muriel Gonzalez made Cosmetic Executive Women Newsmaker Forum history Wednesday night when the two retail beauty executives served on a panel at The Harmonie Club in Manhattan, talking about their stores, Wal-Mart and Macy’s, respectively. Apparently the duo attracted more attendees and more sponsor offers than any other panel to date. But it’s easy to see why, seeing that each has a controlling stake in their respective markets. Both executives talked about what it takes to win at retail and how to engage the consumer before and once she’s in the store.
This story first appeared in the February 18, 2011 issue of WWD. Subscribe Today.
“There are great choices everywhere a customer looks so I have to work that much harder,” said Gonzalez, executive vice president, cosmetics, fragrances and shoes for Macy’s. “So what we have to do better and better is service.” To get closer to the consumer she noted how now Macy’s tracks about 30 million households to make better informed marketing decisions, and now the retailer is better able to track consumers who do their research online and then buy products in the store.
Bauza, vice president, beauty and personal care at Wal-Mart, said that the world’s largest retailer gets to know their consumer by shopping with her, spending time in her home — “we go in their drawers” — and living their lives. She talked about how, during the month of January, she lived on a $30 budget for consumable items since that’s what Wal-Mart’s average family of two lives on. “I put water in my shampoo” to make it last longer, she said, of keeping within her budget, noting she was unable to buy the mascara that she wanted to try. She emphasized that Wal-Mart’s everyday low pricing strategy is in full force and that the key to success is offering the customer the right brand at the right price. For example, she tends to find a brand she knows her customer wants and “Wal-Mart-izes it because there is a certain expectation.”
Gonzalez said that at Macy’s there are many opportunities to grab the consumer and pull her into the beauty area. “She is shopping for jewelry, mattresses, sheets…and during the recession we picked up share from our competitors and we responded to the customer because she was making choices and we fine tuned our approach.”
While many view Wal-Mart as a retailer with a ceiling in prices, that ceiling appears to be reaching closer to the penthouse level. Bauza said that in China one can find a $2,000 bottle of wine on shelves, and in beauty, prices go from 50 cents to $70 or $80. Her average fragrance price point is $50, but at the same time she can “sell a lot of dollar product.”
Gonzalez said Macy’s offers a wide range of prices “but the value in our store is with the gift with purchase.” She said her customers love to post on Facebook Macy’s current GWP offerings, which ultimately drives interest. “That’s how they discover product they didn’t know about before and we can really hear directly from the consumer in a way we didn’t before. We monitor this and it shows us great feedback.”
Bauza said that a recent conversation with Facebook chief operating officer Cheryl Sandberg informed her that the largest percentage of Facebook users are women, who spend an average of seven hours a month on the site. “I better be there with her,” said Bauza, citing a Maybelline Fit Me promotion on Facebook that brought users, when clicking on the product, directly to Wal-Mart’s site for purchase.
Gonzalez said that Macy’s e-commerce is “growing at many times the pace as the bricks” and that product mix is pretty much the same online as in store but what she has been doing is when a fragrance is slowing down in sales she will “leave it online a little longer to give her the opportunity to buy it there.” Also, a sales person can access it online if it’s not in the store and order it there. “I am now hearing [that consumers are looking for] some of the old fragrances and I plan to use [the Internet to offer it to them] even more.”
Bauza said that Wal-Mart has been into e-commerce for the past two years and she uses online to offer things she can’t in the store, such as beauty advice. Bauza said she also listens closely to consumer requests, for example, Essie was the number-two requested brand, and now it is offered in stores. Derm brands were also high on the list for requested brands and, as of last week Wal-Mart began offering Kinerase, Cosmedicine, Dermasilk, Vita K, Specific Beauty and EB5 in 1,200 doors within the skin care aisle.
Gonzalez said Macy’s Impulse Beauty allowed Macy’s to add additional beauty brands, which were completely incremental to business. “About 40 percent of people shopping there were Macy’s customers that had not bought any color or treatment item in the store in the past 12 months. The remaining 60 percent that had bought color and treatment were buying more.” By the end of the year, Impulse Beauty will be in about 100 Macy’s locations. “It allows for a share demonstration model, an edited sku [stockkeeping unit] assortment and not having to go through the capital of a counter and a dedicated salesperson and a huge amount of inventory so we can test things much more nimbly. This will be seen not just in beauty but also in jewelry, accessories, shoes and ready-to-wear.”