This may be the holiday season, but in the chains, the beauty business comes at a price.
Mass market retailers call holiday 2015 a “solid” season for gift items and even better for women looking for self-purchase beauty products. That said, they noted value continues to be a driving factor, forcing chains to resort to promotional tactics they had hoped to reduce.
Fragrance, in particular, requires percentage off incentives to move the needle in mass, retailers said. Target advertised its “buy one, get 50 percent off a single item” promotion in designer fragrances and gift sets in three weeks of circulars. Coty scents were promoted at 50 percent off even before Black Friday at several retailers, buyers said.
To reduce the incidence of shoppers just cherry picking retailers to get the BOGOs, some chains linked deals to loyalty cards. Walgreens offered its Balance Rewards members $10 off fragrances such as White Diamonds, Beyond Heat, Drakkar Noir and Dolce & Gabbana Light Blue. CVS gave ExtraCare members $5 off select designer scents such as Versace Bright Crystal and Davidoff Cool Water. Instead of discounts, Ulta Beauty adhered to its gift-with-purchase strategy — this year, a robe valued at $60 for those buying more than $40 in fragrances.
“We’ve had good response to our robe. It is one of the biggest things we do throughout the year in that category,” said Dave Kimbell, chief merchandising and marketing officer of Ulta Beauty.
Beyond dollar incentives, merchants worked to reach consumers with fragrance gift ideas outside of the traditional fragrance department, which shoppers often bypass. Walgreens, for instance, has a Nautica end-of-aisle display near hair and skin care complete with testers for Nautica Life and Nautica Blue.
One strategy mass chains engaged in to reduce the square footage required to sell fragrance was to promote Web sites for a larger array of scent choices.
“With more fragrances only selling at a discount, it is telling for the industry. To maximize our space, we find it productive to handle fragrances online,” said one retailer, who added that most mass sales are of a scent the consumer already knows, so sampling isn’t imperative.
Whether in-store or online, the category can certainly use a boost. IRI data for the 52-week period ended Oct. 4 in multiunit chains reveal men’s fragrance was down 2.4 percent to $423 million, while women’s was off 7.4 percent to $419 million.
The holiday season ushered in bright sales in several beauty categories, including a welcomed resurgence in nail. “I had great nail polish sales,” said one buyer.
Retailers singled out continued demand for glossy, long-wearing polishes such as Sally Hansen Miracle Gel. The sales bonanza stretched across lacquer to encompass artificial and nail care. In particular, a trend to oval and longer talons is generating interest in nails for holiday — not so much for gifts, but self purchases.
Annette Goldstein, senior vice president of global marketing at Kiss, said the brand saw a significant surge in nail during the Thanksgiving week, especially in designs, accents and glitter nails. “With such strong lift at the start of holiday shopping, consumers are seeing both drug and mass retailers as destinations for their holiday gift shopping and holiday dressing,” she said.
Beauty blockbuster kits, a hallmark of the holidays, are selling briskly, especially those that are exclusive to retailers. Ulta Beauty’s Kimbell singled out an “only at Ulta” NYX holiday kit and the newly added Soap & Glory as very strong performers. Walgreens’ executives said several exclusives were “exceeding expectations.” One is a Wet n Wild Beauty University Palette of 130 Shades for Face, Lip and Eye priced sharply at $30 (and featured as a gift of the week).
“Walgreens has done an amazing job with the brand and this beauty palette has been a tremendous retail success,” said Bill George, president and chief operating officer of Markwins Beauty Products.
Walgreens noted two Boots No7 gifts were generating store traffic — one an assortment of skin care and cosmetics priced at $45 for items valued at $115; the other a weekender bag with a collection of bath and body products retailing for $40 but valued at $90.
Other hot categories buyers pointed to as providing a boost were brow kits, false eyelashes and devices. At a Walgreens in Somerville, N.J., the beauty adviser said many people picked up the Wet ‘n’ Wild Color Icon Trio to freshen their holiday color palette.
Increased foot traffic at holiday provides mass chains the opportunity to tout upgraded store environments and service. A case in point was a week before Thanksgiving, a Kohl’s in Hillsborough, N.J., offered a free Bliss Triple Oxygen facial. The event drew more than 100 shoppers who got to see the new enhanced Kohl’s beauty offer. Bliss is one of several new brands Kohl’s is highlighting in its beauty departments.
Houston shoppers also received a preview of tests in place at 13 Walgreens in the market. Local resident Nan Myers was struck by the upscale Boots presentation in her store and the beauty adviser who was performing makeovers, handing out samples and helping women find the right colors. “I hadn’t experienced that in a drugstore before,” Myers said. In addition to expanded Boots brands, the stores have illuminated fixtures, uncarded cosmetics and expanded Boots exclusives.
At a ShopRite in Newark, N.J., consumers were surprised by the presence of a beauty consultant who performed makeovers and offered free educational seminars on how to achieve holiday looks, as part of a test. She is one of about 15 of the supermarket company’s stores with an on-premises cosmetician.