ESPRIT HITS HOME WITH NEW COLLECTION
Byline: Faye Brookman
NEW YORK — Coty Inc. hopes that lightning can strike twice.
The Lancaster prestige division of Coty will launch bath and home fragrance products in April as the first fruit of a licensing agreement with Esprit International.
Coty believes the Esprit collection will do for department stores what Coty USA’s Calgon and The Healing Garden collections did for the mass market — namely, spark the explosion of an entirely new alternative fragrance category.
The two mass brands have contributed more than $50 million in retail sales to food, drug and discount stores’ total fragrance business for the year to date, according to statistics from Information Resources Inc., a consumer-trend marketing firm.
Industry sources estimate Esprit will hit first-year retail sales of at least $10 million. The global launch will be available in the fall in Europe, followed by introduction in Esprit stores in Asia.
The Esprit launch is expected to give department stores ammunition to lure shoppers away from specialty stores like Bath & Body Works and back to their doors. According to statistics gathered by Lancaster, department stores garner only 10 percent, or $200 million, of the total $2 billion bath market. “This will give department stores the opportunity to compete against the mall stores,” said Marsha Brooks, director of marketing for Lancaster.
Lancaster expects Esprit will be rolled out over a two-year period to 700 to 800 better department stores. “This should help department stores double their share of the business,” said Bob Cankes, Lancaster U.S. president.
Although some department stores have tried to wedge their way into the bath and body market, most programs have been private label entries, such as the Souson brand of Federated Department Stores.
Most department stores have failed to create an environment that rivals Bath & Body Works. “The Esprit name is well known, and it gives department stores — who are relatively latecomers to the category — a name brand to build the department around,” said Cankes. Esprit apparel and licensed goods are sold in 44 countries. Total sales of Esprit merchandise cracked the $2 billion mark in 1999.
Research conducted by Lancaster in the U.S., Germany and Spain indicated that consumers regard Esprit as a fashionable, but not a trendy, brand. “Esprit is associated with a natural [look] and the outdoors,” said Brooks. “It’s the girl next door.” She believes Esprit’s positioning makes it a perfect fit for a bath and home fragrance brand.
“There are shifts in the market today where fragrance is being used to not only smell good, but to help people search for well-being,” noted Brooks.
To that end, the Esprit line encompasses not only a body mist, body lotion and gel, but also bath salts, essential oils, incense sticks and candles.
According to Brooks, home fragrance is now a $700 million market. More than 700 million candles are now sold yearly, representing $500 million in volume. “We’re trying to capitalize on the candle trend in this line because it gives people a reason to use fragrance beyond traditional products. People want rooms to have fragrance,” said Brooks.
All products also reflect Esprit’s heritage for lively colors. There are six fragrances, each with its own color and mood. For example, a bold blue is marketed as being the essence of pure ocean air. Yellow, a citrus scent, is associated with vitality. The other colors are green, red, white and tan. Although Lancaster executives are quick to point out that aromacology claims are not being attached to the products, there is an attitude assigned to each flavor.
Borrowing a page from Calgon, Lancaster will make use of the compelling colors of the products with a self-service shelving unit that houses the line. Calgon supplied mass market retailers with a fixture that positioned the colorful products in blocks that helped the line stand out in the self-service environment.
In department stores, Lancaster hopes the display unit will help create an ambiance conducive to selling bath and body products.
Cankes envisions Esprit being merchandised in high-traffic beauty aisles to help expose customers — especially young consumers — to the assortment. “I think retailers are ready to accept self-service. Almost every major department store is testing self-service. And this is a customer who is used to it,” he said of the target 15-to-29-year-old audience. That demographic has traditionally not only been a heavy-user group of home fragrances, but a market segment that’s helped build volume at stores such as Bath & Body Works. Lancaster executives also hope that in addition to attracting young customers, Esprit will be viewed as a gift option. Cankes estimated that at least one-third of purchases will be for gifts. There are eight gift sets in the collection available on a year-round basis.
Single-item pricing ranges from $8.50 for a 2.5-inch square candle to $14.50 for a 3-by-6-inch pillar candle. Body mists are $12, while bath salts retail for $10. Gift sets are priced at $25.
Pricing is about 20 percent above mass-market products and on par with specialty stores, said Cankes. He added that he expects shoppers will buy several scents, leading to higher multiple sales.
Cankes isn’t worried that bath and home fragrance products will erode traditional fragrance volume and lower average dollar transactions. Instead, he believes it is essential that department stores offer the products to rebuild sales lost to other outlets. “Retailers welcome these price points to bring in younger customers,” he added.
Packaging for Esprit is contemporary and stylish — in tune with Esprit apparel and a departure from some of the very feminine looks of other bath products, according to Brooks. “It is something people are proud to display in their homes,” she said.
Advertising for Esprit will bow in June magazines with a combination of scented strips and single-page ads in beauty and lifestyle publications, totaling more than 50 million impressions.
Lancaster executives expect to benefit from Coty’s success in the mass market, where Calgon and The Healing Garden are now among the top selling fragrances in drug, food and discount stores.