Byline: Kim-Van Dang / Chantal Tode

NEW YORK — Diversity — that’s the one characteristic the mass market beauty business is sure to have at the turn of the century.
While the big have been getting bigger of late — with L’Oreal’s purchase of Maybelline only one of several moves — those firms that occupy the nooks and crannies of the industry are determined to be around in the year 2000. And they’ll have plenty of niches to fill.
Arnold Brown, chairman of Weiner, Edrich, Brown Inc., a 20-year-old consulting firm here that tracks trends for Avon, General Motors, Coca-Cola and other major corporations, has also zeroed in on that theme.
Brown said that companies leading the charge into the 21st century are already addressing shifts in consumer attitudes.
“These firms are not waiting for President Clinton to build his bridge,” he said, referring to a common Clinton speech theme. “They are paddling across into the future.”
Brown offered up some observations on the not-too-distant future of the market:
Baby boomers will be in their 50s and using more anti-aging products, including hair thickeners and hair dyes.
The concept that beauty goes hand in hand with good health will be more prevalent.
Total wellness will be another beauty priority. “You will not only want to look good, but feel good about how you look, too,” Brown said.
The diverse, multicultural model of beauty will become more acceptable.
Successful retailing in the future will fall under the guise of “edutainment,” offering consumers education and entertainment value.
The “individualization” of product is a key concept. “Once the consumer gets a taste of that, they will expect it everywhere,” Brown said. “The secret is to become intimate with her through better use of technology.”
Globalization will be a survival imperative.
To that end, Revlon Inc. executives are working hard to grow the company’s overseas business.
“We’re taking the U.S. model and applying it internationally,” said George Fellows, Revlon’s chief executive officer and president. “America has the lead in technology as well as a unique vision of beauty.”
Kathy Dwyer, president of Revlon Cosmetics USA, said, “We’re also expanding the focus of beauty. It’s not just what a woman looks like, but what she projects: confidence.”
“Most people approach globalization in mechanistic terms,” Fellows said. “They look at things like packaging. We think it’s attitudinal as well as functional.”
The two agreed that there will be further consolidation of retailers and a shift away from assisted sales.
“Time will continue to be the number one issue,” Dwyer said. “Women will demand convenience and products that perform the first time, as well as the second and third time. There won’t be a lot of trial and error.”
Carol Hamilton, senior vice president of marketing for the L’Oreal Retail Division of Cosmair Inc., said that hair color is the category to watch in the future.
“By the year 2000, hair color will exceed the shampoo category in sales value in the U.S.,” she said.
New technologies and fashion will drive its growth, she explained, adding that L’Oreal will also push it with advertising.
Hair color will be more closely associated with other products within the beauty arena and promoted accordingly, Hamilton added: “It will be considered a shaded cosmetic rather than a toiletry.”
Having integrated its hair care division with its cosmetics and fragrance divisions, “L’Oreal Retail’s strength will be to leverage the synergistic relationships across all beauty categories and between its various brands in ways other beauty companies cannot,” Hamilton said.
Marc Pritchard, president and general manager of Procter & Gamble Cosmetics, predicted “an explosion of self expression.”
“We have only seen the tip of the iceberg,” he said. “Demand for color products will keep going up. There will really be no rules about how people express themselves. Color will go beyond lips and nails. We’re seeing a lot of color on the eyes and the face in Japan already.
“Femininity will become a greater trend, too,” he continued. “Think of the way it was 10, 20 years ago, when many women were first entering the corporate world. They downplayed femininity in their power suits. Now, it’s different, and that difference will become greater.”
Among P&G’s brands, Cover Girl is already addressing the multicultural beauty issue with a slate of new, ethnically diverse models. P&G will also focus on its Max Factor business with new advertising. A third P&G franchise, Oil of Olay cosmetics, is currently undergoing testing in the U.K., after spending some test months on American shelves.
“It looks very encouraging,” Pritchard said, adding that he sees the line for women of all ages who are concerned with “beauty on the outside and inside.”
He also addressed fundamental changes that he hopes to see at the retail level.
“I really believe that retailers and manufacturers have an obligation to make shopping a fun experience,” he said. “In the mass market, it’s not fun right now. The number one consumer issue is product availability. Lineups are very inefficient. They differ from store to store, as do prices.”
Pritchard also said many manufacturers have to “get out of the churn-burn-and-return mode.”
“They introduce new products all the time, support them for just a little while or not at all, and then accept returns,” he said. “That’s not good for anybody, most of all the consumer.”
Pritchard said he also believes that promotions have to go back to being about introducing great ideas to the market and not about price and special packs.
Lastly, he discussed the idea of assortment streamlining.
“Look at McDonald’s,” he said. “It has one standard menu everywhere. There’s something to that.”
Two direct-selling beauty companies believe the opposite: that the fast-food approach will not work, at least not on a global basis.
Cheryl Halpern, vice president of global product marketing for Mary Kay Cosmetics Inc. in Dallas, said, “Our customers and our consultants have growing diverse needs. With a sales force of 475,000 people worldwide, we can’t have a cookie-cutter program that works for everyone.” Customization is the way to go, she said.
“Women have personalized shoppers and trainers already,” Halpern noted. “Personalized beauty will be what they want next. People are increasingly time-pressed, and the convenience we offer will mean a lot, as will our one-on-one teaching approach.”
That said, the company is also looking into selling on the Internet and new advertising. In terms of products, the company will focus its efforts on fragrance, a category it has never addressed.
“We’re still shaping plans for the year 2000,” Halpern said, “but we know we want to build on color, skin care and fragrance.”
While it has a strong baby boomer following, Mary Kay plans to start courting generation X — women in their 20s.
It is also pioneering a consumer base in China and Russia, markets it entered in April 1995 and September 1993, respectively. There are now 9,000 Mary Kay consultants in China and nearly 44,000 in Russia.
Lynn Emmolo, group vice president of global product marketing at Avon Products Inc., said her company is also growing its fragrance business. It already has a strong fragrance franchise in place in Latin America, she said.
But skin care and color cosmetics will remain important, she stressed.
“We are introducing home products, and we now offer fashion, but beauty will still be the focus of our product mix,” she said. “We want to be known as a women’s company that is contemporary, diverse and offers great products at a value.”
China and Russia are areas of high growth for Avon, she said, adding that the company is also eyeing opportunities in Eastern Europe and Latin America.
“The demographics are younger in emerging markets,” she said. “Three years ago, we were not ready to talk to 20-year-olds, college students. We are now.”
Children’s products are another potential gold mine for the company, she said, identifying hair care, foot care and bath collections as other areas of growth.
“Globalization is the buzzword, though,” she said. “No one has it pinned down, but companies that develop the best global models will be the leaders. And those models will not be cookie-cutter. How will you market a brand to customers in their unique cultures around the world? That will be the challenge.”
Steve Sadove, president of Bristol-Myers Squibb’s beauty care division, which includes Clairol, claimed that beauty is “one of the more vibrant businesses as we look into the next millennium.”
There is opportunity for growth in hair color, said Sadove, for manufacturers that can produce better delivery systems, greater ease of use and superior ingredients.
In hair care, the winners will be those who can deliver better ingredients and develop products that meet the needs of women with damaged, flat or unmanageable hair.
As it tries to meet those needs, Clairol is aiming to be the number three hair care company in 1997 and beyond, said Sadove. He puts Procter & Gamble, Unilever and Alberto-Culver as number one, two and three, respectively.
International business also holds opportunity for future growth, said Sadove. Clairol’s current investments in eastern Europe, China and several Latin American markets will pay off down the road through bigger contributions to the company’s bottom line, though he declined to say how much.
Larry Freeman, president and ceo of Freeman Cosmetics, contends that specialty mass beauty stores such as Ulta3 will be a more significant marketplace factor come the millennium.
Small beauty companies that find it increasingly tough to compete for shelf space — especially in light of consolidation among the major drugstore chains — will discover a more open attitude at these specialty stores, he said.
Beauty consumers, in turn, will frequent specialty stores more often because of the greater variety.
The belief that beauty is an attitude and that “it makes no difference what you use on your skin or hair if you don’t start from the inside” will become more prevalent among women, said Freeman. The company’s new advertising theme, “Beauty Is Inside,” embodies this message.
Eighteen percent of Freeman’s business is currently generated overseas, and by the year 2000, that number will climb to 25 percent, said Freeman.
Growth will come primarily from mainland China, Eastern European countries, Budapest and Northern Europe, and will be limited only by the company’s ability to service its distributors.
Freeman plans to add two high-level positions to the international division in order to alleviate any pressure.
Shelly Zimbler, president and chief operating officer of Redmond Products, maker of the Aussie brand, is also concerned that niche manufacturers will face greater difficulties in light of industry consolidation.
“If we can’t continue to grow in the double digits each year, than we aren’t going to be able to stay in existence,” he said.
More beauty companies will realize that television advertising is essential in the struggle for survival, said Zimbler.
Redmond aired its first network advertising ever last year, and TV advertising will again be a part of marketing plans in 1997.
There is room for growth in hair care, said Zimbler, as he raised the possibility of Redmond creating a second brand.
“We would love to have a second line of products, but we aren’t going to do it just to do it,” he said. “We have to make sure we have something the consumer really wants.”
He predicted that the smartest and most creative retailers and manufacturers will increase their hair care sales by raiding the approximately 50 percent of hair care business done by outlets other than traditional retail — such as door-to-door sales, infomercials and salons.
Contrary to most, Redmond does not hold the same optimism for international business opportunities.
Redmond was naive, said Zimbler, when it decided to market Aussie overseas. With the exception of the U.K. and Canada, the effort hasn’t proven successful.
“By the year 2000, I don’t think we’ll be selling Aussie anywhere other than the U.K., U.S. and Canada,” he said.
Jerry Hickey, senior marketing manager at St. Ives, thinks technology will continue to be important in the beauty industry.
“Something we are looking for in hair care is applying new technologies that are naturally based,” said Hickey. “Research and development is really critical” as the company seeks to become the natural products leader in the hair and body categories.
He believes the natural side of beauty will grow and that consumers will get tired of paying higher prices for natural products in specialty stores. Instead, they will be purchasing more natural products in drugstores and supermarkets.
The fragrance business wasn’t given such a rosy outlook.
“Fragrance has seen its time,” said Mark Kaplan, president of Sarah Michaels, a supplier of fragrant bath and body products.
Whereas traditionally, men have bought fragrances as gifts for women, in the near future, men will look to bath products more often, he said.
“Not only is it an affordable gift choice, it is also a personal indulgence. Just look at the bathrooms being built today — they are sanctuaries, places where people can go to get away and be by themselves,” he noted.
According to Bill McMenemy, executive vice president marketing at Del Laboratories, makers of the Sally Hansen and Naturistics brands, the challenges and opportunities that face the beauty industry in the future are retailer and supplier consolidation; the blurring of lines that separate trade classes, and baby boomers fighting the aging process.
Del’s plans for the future could include entering new categories, either through expanding existing brands or acquiring new ones, said McMenemy.
Del will also be taking an aggressive stand abroad: “We see global expansion as a major growth opportunity and plan to establish global brands in both cosmetics and pharmaceuticals.”
While he didn’t predict what percentage of Del’s business would be overseas by the turn of the century, he did say, “we know that we want it to be substantial.”