COSMETICS: ’95’S SURPRISE GIFT
Byline: Cara Kagan and Pete Born
NEW YORK — As the last of the Christmas results were finally tallied during the past week, some striking changes in consumer buying preferences have emerged.
The most glaring contrast to past holidays was the pivotal role played by color cosmetics and treatment, a category that is typically eclipsed in December by the fragrance bar and its more giftable offerings.
This year was different, though. Department and specialty store retailers cited sales gains of more than 10 percent and as high as the mid-20s in makeup and skin care. The fragrance category, however, sweated out growth in the single digits for most retailers.
“There was a lot more excitement in color and treatment than in fragrance in 1995,” said Ed Burstell, divisional merchandise manager of Henri Bendel. “There was no clear cut, runaway hit, like last year’s CK One, although Estee Lauder’s Pleasures has been quite successful.”
In addition to the dearth of high profile fragrance introductions, retailers also attributed the new order to an increased aggressiveness on the part of cosmetics marketers, the rise of the makeup artists lines and a rise in personal purchasing by consumers, rather than pure gift-buying.
They also noted that the dynamic increases in these categories had, for the most part, been occurring throughout most of the year.
“Shopping has diminished as a leisure-time activity, as more and more women are working full time,” said Howard Koch, divisional merchandise manager of Parisian. “When women came in to buy gifts, they also came in for themselves, both to replenish the items in their basic regimen, like mascara, and to perhaps pamper themselves with a gift set or blockbuster. “We as an industry need to be aware of this fact and learn to cater to individual as well as gift-giving needs on a year-round basis,” he added.
Two gift sets that sold exceptionally well at Parisian were Estee Lauder’s blockbuster kit and Clinique’s 3-Step skin care regimen packaged in a special kit. He also singled out Lancome’s array of skin care sets as a top performer.
At Neiman Marcus, John Stabenau, vice president and divisional merchandise manager, said, “We had strong sales in treatment and in color. But this is just a continuation of what we experienced the rest of the year. We have had very strong basic business throughout 1995.”
Stabenau cited Estee Lauder, Chanel, Bobbi Brown and Sisley as being particularly successful throughout December.
Stabenau partially attributed the boost to Neiman’s cosmetics business to the spate of strong treatment launches that have been rolling out during the second half of the year, including Lancome’s Primordiale and DayWear from Lauder.
At Bendel’s, color and treatment sales were ahead in significant double digits during the holiday selling season, as opposed to fragrance, which showed increases only in the single digits, according to Burstell.
He noted that personal purchases generated much of the store’s sales in cosmetics for the season.
“We always do tons of business in self-purchase, but this year we did more so than ever,” he added. “It actually kept pace with our gift-giving business.”
Sales increases were also the result of expanded offerings on the Bendel’s floor, Burstell said, noting that this year represented the New York store’s first holiday selling season with Bobbi Brown and Aveda.
The Molton Brown makeup, skin care and body collection made its debut at the Chicago unit, while Carol Shaw’s Lorac line bowed at the Columbus and Boston doors.
“We made sure we had something new to talk about in each store,” he said.
Key lines at Bendel’s included MAC, Lorac, Benefit, Trish McEvoy and Aveda, according to Burstell.
In terms of items, Burstell reported a resurgence in the sale of luxury items on the one hand, and basic, lower ticket products on the other.
“We did a tremendous business with Chanel luxury compacts, which can be about $50, and with things like MAC brushes, which can run $50 to $60,” he said. “But we also sold out of Lorac’s foundation at one point during the season.”
Joanne P. Hickey, merchandise manager of Mercantile Stores Company Inc. of Fairfield, Ohio, agreed that the increasingly time-pressed consumer has redirected her purchasing habits.
This past December, Mercantile’s women’s fragrance business was flat while color and treatment showed a single-digit increase. “Our treatment business was very strong and healthy,” Hickey said, citing Clinique’s Moisture On-Call, Lancome’s Primordiale and Lauder’s DayWear.
One of the hottest categories, blockbuster makeup kits, seemed like an echo from past years when the gift boxes of cosmetics could be counted on to ignite the Christmas selling season. “It presented a value that the customer was looking for,” Hickey noted.
The consumer may be more pressed for time before Christmas, but she seems less harried once the holiday has passed. Hickey speculated that women indulge themselves once their families are taken care of. This was reflected in Mercantile’s exceedingly strong post-Christmas business.
On the Wednesday following the Monday holiday, Mercantile’s cosmetics business increased by 11 percent, followed by 14 percent on Thursday, 25 percent on Friday and 26.6 percent on Saturday.
Mercantile also had some strong fragrance increases, led by Calvin Klein’s CK One and Chanel No. 5. CK One, which suffered stock shortages in 1994, chalked up a 46 percent increase in December, Hickey said. Givenchy’s Amarige had a 20 percent gain for the month. Other strong women’s performers at Mercantile were Yves Saint Laurent’s Opium and Liz Claiborne’s Vivid. In men’s fragrances, Tommy by Tommy Hilfiger was “a runaway” and there also were strong launches from Hugo by Hugo Boss and Design for Men from Paul Sebastian. The latter company’s PS scent also sold well at Mercantile, as did Ralph Lauren’s Polo Sport.
But while acknowledging that treatment and cosmetics played a key role, Allen Burke, divisional merchandise manager at Dayton’s, Hudson’s & Marshall Field’s, sees the results of the season as largely a failure of the fragrance business to ignite. Color and treatment “did a whole lot better than fragrance in 1995,” Burke said, because of the “paucity” of new fragrances and “the short-term direction” some companies took, resulting in a lack of promotional support in department stores and a visible increase in the amount of prestige fragrances leaking into the mass market.
Burke questioned whether consumer buying habits had indeed undergone substantial change in December. Judging from his numbers, there was scant evidence that women were switching from gift shopping to buying for themselves. The cosmetics brands that did best were either the luxury lines — like Chanel, Christian Dior and Guerlain — or those vendors that represented newness — MAC and Origins, Burke said.
He expects the fragrance business to rearm itself this year with a slate of new launches, resulting in a different scenario for Christmas 1996.
“Fragrances will fare better,” Burke said, “because there will be enough powerful newness to provide a reason for the consumer to come into a department store to buy fragrance. The disappointments of 1995 can be attributed to people taking a short-term direction. The bean counters got control.”
A more upbeat view came from Steve Bock, senior vice president and general merchandise manager at Saks Fifth Avenue. He noted that Saks’ holiday sales of skin care and color, which also included the Lauder and Chanel scents, showed percentage increases in the mid-20s. Meanwhile, the chain’s fragrance business had only single digit gains.
He noted that cosmetics had been achieving similar growth throughout the rest of the year.
“Fragrance has become more of a fashion industry and seems to operate around hype and newness,” he said. “The minute that disappears, you feel the effects. In 1994, there was a lot of excitement in fragrance with a lot of heavy hitting launches, like CK One. Last year was much less of a powerhouse year.”
Top-selling cosmetics lines at Saks for the month of December included Lauder, Chanel, Christian Dior, Givenchy, Sisley and Guerlain, Bock noted.
Holiday hits included Lauder’s color cosmetics blockbuster and Lancome’s deluxe train case filled with color products, Bock said.
He noted that the chain’s cosmetics business also received a hefty boost from professional lines like Trish McEvoy, Bobbi Brown, MAC and Carita, which have only hit Saks’ cosmetics floor in the last year or so.
“These were all new businesses for us and added tremendously to our sales,” he said. “They have added excitement to the department and have brought in new customers to the stores, who in turn shop at other counters.”
He added that the mainstream brands added “tremendous support.” The current trend in fashion is perhaps another reason for Saks’ successful holiday season in makeup, Bock said.
“There has been a resurgence in color in ready-to-wear; there is much less black,” he said. “This usually translates into a resurgence in color for the face.”
Bock noted that he expects the upward trend in makeup sales to continue into next year and that the sluggish fragrance category might also rise to the occasion.
“I’ve not seen a year like this for color and treatment in I don’t know how long, and all signs point toward continued success,” he said. “But between Chanel’s Allure, LancOme’s PoEme and some of the other launches set for 1996, fragrance could also be on fire. There is great potential for us to have one of those rare years where everything works.”