BEAUTY GETS WIRED INTO COMPUTER AGE
Byline: Faye Brookman
SHORT HILLS, N.J. — A winter storm that pelted New Jersey this week kept the posh Mall at Short Hills — which features a number of upscale department stores — quieter than retailers had hoped.
But the snow had no effect on cyberspace; the modems connecting to CyberShop, an on-line shopping mall, were buzzing.
“We’re having a great holiday season,” said Jeffrey Tauber, president of the service, which is based in Montclair, N.J.
He said around 5 percent of CyberShop’s total sales — which industry sources estimated will be $250,000 in its first year, ending next August — are in beauty categories, among them cosmetics, fragrances and bath products.
Although that rate would translate into only about $12,500, on-line shopping is a potentially fertile area for the beauty business, many in the industry say.
Since its launch this summer, CyberShop has had 750,000 visitors to its World Wide Web site per week, Tauber said. Those who click on to the site can access 1,000 beauty items, ranging from Dolce & Gabbana fragrances to Crabtree & Evelyn bath and body merchandise.
CyberShop also hosted the U.S. launch of XS Pour Elle, Paco Rabanne’s latest women’s fragrance. The scent is now sold in a traditional retail distribution, as well.
“Shopping for cosmetics and fragrances on line is ideal,” said Tauber. “You can disseminate more information than in a store, and there are no annoying people spritzing you every minute.”
Gary Arlen, president of Arlen Communications, a research firm in Bethesda, Md., agreed that on-line outlets will complement the beauty industry in the years to come.
“Beauty is selling sizzle, and there’s no better place to sell sizzle than the Web,” he claimed.
On-line sales of all types of merchandise are mushrooming, though estimates vary widely. Arlen estimated that in 1994, overall on-line volume reached $750 million, with the figure expected to double by the end of this year.
The New York-based Jupiter Communications, which tracks the on-line services industry, predicts that on-line retail sales will eclipse $10 billion by the year 2000, by which time an estimated 40 million-plus consumers in the U.S. will have World Wide Web access by that time. Currently, about 1.5 million have access.
Although beauty represents less than 2 percent of total sales now, industry experts think it could go as high as 8 percent in the next five years as more products and services become available.
With that in mind, more and more beauty suppliers and retailers are being lured onto the Web:
* Anna Nicole Smith launched a Web site this month to support her unisex fragrance, LIVE. The location features exclusive photos of Smith, as well as personal anecdotes she has written. Users can interact with Smith, and get a toll-free number not only to order the scent but also to learn the location of nearby Camelot Music stores where LIVE is sold.
LIVE is available in two stockkeeping units: a 1.7-oz. eau de toilette for $12 and a 3.4-oz. version for $20.
Industry sources estimate overall first-year wholesale volume will approach $2 million.
“What you are doing with a Web site is getting a whole audience of 13-to-25-year-olds who do everything via the Internet,” said Peter Klamka, president of Wilshire Fragrances, the distributor of LIVE. “You can do more on the Web than any point-of-purchase display or video in-store.”
Klamka said Smith’s site has had an average of 25,000 hits per day.
* Information about Sassaby’s Jane brand is accessible through Her Interactive’s CD-ROM game called McKenzie & Co.. Makeover tips are given as part of the game, and a sample of Jane lipstick is enclosed in the packaging.
Jane ended Jane’s Brain — its site on the on-line server Prodigy — in August, but the firm continues to seek ways of reaching teens via electronic means.
* Bonne Bell is setting up a Web site, according to Jess Bell Jr., vice president of marketing.
“Teens today are very aware and interested in the Web,” said Bell.
Web users will be able to sign on to learn about fashion trends, find out about new products and discuss hot issues such as the environment.
* Clairol, through its parent, Bristol-Myers Squibb, has a Web site called Women’s Link, where users can get information about hairstyles and the firm’s range of hair colors. On-line advice from hair care gurus is also available, as is information on a variety of other topics, from child care to fitness.
Eventually, Clairol hopes to be able to recommend local stores where consumers can buy the products.
* America Online features The Fragrance Counter, a direct service offering hundreds of prestige fragrances, often with savings over department store prices. Recently, for example, a 1.7-oz. Alfred Sung eau de toilette was promoted at $38.79, versus the suggested department store retail price of $49. However, consumers have to add a shipping cost of $4.95 for UPS or $7.95 for Airborne Express.
A wide range of prestige and mass market fragrance, skin care and makeup brands are available at the America Online site.
* Aveda, Avon, Shiseido, Giorgio Beverly Hills and others also have informational Web sites where customers can get product descriptions and learn about the companies.
Among the retailers surfing the Net are Wal-Mart Stores, which has a site containing job opportunities, information on stock performance and a current store advertisement; J.C. Penney, which has images of items and prices on its site; Nordstrom, which offers an electronic mail service called Personal Touch America, where a “personal shopper” answers on-line questions and fulfills orders through e-mail, and The Body Shop, which has a product information site.
Several supermarket chains also have Web sites, among them Sloane’s Supermarket Shopping Network, based here, and Cincinnati’s Kroger Co. Others have tie-ins with networks that manage on-line orders, among them Peapod in Evanston, Ill., and Shoppers Express in Bethesda, Md.
Some sources at supermarket firms, however, said beauty represents a miniscule portion of on-line sales.
Cyber shopping is the latest wave threatening to remove beauty consumers from traditional retail outlets, following other growing channels such as direct marketing, catalogs and home shopping.
“It is another example of taking products to customers, but there will always be those who have to touch and see it,” noted Doug Bailey, an industry consultant and former president of the Home Shopping Channel.
The lack of being able to touch and sniff is acknowledged to be a big barrier for selling beauty via computer. Another obstacle has been that surfing the Net is still more highly favored by men — the wrong gender when it comes to building an audience for beauty marketing.
Tauber at CyberShop said his audience is about 60 percent male, while sales of LIVE, said Klamka, are also about 60 percent to men.
“Demographics [of Internet users] have skewed 85 percent male,” said Arlen of the research firm. “It is toys for boys. But we’re finding that women are discovering that if they go on line and can do something they need to do easily, like buy a fragrance, they appreciate the convenience.”
Another hurdle for selling merchandise on line has been concern about divulging credit card numbers over the Internet. As a result, many companies have opted for informational sites rather than full-service shopping locales.
Tauber at CyberShop suspected other reasons behind the reluctance to conduct actual sales. “There’s really no safety problem,” he said. “The real problem is that manufacturers would face a great deal of flack from retailers if they went direct.”
Tauber asserts that most retailers and vendors will be conducting the abundance of their business on the Internet in the near future.
“Department stores as we know them today will become obsolete,” he predicted. A final caution for many looking to go interactive is the cost. A Web site can run into the $100,000 range just to set up and between $15,000 to $20,000 per month to maintain, Klamka said.
But with shoppers becoming more disenchanted with retail stores, shopping through a home computer is increasingly attractive, industry experts said.
Research from Kurt Salmon Associates, New York, states that 53 percent of consumers surveyed plan to shop less at traditional stores in 1995 — with 21 percent planning to purchase from home.
Market Facts in Arlington Heights, Ill., has research showing 82 percent of the American population have heard of the Internet and 45 percent are aware of the World Wide Web.
“I wouldn’t launch another fragrance without a Web site,” said Klamka.
Steven Manenti, who had been vice president of BioCosmetic Research Labs of Long Island City, N.Y., has been named president of North American consumer products for CCA Industries of East Rutherford, N.J.
Prior to his position at BioCosmetic, Manenti was president of FabergA, where he helped launch Brut Power Stick deodorant in the Seventies.
CCA manufacturers and distributes a number of mass market product lines, including Nutra Nail and Sudden Change.