MAKING UP SALES
SPECIALTY RETAILERS SAY COSMETICS ATTRACT IMPULSE PURCHASES AND ADD FUN TO THE PRODUCT MIX.
Byline: Georgia Lee
For specialty stores, cosmetics can add fun, panache and profits. From private label to brands to unique items, cosmetics take cross-marketing to a level beyond the usual gifts and accessories.
From an extensive presentation to just a few items at point of sale, cosmetics pack a powerful punch in an attractive package that requires little space. For example, they can:
Inspire customers to linger in the store.
Complement a season’s color palette.
Help close a sale or trigger impulse buys.
Add animation and interaction, particularly with makeovers, clinics and events that make the shopping experience fun.
Name brand lines, particularly if exclusive to the store, add prestige, while private label brands can generate high margins.
With private label brands, such as Columbia Cosmetics and Stephen Dante, both available in AmericasMart Apparel, retailers can customize a presentation, starting with a relatively small investment.
Apparel stores have grown from zero to 40 percent of total sales for Columbia Cosmetics, 8N104B, over the past decade.
“Retailers have learned how inexpensive our product is, and what great markup potential it has,” said Mary Ezzell, Southeast sales manager. “Something as simple as lipstick or nail polish on the counter is a guaranteed sale.”
The line is extensive, with 85 shades of lipsticks and nail polish, 75 eye shadow colors and several shades of foundations, powders, mascaras and liners. A selection of 20 makeup brushes, a complete skin care line, with the works — vitamin C, sunscreen, antioxidants, etc. — as well as a line of bath products are also available.
Retailers can sell product as is, or have product “hot stamped” with their own labels and logos. In the most expensive option, Columbia will customize, produce and manufacturer products, complete with confidentiality agreement, specifically for a specialty store.
Prices are low, with lipsticks starting under $1. A six-piece basic skin care package is $7.14. Packaging is available in ivory, black or platinum. Lipstick in an ivory case is $1.75, black is $1.95 and platinum is $2.95. Eye shadows can be packaged in sets with singles, triplets or duos. The larger the wholesale order, the lower the price.
“Stores with better-to-bridge prices can justify a markup of $8 to $10 on a $1 item,” said Ezell. “Markups are determined by location and image of the store.”
Buyer Trudy Morrison has carried Columbia cosmetics in two stores — Island Treasures in Hilton Head, S.C., and Southern Charm in Savannah, Ga., for seven years. Both stores are located in and owned by Westin Hotels. Along with a mix of apparel and gift items, Morrison offers eight shades of lipstick and nail polish, four foundation shades and an array of blushes, pencils and moisturizers, offered as unlabeled product in black cases. Morrison said 75 percent of sales are to hotel guests who had left home without makeup items, while 25 percent are impulse purchases. The colors and packaging of the line have been well received, even by traditionally brand-loyal cosmetics shoppers. With more than a 100 percent markup on items, Morrison said she has found no price resistance and has shown a nice profit each year.
The Total Accessories showroom (7S114) has offered Stephen Dante Exclusive Cosmetics, a New York line, for 15 years. Stephen Dante, a 40-year-old company with origins as a wholesale distributor to rural areas, now has more than 2,000 accounts, including specialty stores, salons, spas, photography studios and entertainment industries. Around 50 percent of the line is branded, with the other half sold as private label. Annual wholesale sales are around $2.5 million.
With more than 500 products, buyers can choose from four foundation formulas in 18 shades; pearlized, matte or sheer lipsticks, and nail colors and eye shadows in more than 50 shades.
“We know retailers vary greatly, so we work with them to get an insight into their needs,” he said. “A store with a broad customer base may need more extensive product, while for others, a starter kit may be enough.”
A starter kit of skin care or cosmetics is around $500 to $700, and a sample pack of 50 full-size cosmetics is available for $89. Lipsticks are $2.50 wholesale, and treatment starts at $6.00 for a cleanser. The company will help retailers design and produce private labels and hot-stamp product in-house.
While private label has a secure role, brand name cosmetics can add prestige to specialty stores. New York makeup artist Paula Dorf, whose celebrity clients include Barbra Streisand and Winona Ryder, launched a namesake line in 1998, which targets specialty and smaller department stores. Offering around 30 shades of eye shadows, lipsticks and cheek color in various formulas, the line also has around 20 brushes. Unique products include a mascara “fan” brush, eye primers and a “transformer” solution that turns eye shadow into liquid liner.
Currently, the line is sold in 50 specialty stores around the U.S. Besides Bergdorf Goodman in New York, Paula Dorf is carried by Southeast apparel retailers such as Wickets in Ponte Vedra Beach, Fla., Berlin’s in Charleston, S.C., and Potpourri, Atlanta.
The upscale color cosmetics and brushes line are similar in price and content to Bobbi Brown or Trish McEvoy, at $8 for eye shadow to $30 for a large powder brush, wholesale. Julie Rutenberg, owner, Potpourri, a better-to-bridge specialty store with two Atlanta locations, added the Paula Dorf cosmetics line in March 1999. Rutenberg discovered the New York line through her New York buying office. With a $6,000 product initial investment that included special product invoices and makeup charts, she replenishes product monthly. She also hired Elizabeth Sorensen, a former Bobbi Brown makeup artist at Charleston’s Saks Fifth Avenue, to work full-time in the store as a makeup artist.
Rutenberg said that although she is just now breaking even with sales, she expects Paula Dorf to equal 7 percent of total sales in the next few years. She advises keeping product stocks up, to serve new and repeat customers.
Although she had to adjust to a whole different buying and selling process, with less turnover than apparel, Rutenberg said the investment was worth every penny. Cosmetics, she said, are a great opportunity to extend and cross-market product with apparel.
“We’re offering a service and convenience to our customers, who hate going to malls for cosmetics,” she said. “People love the makeovers.” Rutenberg said every initial customer has come back for more product.
For those retailers who want a unique item, rather than an entire line, Lipsense, a lipstick line at Sheppard/ Tucker Inc. 9E108, and at all Gift Shows in temporary format, is a way to test cosmetics. Lipsense is lipstick that molecularly adheres to lips and stays on for four to six hours or more. It won’t come off through eating, drinking or swimming and leaves no stains on glasses or napkins. The product was developed by a chemist two years ago and is sold to specialty stores and independent distributors.