SAN DIEGO — With beauty sales sagging across the mass market, chain retailers and manufacturers are circling the wagons to protect market share and halt the erosion.
At the National Association of Chain Drug Stores Marketplace earlier this month, rather than unleashing a swarm of product introductions, many manufacturers focused on building distribution and strengthening sales of existing items.
And retailers are taking fewer chances, letting POS data heavily influence decision-making for the time being. Target, for one, is expected to severely trim its teen beauty brands, an area where sales have been sliding.
That’s not to say there weren’t innovations. But certainly major launches were far fewer than in previous years and some plans have been put off. L’Oréal has indefinitely postponed the introduction of Cashmere Perfect, a new foundation; and John Frieda delayed the launch of a highly anticipated new hair care line, due to technology reasons.
Marketplace, held at the San Diego Convention Center June 7-10, drew more than 4,400 attendees, representing some 240 retail chains and 300-plus supplier companies.
For the second year, NACDS facilitated one-on-one meetings between buyers and sellers on Saturday, before the meeting’s official Sunday kickoff. Developed to lure more buyers to the show, the Meet the Marketplace program was judged a success by most attendees. Last year some vendors complained that they didn’t see the right buyer for their categories, a gripe that was mostly eliminated this year. “Last year was the embryonic stage,” said Mary Sammons, the current chairman of NACDS and chairman of Rite Aid. “The feedback [this year] from our category managers was that the meetings were very productive.”
A group of teens rounded up by Teen People magazine were oblivious that news was lighter than in the past and had no trouble selecting interesting items from across the show floor, which they tagged with a “Hot Picks” sticker. Some of the most innovative products selected by the teen panel were indeed plucked from the beauty aisles, including Lotta Luv’s Candy Corner cosmetics and Color Smash, a hair color kit in a paint can.
Elizabeth Arden lent some sparkle to the floor with the unveiling of Elizabeth Taylor cosmetics from the House of Taylor. Shiny gold metal components are trimmed with glass crystals that look like diamonds. Duane Reade’s category manager Marti Bentley was impressed with the look of the line.
Retailers also liked some new nail art shown.
Other notable debuts included Pretty Petals from Jordana, which are rose petal-shaped pads with single sheet applications of blush, similar to rice paper. CRL Marketing introduced an illuminated custom cosmetics fixture for its use with private label or its Yakity Yak brand.
Physicians Formula lived up to its newfound reputation for innovation with an array of novelty products including baked eye shadows and bronzers which enable wet or dry applications; Magic Cubes, concealer in a lucite cube, and Star Perfection, a shimmery face powder with a laser image of Marilyn Monroe. As one of the few brands to show continuous growth, Physicians Formula, has created an expanded planogram for both drugstores and mass merchants, and has begun to advertise on network TV.
New exhibitors also brought some Latin flavor to San Diego. A Brazil pavilion housed some 16 different beauty brands seeking new distribution in the U.S. Buyers were especially taken with fruit-based hair care offerings from the Brazilian suppliers. Jerry Dowell, a hair care consultant to leading drugstore chains, such as Rite Aid, believed the products showed great potential for the U.S. market, especially in ethnic hair care. But he noted that the companies exhibiting were probably a year away from getting down to business here.
“There’s no real infrastructure. Shipping, packaging, advertising, marketing and filling issues still need to be worked out. But I think to have a $1.85 to $3.99 ethnic [hair care] option would really work,” Dowell said.
Mark Fedyk of Ulta also saw an opportunity coming from Brazil, especially with their heavy duty conditioners. “We’ll see how it could translate with our customers.”
And Puig Personal Care, made its show debut to present retailers with a modernized version of the Spanish line Maja.
David Morocco of Brooks Pharmacy was excited by some of the show’s new beauty offerings, noting Beierdorf’s push for Nivea facial care items in 2004, Johnson & Johnson’s new Aveeno skin line, Neutrogena’s new moisturizing hair care line and L’Oréal’s relaunch of Plenitude into Dermo-Expertise.
“What we are seeing here is a lot of new stuff that we hope customers will understand and respond to,” Morocco said.
Others trying to break into the mass market included teen brand NYX, which launched five years ago in the professional market. Suggested retail prices range from $1.49 to $3.99. There was also a new contender for the budget market: Wild and Crazy, a line from Sinful Cosmetics — with a 99 cent price.
Few hair care exhibitors had new launches to talk about, save for line extensions. Advanced Research Labs is expanding on its most popular teen hair styling stockkeeping unit, Got 2 B Glued, to a four-item styling line, which retail for $5.99 a piece.
White Rain is changing the bottles of its hair care brand of the same name from silver to a pearlized gold. The company is also launching Te Tao Color Enhancing Shampoo, which will retail between $4.00 and $5.99.
Earth Elements from Global Cosmetics has launched five shampoos, called Eco, Sun, Sea, Sky and Day, each of which target a different hair type. They will retail for $4.99.
Combe Inc. has added a hair coloring sku under its Just For Men brand to target Hispanic men; copy on the box is in Spanish.
Kids Care Corp. launched Culture, a hair care line targeting ethnic tweens. The line will sell for $4.99 and is shipping to Rite Aid, Eckerd and CVS in the third quarter.
Procter & Gamble’s hair care team was absent from the show, but gibes about the company’s repositioning of Clairol’s Daily Defense and Clairol Renew 5X into value brands were heard from competing manufacturers. Retailers, however, seemed pleased with the brands’ new positioning. “I’m glad about 5X, it’s a great shampoo, but when Clairol put it on the market it was deeply priced,” said Valerie Cheyney of Happy Harry’s.
And a flood of new bath items is expected from Yardley for 2004, such as body washes, bath crystals and pumices, as well as a bath salt and foot scrub. Gift sets are planned for March, including a pedicure set and an exfoliating set. A new kids line, called Picadilly Circus is also planned.
Depilatories continued to be hot. CCA has expanded Hair Off into a no-heat gel, a bleach, strips and a spray. Each will retail for $5.99; the gel will retail for $9.99. Aussie Nads, the company that put depilatories on the map, said their Facial Wand, which retails for $19.99 is really performing well, and that their newest item, Squeegee & Creme, a depilatory for sensitive skin that comes off with a squeegee-looking type tool, will retail for $14.95, again raising the pricing and innovative bar in the category.
Barry Bickel, sales manager North American cosmetics at Procter & Gamble, said that Cover Girl was emphasizing its technological developments, including the popular Outlast lipcolor and AquaSmooth foundation. The brand he said has experienced 12 straight quarters of marketshare growth.
And Dove executives were on hand to celebrate the brand’s successful expansion into hair care and fine-tune details on the launch of Essential Nutrients, its first face care line this month. “We’re thrilled,” said Peter Waxman, “The move into face care is a key launch for us. Face is at the heart of Dove beauty.”
There are also efforts to rebuild fragrances. Many retailers don’t want to see the fragrance business slip away. Sally Yanke, cosmetics director for Medic Drug, said she is looking to get back into designer scents. “We got out because of pilferage, but we realize the category is important,” Yanke said. Richard DeSantis, vice president at Quality King said retailers need to treat fragrances as more than just a seasonal event. By doing so, they will help shoppers equate drugstores with prestige fragrances.
And Coty brought its marketing team to the show for the first time to mix with retailers on improving sell through and coordinating the brand message. Retailers are hopeful that the fall launch of Celine Dion in mass stores will reinvigorate sluggish departments.
The ambiance of the cosmetics department selling floor remains an issue. Ballou Technologies presented one solution. The company is hoping to install a test of an interactive kiosk, which can provide educational information at the point of sale about beauty products, according to Maggie Parish, president. “The goal is to draw consumers into the area.”
There is also a growing desire to customize the merchandise mix of each store to the neighborhood. Retailers were very keen on products for women of color. Markwins debuted a repackaged effort behind Black Radiance which it acquired as part of its purchase of AM Cosmetics. The upgraded look is available in carded and open stock.There were also several new items including Matte Souffle, a foundation and Fresh Squeezed lip gloss. Bill George, senior vice president, said the integration of the brands into Markwins has been smooth and inventory, he said, will be shipped daily from its China plant.
And Jordana reported that its Milani line has expanded distribution.
Prestige Cosmetics executive vice president Tom Winarick, said his display units are presenting more multicultural images, and the line has expanded it’s shade range.
Drugstore retailers still appear to be interested in attracting teens. However, most are trying to soft-pedal their teen messages. The Teen People panel suggested retailers not make their department scream teen, but offer suggestions on what items teens might like by affixing stickers of products already featured in popular magazines.
Caboodles, a leading teen brand, created its own news story. Just before Marketplace, Gary Schofield, the company’s president, departed and interim president Charles Beech was installed. Schofield attended Marketplace looking for new opportunities. The brand which sells both cosmetics and accessories boxes, revealed new items, including boxes with retro looks and 2Juicy and Lip Jelly, both lip items.
Bill McMenemy, senior vice president, marketing for Del Labs, was encouraged by early sales results of its new Sally Hansen Healing Beauty line. “We now have an 1.8 [percent] share and our goal is to achieve a 4 share.”
Then there was Bloody Mary, gothic-inspired cosmetics already sold in popular teen spots such as Hot Topic, hoping to break into drugstores. Founder Bobbie Weiner, a makeup artist, captivated attendees with tales of her career. “I did all the dead people in the movie ‘Titanic.’” she said.
Retailers were also looking at margin-building opportunities such as new implements called Tools of the Pros from the W.E. Bassett Corporation and upscale mirrors from Swissco. Retails will be 30 percent above Revlon and 30 percent below Tweezerman, said Hugh Scollins, vice president of sales. Salon Grafix appealed to retailers too, as it pitched its new Giga Hold hair care line and highlighted its high margin opportunities — 35 points versus 17 points.