MASS BEAUTY HITS JACKPOT
Byline: Laura Klepacki / Chantal Tode / With contributions from Faye Brookman
NEW YORK — The mass market appears to have hit upon a winning formula.
According to industry executives, it is a combination of mega-drugstore chains placing more emphasis on beauty and manufacturers investing heavily in research and development and promotions. The result has stirred excitement at drugstore counters and created an atmosphere that is attracting new customers and trading up old ones. All this has driven beauty and treatment sales.
“I think at this point in time the mass market is as strong as it has ever been,” said John Wendt, president of Maybelline. “The outlook continues to be excellent providing we continue to challenge the consumer with technology and creativity.”
“There’s a lot of health in the mass market,” said Michael McNamara, executive vice president of global marketing and general manager at Neutrogena. “What’s been driving growth for the industry is the economy and that the products that are available at mass are generally more esthetic and efficacious than in recent history.”
The sales figures appear to back up these executives. The most recent data from sales-tracking firm Information Resources Inc. indicates that facial-cleansing sales are up a whopping 42 percent for the 52-week period ended April 26, driven largely by the success of pore strips from Biore and Pond’s. Facial-moisturizer sales for the same period are up 6.8 percent. In cosmetics, the total market is up 9.8 percent for sales of $2.7 billion.
Currently, fragrance is the only segment that seems to have a drag on the beauty industry. With sales of $673 million, women’s fragrances are up only 0.7 percent for the year.
In recent months, said Wendt, “We have seen the consumer respond to [technology and creativity] — both in terms of increased usage and willingness to experiment.” Maybelline has probably benefited from the quick-dry nail-enamel trend more than any other manufacturer thus far. As of February, sales of its Express Finish line were up 170 percent taking third place in the market following Revlon and Sally Hansen, respectively.
Cheryl Vitali, executive vice president of marketing for Revlon, pointing to quick-dry polish and additionally, moisturizing lip color as examples, said “that kind of product news is allowing women to cross over to the mass channel and be more loyal to a product than a channel per se.”
Carol Hamilton, senior vice president of marketing for L’Oreal Retail, simply said the concept of an “exclusive shopper no longer exists.”
“We feel ultimately, the consumer is cross-shopping with department stores, convenience stores, specialty stores and mass stores — depending on the services and products they offer.”
Traditionally, the salon and department store markets led in product development, which would eventually be adapted at mass. But today, “new products are being translated at the mass market faster than ever before, and now, sometimes it begins in mass and filters up,” said Joseph Bierman, vice president of U.S. Beauty Sales for Avon Products Inc., which is often credited for starting the alpha-hydroxy skin care revolution.
This scenario holds true for Biore, which was introduced by Andrew Jergens Co. last summer and quickly rose to the top of drugstore sales charts creating a new category — the pore-cleansing strip — along the way. Now Elizabeth Arden is introducing its interpretation into department stores in August.
Still, while manufacturers concur that cutting-edge technology is the source of growth, others caution marketers to take care in how they deliver the message.
“I think the consumer is a little bit overwhelmed with technology,” said Susan Savoie, vice president of marketing at Beiersdorf, which makes Nivea Visage. “They are overloaded and are getting skeptical.
“Technology for the sake of technology will not do well,” said Savoie. “But if you can make it clear and meaningful and deliver a benefit, then it will do well. That’s our mission with Nivea, to develop products that are truly on the cutting edge of technology and are not about a lot of hocus pocus, just clear, tangible benefits.”
Department stores have also traditionally had a competitive advantage by offering better service, with trained personnel behind beauty counters to answer consumers’ questions. But according to manufacturers, this personal touch is losing its relevance in today’s marketplace because consumers are better informed than ever before and what they don’t know they can quickly learn about via the Internet.
In the past, consumers made the trip to a department store because they felt more confident making their beauty purchases from a knowledgeable person, said Jeffrey McCurrach, director of marketing for Biore.
The scenario is changing, he continued, because as marketers invest more heavily in R&D, they are also getting more sophisticated at informing consumers about how their products work.
“Our mission is to educate people as to why the products work, which is part of what they used to rely on a saleswoman at a prestige counter for,” said McCurrach. The success of Biore’s pore strips is based not only on filling an unmet consumer need but, according to the industry executive, also on the company’s advertising campaign, which employed print and TV advertising to communicate with consumers in a very clear yet amusing way about how the products worked.
Neutrogena’s McNamara makes the point that consumers are more informed about their skin and its needs than ever before. “Consumers are getting more and more savvy and are less dependent on the advice that they used to get from a department store counter,” he said, adding that the women’s fashion and beauty magazines deserve some credit in this area as they have been including more informative articles about beauty and grooming over the past few years.
Providing guidance and information is also a growing trend among mass cosmetics companies which have long felt at a disadvantage to department store brands for lack of one-on-one contact. So, to become more intimate with consumers, several have taken to cyberspace to help with shade selection and application information. Cover Girl’s Web site provides “how to” information and Revlon gives visitors a chance to “make over” its models Cindy Crawford and Halle Berry.
But while some consumers are true believers in the benefits of shopping the mass market, others need a little coaxing, said Beiersdorf’s Savoie.
“Some consumers still want the reassurance of a person behind the counter but some, after they’ve sampled a product, are willing to go into a drugstore and buy it,” she said, adding that this is one reason manufacturers are making sampling a big part of their launch strategies these days.
When Beiersdorf introduces a couple of new Nivea Visage items later this year, it will distribute five million samples to consumers so that they can see for themselves how the products work, she said.
For its new True Illusion foundation, Maybelline conducted a direct-mail sampling program for the first time, and also included sample packets and shade cards in its magazine ads.
Sampling programs are also being expanded at Avon, said Bierman. “Products are more affordable now, but there are more choices and samples can offer a comfort level with a given product, especially in skin care.
“We will be doing more to help customers really experience product as much as possible,” he added.
For Procter & Gamble, sales of its Cover Girl line are up 7 percent for the year ended March 29, said Marc Pritchard, vice president and general manager for P&G Cosmetics. He attributes its growth to expanded color promotions and marketing tie-ins.
P&G has also embarked on a program to reduce duplication, while expanding shade selection with the goal of making shopping easier for consumers. Under the Max Factor line it has eliminated three of its five foundation lines. The space gained has been dedicated for a newly created panel providing product and fashion information. Currently it is featuring a special offer for a guide book written by makeup artist Sarah Monzani that ties in foundation samples and product coupons.
Retailers can also claim credit for helping to improve beauty sales at mass, say industry executives.
Biore’s McCurrach said that chains such as Walgreens, Wal-Mart and Rite Aid should be commended for the job they have done in improving the look of their beauty departments and thereby increasing their appeal to consumers.
Beiersdorf’s Savoie said that the dramatic consolidation of the drugstore industry in the past five years — which has resulted in the top four chains commanding more than half of the industry’s volume — provides a unique opportunity for these retailers to become beauty destinations in the minds of consumers. Walgreens, CVS, Wal-Mart, Rite Aid and Eckerd have all stepped up their promotion of beauty in their advertising recently. Rite Aid, CVS and Eckerd have also instituted money-back guarantees on most beauty purchases, thereby hoping to encourage trial.
These same chains are also putting more of an emphasis on delivering information to shoppers, said Savoie. “All four major chains are trying to provide vital information to consumers, which starts to mimic what department stores are doing.” She pointed to Rite Aid’s and Walgreens’ beauty pamphlets that are distributed in stores to consumers and CVS’s program for providing consumers with brochures as examples of this. Rite Aid also recently moved beauty aids closer to cosmetics to create a beauty boutique area.
Eckerd and Walgreens have also kept on their beauty consultants, even though most other chains have eliminated this costly service.
While retailers have been putting more emphasis on housekeeping, in some cases even using third-party consultants to keep beauty departments well stocked and looking clean, manufacturers have put their efforts into creating more attractive fixtures.
New York-based The Royal Promotion Group makes floorstands and countertop displays for mass market and department store beauty companies. Bruce Teitelbaum, president of the company, said that more and more mass market companies are requesting displays that have a quality, premium look instead of the disposable cardboard pieces usually associated with this channel of trade. Recently the company created a display for Maybelline’s Express liner and lip color in one, which is shaped to resemble the lip-color pencil.
Other merchandising units that retailers say have helped to improve the look of their beauty departments include Revlon’s display for StreetWear, which tries to bring an urban, specialty retail look to mass; Dana Perfumes’ Fetish display, which encompasses cosmetics, fragrance and bath products in one unit, and Coty’s display for Healing Garden, which uses wooden accents to create a more upscale look.
Many of these concepts have been borrowed from specialty stores such as Bath & Body Works and Victoria’s Secret, which have taken a share of sales from both mass and prestige brands. “Those stores have a nuance and an element that the rest of us aspire to,” said Bierman of Avon, which is opening its first U.S. retail store later this year. “They offer something more. They give value, quality and they give you some flair.”
The trend to using technological advancement to drive sales also extends to health and beauty aids categories, where hair color, shampoo and conditioner and bath sales are all benefiting from an infusion of new technology.
Clairol and L’Oreal are readying hair color launches this summer and executives at each company insist the new lines bring a more upscale approach to the category.
At approximately $10 a box, each also raises the average price in hair color.
Helene Curtis’s launch of Thermasilk shampoos and conditioners earlier this year is performing well, according to retailers, in part because of the difference of its approach. The advertising for the items, which promise to improve the health of hair with the use of heat-styling aids such as a blowdryer, have a very high tech look without being clinical. Don Pettit, executive vice president of marketing and product development for Sassaby Inc., parent of Jane Cosmetics, which was purchased last fall by Estee Lauder Cos., doesn’t necessarily agree that technological innovations are driving the cosmetics category.
Pettit said that he thinks it is much more basic than that.
Recalling how the market was flat for several years up until about 1992, “It was boring and people cut back to save money,” said Pettit.
“This is not a problem-solution business,” said Pettit. “When you research you have to focus on exciting the consumer and make that our goal. This is one of the few categories that people don’t use up what they buy.”
Pettit added, “They don’t check to see if they have seven months of lipstick left before they buy another.”
“Color continues to be an area that people are interested in,” said P&G’s Pritchard. “I think it is just the tip of the iceberg and there will continue to be an explosion of self-expression.
“The end of the decade tends to trigger major changes, and now we are nearing the millennium,” noted Pritchard. “I think we will see a heck of a party in 1999. I think it is a good time to be in the industry.”