Category Report: Cosmetics

The beauty industry today has escalated to a cacophony of messages, and from the consumer's point of view it's getting louder, marketers say. Brands like Skin Essentials and Skin Effects are dueling for dollars by staking out their sections in drugstores to tout their physician's approval status. Dove is expanding its "Campaign for Real Beauty," taking a stand on aging and female strength.Meanwhile, Neutrogena is plastering its share of the aisles with pegboards sporting headers that tout its brand in Spanish and announce discounts on select Latin music CDs. Not to be outdone, Pantene is looking for more shelf space to park its latest line: Shampoo designed to address Hispanic hair challenges, and a separate formula aimed at helping African-Americans stop breakage.And, of course, the clutter isn't limited to mass retailers. Manufacturers also compete in department stores, beauty supply stores, salons, boutique shops, grocery stores and natural food outlets. Every human being on the planet falls into the target audience somehow, whether it be for hair care, skin care or cosmetics. And the usual channels aren't holding up under the weight."The overall theme right now is that most manufacturers are rethinking the amount of money they spend on traditional consumer advertising," says Jeffrey Carducci, national sales director for Derma e in Aliso Viejo, CA. "With the technology that is out there now, all manufacturers need to look at how they reach consumers: display activity, floor advertising, in-store radio and TV networks, e-mail blasts, text messaging." Even Procter & Gamble Co. said in June that it will allot $2 billion in retail marketing funds to give point-of-purchase strategies the same clout as advertising.Ironically, this intensity is encouraging many visual merchandisers to shut down and draw inward. Take Tim Tareco, vice president of global visual merchandising for MAC Cosmetics and Sean John Fragrance, a division of New York-based Estee Lauder. "To be completely honest, I don't follow the trends of what's happening at other counters because I don't necessarily feel the need to fall in with those trends. We have set fixtures and displayers that are consistent that we redo inserts for with each new collection or for new permanent product launches," he says. MAC is taking the nonpromotional route, marketing its products more through models and retail events as opposed to other avenues. Tareco is in solid company, as many insiders say they are trying to break away from the circus and get back to a conversational tone with consumers. "You have to find ways to get through the clutter to reach consumers," Carducci says.Matthew Llewellyn, director of visual merchandising for Bobbi Brown Cosmetics, New York, is in the same boat. "The biggest challenge right now is creating focus and clarity because there are so many different products out there," he says.Step #1: Tighten Your PackagingCosmetics and skin care represent different animals when it comes to mass merchant P-O-P. Cosmetics generally receive a 3- to 4-foot bay, giving manufacturers their own sections to create a store-within-a-store to fill with plastic shelving units, model shots and text. Skin care, on the other hand, receives a 20- to 40-foot run, with everyone on the shelf together. Each brand sets its block, but the tools to differentiate it from its neighbors are far more limited, points out Carducci.He takes comfort in the fact that 85 to 90% of all products sold are sold from the shelf and not necessarily from a display. "So you've got to make sure that your packaging is right, that it communicates all the information the consumer needs," he notes. "After that you can sit back and take a look at the other areas where you sell product, but if you don't get the shelf right you're never going to be able to be approved to go into those display activity areas."It's part of the advanced education Carducci is acquiring as he expands his product's horizons from natural food stores and vitamin shops to the Walgreen's and CVS's of the world. He knows he has about three seconds to catch the eye of a passer-by in the aisle and that brand blocks speak louder than radio ads. For that reason, he's rolling out an entirely new packaging strategy in the second half of 2007. "Once you get into a Target store, for example, that doesn't have beauty advisors or store clerks that can help consumers, you have to find ways for your packaging and display materials to sell a little bit more. It has to work harder," he says.Previously, Derma e tried to merchandise its packaging according to segments, so Carducci had different color schemes instead of a cohesive look on the shelf. Studies also pointed out that the brand didn't look natural enough to convey its core message to consumers, and that's an important move when broadening from a specialty audience to the masses -- so vital, in fact, that the company isn't content to say it on the box and hope for the best. Instead, it's arming store personnel with tri-fold brochures to educate them on both the natural products category in general and Derma e specifically.Sally Beauty Holdings LLC, headquartered in Denton, TX, applauds any effort at P-O-P education. "For us it's all about conveying why I'd want to buy this brand as opposed to another brand -- the features and benefits. Our environment is very much self-service," says Arthur French, who as senior visual merchandise manager is the chain's planogram expert. He personally prefers to see interactive displays over text, as a video showing how to apply a product gets the message across far more effectively than a six-page brochure clipped to the shelf. "It's simply about convenience," he says.As for counter units, Carducci is a fan of acrylic molds equipped with headers because they convey a more upscale appearance. The acrylic also easily accommodates educational print materials and the occasional tester to help tell your story. Sure, it's a cosmetic staple, but Carducci says he's more than eager to add it to the skin care aisle where practical.Carole Krupnick, CEO and owner of Posner Cosmetics in Butler, NJ, achieves that same visibility on-shelf via blister packaging or open window cartons. She relies heavily on this method because of how quickly and easily it helps shoppers translate how the colors match their skin tones. This way, whether Posner is part of a substantial display or hung on a pegboard wall, the consumer has a wide variety of product choices.Bobbi Brown's address in luxury retailers such as Nieman Marcus, Nordstrom and Bloomingdale's naturally affords this cosmetics manufacturer a much larger footprint than what mass retailers offer. Llewellyn makes sure every inch of it packs a punch by focusing the in-store message on one central theme or product. Take, for instance, the brand's Shimmer Brick blush line, for which he created a tower at the counter to play off the word "brick.""When we do a product launch, we make sure it's blown out all the way, from visuals to duratrans, to create a clear statement. All the customers see is one product," Llewellyn says. And the strategy doesn't necessarily sabotage sales of other products in the brand, particularly when the unified message is SPF during summer or moisturizing in the winter. "It helps the customer understand their needs, and all the products work together. So focusing on one product helps get the message across to the others," he explains.Step #2: Put Your Products to the TestWhen you're MAC, stocked with a higher percentage of on-site makeup artists than most department store competitors, testers are a way of life. Such a service-oriented approach means 90% of on-the-spot application experiments are done by experts, who make sure the product isn't abused.That's why Tareco has no qualms serving up all of his product lines in linear displays. "We don't get boutique-y. If you are looking at lipsticks -- and we have 174 shades -- you're looking at one displayer," he says. He divides the products first by texture, then groups them by shade. "We break it down to the most simplified way a customer shops," adds Tareco. The second type of tester groups collections by color, producing a new set every four to six weeks.There's no question testers at department stores act as a powerful consumer magnet, drawing folks over to interact with the beautiful shades and textures. Big box stores certainly want to tap into that attraction, but hygiene concerns in a self-service environment have put the burden on brands to develop new shelf designs that solve this hurdle. The perfect solution remains elusive, although manufacturers are coming closer every season.Elizabeth Arden exper-imented this spring with its fragrances, working with compacts of solid perfumes locked in a plastic tray unit and clipped using a bracket to shelves at Target. Carducci prefers to provide foil pack samples for store personnel to pass out "because from a sanitary standpoint, they are much cleaner than giving somebody a jar that multiple people could be using."Krupnick bypasses testers altogether in favor of comprehensive color charts. In some venues, it's on display, while other locations choose to use it as a hands-on tool behind the counter. This action requires, however, that the color dollops be true to the actual product.Step #3: Play the NicheIt's common knowledge that minority markets are growing at an amazing rate. According to Packaged Facts Market Research Reports, sales of hair care, skin care and color cosmetics for ethnic markets reached $1.9 billion in 2006. Timothy Dowd, a senior analyst with the Rockville, MD-based research group, predicts ethnic-specific products will surpass the $2.5 billion mark in the next five years.And yet, pitching products exclusively to one group at the shelf level is still rare today. "Even if you look at the major players, I'm not sure any of the mainstream skin care lines have a brand specific to a minority group," Carducci says. "They have products in their overall franchise that lightens skin or fades it, or offers other benefits that appeal to different minority groups. But Neutrogena and Aveeno don't have product lines or platforms for them."Most brands, from MAC to Derma e, are content to get their all-inclusive point across by putting models of all races and ages on their packaging. Even Posner, steeped in its African-American heritage, does not use the words "African-American" on its boxes. Instead, the packaging encourages sales across various ethnicities. "We do have people purchase our products who are not African-American. I, in particular, wear one of my brand new products in the fair category because my skin has a yellow characteristic that matches it exactly," Krupnick points out.The statistics for men's products are even more inviting: Euromonitor International put the sales of men's grooming products in the U.S. at $4.8 billion in 2006 -- a 7% increase from the previous year. Chains like Sephora report that shave remains the top category, but specialized skin-care products are picking up steam. And that's with many experts still labeling this demographic a slow growth one.To further stir the pot, celebrities like Johnny Depp and Toby Maguire have made eyeliner look cool, coining a new word in the hip lexicon: "guyliner." It was enough to convince smaller companies like Male Species, KenMen, 4VOO and Jean Paul Gaultier to plunge into the makeup for men waters. So far, however, no one else has jumped in after them."I really think it's a tough sell, especially in a mass market," says Llewellyn. "If a man is looking for an eyeliner, he will go to somebody he already knows and trusts." The same is true for MAC, where male makeup artists are encouraged to wear makeup if they choose, but the products themselves aren't designed for men. The closest this brand has come to advertising to men was a poster of an unshaven man wearing lipstick last year, says Tareco. Even then, the motivation for the androgynous statement came from the manufacturer's all ages, all sexes motto.Likewise, Bobbi Brown has opted to promote a unisex skin care line, although companies such as L'Oreal, Clarins, Clinique and Dior Homme have chosen to roll out separate lines for the male consumer. Yet no matter which philosophy a manufacturer chooses, the packaging will make or break that investment, experts say.In a nutshell, men are attracted to simple packaging that is almost apothecary in appearance. That's why About Face 4 Men, headquartered in San Diego, sticks to the standard black and white colors, although owner and founder Matthew Backer says blues, tans and greens have been known to work in the male market, too.Even the containers must be relatively basic and easy to use. Backer must use a particular plastic that won't interfere with the active botanicals in his formula, but that doesn't prevent him for using snap tops, flip tops, pumps and spray misters.He's also doing away with exterior boxes to package his bottles, mainly because the extra packaging costs more without demonstrating the product. "In a department store, the packaging adds to the romance of the products. But our main audience is in salon retailers, where guys would rather just pick up the bottle and read exactly what the product does. They don't want to have to open something to see what it's going to be," he says. Testers can be as simple as an open bottle, mainly to prove the product doesn't smell too perfume-y or feminine.But perhaps the most refreshing aspect of marketing to men is that traditional P-O-P approaches work best. For instance, Backer relies on 8-1/2- by 11-inch counter cards featuring tear sheets from magazine media coverage, and tri-fold brochures touting masculine images.The copy should address male-specific solutions, with key words like "razor burn relief," "sports facial," "executive facial" and "anti-aging." "On our bottles we don't really target skin types because men are less aware of their skin types than women," Backer says. "But we make sure that the bottle itself has clear, concise instructions and benefits."We teach our salon professionals in cosmetology school to keep bold, masculine and simple in mind before they go into this business," he adds. "It's an effective way to reach the male audience. They are getting more sophisticated in what they expect from their products, but they don't need it to be frou-frou in its presentation."

Category Report: Cosmetics

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