Cosmetics and Fragrance P-O-P: Merchandising Health & Happiness

Beauty products have always been promoted as being good for the body. But now P-O-P marketers are proclaiming that they're good for the soul, too.Today's hottest trend -- in both fragrance and cosmetics -- is to offer healing formulations that don't just preen, but pamper. Overstressed consumers who can't afford vacations at exclusive health-oriented spas are seeking stress reduction and spiritual renewal in a bottle. This quest is fueling explosive growth in aromatherapy, bath-and-body products, and beauty treatments fortified with vitamins and herbs."With the year 2000 almost here, there's a whole underlying nervousness, a millennial anxiety," says Sylvia Erdman, senior director of marketing at Guerlain Inc., New York. "People are feeling so much stress, and at the same time, the population is getting older. There's a concern with health and living longer. People think that if they can be more calm, they'll live to be 95."Adds Larry Freeman, chairman and founder of Los Angeles-based Freeman Cosmetics, "The whole emphasis on wellness is something we're seeing not just in the U.S., but all over the world. It's been building for a while with day spas and salons, and now it's a major, exciting trend in our industry."The Wellness WagonA key weapon in the wellness arsenal is aromatherapy. Used for centuries in other countries, this holistic approach to healing aids both body and mind as patients inhale the combined scent of herbs and other natural ingredients. In the U.S., aromatherapy has finally shed its "New Age kook" image, and mainstream cosmetics and fragrance companies are entering the market.So far, it's been a bonanza for Freeman Cosmetics, whose hair and body care products come in both energizing and calming versions to enhance customers' moods. Says Freeman, "Our whole company is based on botanical and natural ingredients, so in that sense, we've been at the forefront of aromatherapy for years. The idea is that products that work on your olfactory sense make you feel better so you look better."According to Tom Donovan, director of display development for New York-based Coty Inc., "Aromatherapy has been around forever in Japanese tea gardens. There's even a new trend emerging to replace coffee bars with tea bars where people can enjoy a spiritual moment as they relax with a cup of tea. We've carried that idea over into our Healing Garden aromatherapy products; one of the four scent categories is a green tea therapy that promotes enlightenment."This focus on health and relaxation extends to the Healing Garden permanent display, which creates a "garden potting" environment with sampler kits in watering cans and other garden-related motifs. The line's products, which include candles, incense sticks and pillow spray, are displayed on modular shelves that can be adapted to fit one-foot to four-foot wall increments.The display also builds on the association between human wellness, natural products and environmental concerns, which was popularized several years ago by Origins and other upscale companies. Like the Shaker-style cabinets in Origins' freestanding and department-store sites, Coty uses natural wood to complement its product presentation."It's a traditional mass shelving system, but it has all-wood, natural pine fronts and a wooden lattice background," Donovan says. "I think it may be the biggest use of natural materials at mass, and it's part of a bigger trend toward more natural looks and materials."Healing Garden products have been so successful that Coty is expanding the line to include footcare products such as energizing peppermint lotion and relaxing lavender soaking salts. "It's a natural extension -- people are stressed, and their feet hurt," Donovan says.With more and more cosmetics companies jumping on the aromatherapy band-wagon, however, there is potential for confused customers and eventual backlash. "People are starting to call things aromatherapy that really aren't, such as products to which they've added a single-note fragrance," says Guerlain's Erdman. "But true aromatherapy is very serious and complex and involves specific combinations of fragrances to get certain results."Related to the aromatherapy phenomenon is the rise of the bath-and-body category, which began several years ago with The Body Shop's stores filled with products celebrating the joys of a good, hot bath. The company's success is due partially to its open-sell strategy, which put colorful, pampering products out where customers could get at them. In the last few years, it has spawned competition from other freestanding, open-sell shops, including H2O Plus and Bath & Body Works, and from traditional mass and class cosmetics companies.For example, Freeman's aromatherapy products include bath and body items like shower gels. Also, Coty recently expanded its Calgon Body Mists line to include gels, lotion and dry oil spray. The company is marketing these products with the same types of modular displays it uses for Healing Garden, but has adapted them with fluorescent colors and a wave design that alludes to the products' association with water. In addition, Chanel moved beyond the classic department store offerings of soap, lotion and dusting powder last year when it introduced its No 5 Essential Bath Oils, a dual-purpose bath and body oil."It's a fabulous product that combines fragrance with a tri-phase bath oil," says the New York-based company's senior vice president of marketing and sales, Jean Hoehn Zimmerman. "You can use it to take a relaxing bath or apply it directly to the body afterward to soften the skin with three essential oils."Many other treatment products capitalize on the current rage for antioxidants such as ginseng and vitamins A, C and E. Chanel, for instance, has fortified each of its fragrance, color, body, skincare and suncare products with one or more antioxidants.Freeman entered the antioxidant arena recently with six products in its skin+vitamin C complex line. Aimed at women between the ages of 18 and 35, the line has a higher price point. It also has a more upscale presentation, as it's the company's first-ever boxed group of products."We adopted this strategy to appeal to a slightly older demographic," explains Freeman. "We also came up with creative P-O-P that uses a mix of displays. We find that drugstores want counter displays, supermarkets want floorstands and both want shelf organizers. So, because the customer is always right, we made all three."Teen Market GrowthBesides wellness, one of the biggest stories this past year has been the continued growth of the teen market. With $1.8 billion in annual spending power -- 80 percent of which is disposable income -- teens are one of the fastest growing market segments, says Nicholas Longano, vice president of marketing for Cosmar Corp., New York."This category is incredible. I'm often lost for words when I think about how significant it is," says Longano. "But the 12- to 18-year-olds have been ignored in the past by marketers who concentrate on the 18- to 34-year-old age range. We realized this a couple of years ago, and we've been very successful in filling this niche because we really listen to what teens want and need."Value and funky products with attitude are what teens crave today. They also want packaging that lets them see exactly what shade they're buying -- not a printed approximation of the color. In response, Cosmar has launched an extensive collection of beauty products that reflect the latest trends in wellness and color, all priced at $3.95 and packaged in see-through materials.The company's Nat Robbins make-up division includes products with names like "Fat Boy" and "So Winkable" for its mascara and a lip gloss fortified with vitamins A, C and E. Cosmar also built on its successful Press & Go nails with the launch of Pro10 artificial nails and nail art.The company's Dana Perfumes fragrance division continued this approach recently when it introduced fetish, a sophisticated scent with an upscale feel and distinctive packaging that allows it to be clipped onto belts or shirts as an accessory or displayed on a dresser. Sales results led the company to expand the line to include nail art and cosmetics.When the fetish line launched in mass merchant and drugstores, Cosmar distributed countertop displays that showcased products and included a tester. The display base had room for 20 scent cards with foil packets of liquid product so teens could experience both the scent and feel of fetish.Upscale cosmetics companies understand the importance of the teen market as well -- if not for immediate sales, then for building their future customer base. Guerlain's Odelys line is formulated specifically for acne-prone skin and contains ginkgo and vitamins. Chanel has advertised in Seventeen magazine for 30 years in order to promote brand awareness and influence buying decisions after young women leave their teen years."It's a real marketing challenge," says Chanel's Zimmerman. "The teen market is growing in importance, but so is the over-50 market. For a company like ours that appeals to multiple generations, the problem is to make each age group feel you're appealing specifically to them, without making other groups feel left out."Chanel has responded on the P-O-P front by making its displays more approachable and less intimidating. In addition to cleaning up its counter space, it has freshened and lightened up its P-O-P by using lighter, more translucent colors in addition to its traditional black and gold color scheme.Diversity Remains StrongIn addition to the teen market, diversity continues to be a key niche in the U.S. cosmetics and fragrance industry. It's an area in which many international companies are at an advantage, having addressed the needs of multiple cultures for some time."As a French company in business for more than 100 years, we've been international for decades," says Guerlain's Erdman. "We do a very big business in Japan and Hong Kong, and we're already serving multi-ethnic clients in Europe. We'll bring that knowledge to the U.S. in the next year or so when we expand our foundation shades for Asian, Latin and African-American skin types."According to John Devine, chain drug sales manager for Cincinnati-based Procter & Gamble Cosmetics, addressing diversity within an existing product line is a better approach than creating a different line for each ethnic or racial group. "Niche marketing does not work effectively," he says. "While there needs to be expanded assortment for heavily ethnic locations, most retailers generally prefer implementing planograms that meet the needs of a majority of their consumers."Cosmar's Longano agrees. "We're hearing more and more, especially from African-American and Hispanic consumers, that they re not interested in lines just for them," he says. "They want the same as everyone else, in shades that are right for them. That's why we're positioning Nat Robbins as a line for everyone, with updated shades and an ad campaign this spring featuring four models: African-American, Hispanic, Caucasian and Asian."State of the IndustryDespite the enormous success of all wellness categories and various niche markets, 1997 was a tough year for the cosmetics and fragrance industry. One reason was an unprecedented number of mergers and acquisitions throughout the business community.The most serious effect of this climate, many manufacturers say, is a loss of creativity. "Consolidations have left no time, money or energy to be creative or do research and development," Freeman says. "That was a major problem in 1997, but it will be a major opportunity in 1998."Newly consolidated companies are also vulnerable to new competitors. Artists' cosmetics lines like MAC and Hard Candy have made inroads at department stores, while freestanding stores like Bath & Body Works are siphoning customers from mass outlets. In addition, sales of private-label fragrances, bath gels and other products at non-traditional outlets including Foot Locker, The Gap and EddieBauer, are grabbing consumers away from both the mass and class markets.One reason for the non-traditional market's success is its price points, which play on consumers' love of impulse buys. As Coty's Donovan says, "There's much less commitment because of the cost and because you're not buying something highly personal, like a traditional fragrance."Another factor in these markets' success is their combination of unique products and accessible P-O-P. "When a teenager goes to a department store and pays $14 for Hard Candy, that's a call of desperation," says Cosmar's Longano. "She's saying, 'I want that shade but I can't find it at mass.' We as manufacturers are responsible for the success of non-traditional outlets because we haven't given consumers what they want in an environment they're comfortable with."For Coty's Donovan, the environment needed to promote consumer comfort is one that turns shopping into an experience. "You need to have comprehensive P-O-P that includes testers, information cards and year-round trial sizes. When you have all that, people will spend time at the display -- and that's crucial because of the investment involved."While other industry experts agree a comprehensive strategy is in order, they caution manufacturers not to go overboard or they'll lose consumers' attention. "Whatever we do at the point-of-sale needs to be a succinct message," says Procter & Gamble's Devine. "Women are much busier than in the past, with greater percentages working. They want to be able to make the most informed decision in the least amount of time. Therefore, information presented in stores should be relevant, but minimal."Differentiation Determines DestinyMany manufacturers responded to the challenges of last year by revving up the trusty gift and promotion machine in order to grab attention. By Christmas, many department store cosmetics sections were heaped higher than usual with giveaways and gift sets. With so much clutter clamoring for attention, however, specific brands got lost in a haze of consumer overload and confusion.Cosmetics and fragrance companies still believe they must maintain expensive giveaways in order to keep up with their competitors."Differentiation is the word on everyone's lips these days," says Larry Freeman. "We as manufacturers are the ones who can help retailers do that, but it takes creativity. Fortunately, I think you'll see less emphasis on consolidation this year and more on good creative, especially P-O-P."Many consolidated companies are already revamping their stores, and manufacturers expect spending on P-O-P to increase. Says Procter & Gamble's Devine, "In the chain drugstore industry, consolidation is creating a better shopping environment for consumers. Rite Aid, CVS and Eckerd are on an aggressive remodeling program that's significantly improving the cosmetics category. And consumers are responding because remodeled stores are showing strong category growth."As for P-O-P, the mass market will continue to see more stores within a store and even separate sections for certain brands. Says Cosmar's Longano, "If consumers are loyal to a certain brand, they want to be able to go to one shopping environment or section that has everything in the line instead of going for nail products in one area and bath gel in another. Retailers are starting to understand this, and they're giving us four, five or even six feet of space for a fetish section versus one foot last year."In some cases, Cosmar is building custom selling areas for retailers that provide self-sufficient environments for the company's products and a total shopping experience for customers.There are two persistent P-O-P problems that manufacturers can expect to face over the coming year. One is the overuse of risers by companies hoping for placement on the top shelf, a practice that frustrates retailers who must stock the lower shelves with ill-fitting or inappropriate displays. The other is sampling, a procedure that leaves a mess and extra maintenance for store clerks.For both the mass and class markets, tailoring displays and installations for specific retailers and even specific stores is becoming part of the norm. "With P-O-P more important than ever before, there is even more demand to tailor or differentiate whatever we do for different retailers or traffic patterns," says Chanel's Zimmerman.Open selling will also remain a force in marketing, particularly with the success of the non-traditional outlets that present products in easily accessible floorstands. "It's really important for fragrance," says Coty's Donovan. "We spend all this money to advertise our brands, but then customers can't get to them because they're in locked cabinets. We need new P-O-P that makes fragrance much more accessible."For its Nokomis fragrance launch last year, Coty sought to improve access with a countertop display that holds 15 products and a tester. As for Cosmar, it launched its Shades by NaVy fragrance this quarter with two countertop displays that hold four sizes of cologne and body mist; an endcap with riser cards, cubes and shelf talkers; and 15 million magazine scent strips and sample cards.In department stores, most manufacturers are maintaining a balance between open selling and traditional counter storage. "It's very good for customers who get intimidated, but open selling is not the whole answer," says Guerlain's Erdman. "With self-service, you tend to stick with what you always buy, or you may try something new that's not right for you. There still needs to be a beauty consultant there to introduce new products and explain application techniques."What Does the Future Hold?Over the next year, most manufacturers expect the wellness trend to continue and even expand, with such changes reflected in P-O-P designs and materials.One area ripe for expansion is gardening-related items. Aging baby boomers are turning from vigorous sports to the leisurely pleasures of growing flowers and vegetables, and companies like Crabtree & Evelyn are addressing their needs with lotions and other formulations to soothe weed-battered hands. Promotional materials have included countertop displays as well as educational cards, brochures and foil-pack samples.

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