Cosmetics Brands Focus on Ethnic Marketing

As the demographic face of the United States continues to change, marketers of health and beauty care products are seeking new ways to target the fastest-growing segments of the population. Some are co-positioning existing products to appeal to growing ethnic groups and niche markets, while others are developing new products aimed at these segments.Consequently, the face of P-O-P is changing. Some marketers, for instance, are adding a bit of class to displays for mass accounts, while others have turned to new display materials and interactivity to get attention in-store.According to the U.S. Census Bureau, the overall population of the United States is projected to grow by 5.1% -- from just over 285 million to nearly 300 million people -- from 2004 to 2010. However, that growth will not be evenly distributed across all ethnic groups. Three principal ethnic sectors make up the fastest-growing segment of the U.S. population -- people of Hispanic, African and Asian origin. Together, these three groups are projected to grow at a rate of 13.5%, from just over 84 million to more than 95 million people in 2010.According to a report issued by Packaged Facts, a publishing division of MarketResearch.com, New York, these groups spent about $1.5 billion on ethnic-specific products and an additional $6 billion on general-use HBC products during 2003, accounting for some 12.5% of total HBC spending, estimated to be over $60 billion by Progressive Grocer and other sources. Total spending by these ethnic consumers on health and beauty products is expected to increase dramatically over the next few years.Reaching out to Ethnic GroupsOne of the first companies to target African-American women was Posner Cosmetics of Butler, N.J. "Posner has been manufacturing ethnic health and beauty aids since the 1960s," says Karen Chambers, director of marketing. "The brand was a pioneer in hair care for African-Americans and became one of the leading cosmetics brands for women of color in the 1970s," she says. "Its cornerstone is the face makeup category with fashionable colors in eye, lip and cheek products for ethnic skin tones." For the first quarter of 2004, Posner launched Posner Cover Crme, a unique maximum coverage concealer for camouflaging extreme discoloration and skin imperfections. P-O-P plays an important role in the introduction of this product."We are pre-launching new Cover Crme in a counter pre-pack," Chambers explains. "Retailers were so excited about this item that they wanted to preview it on counter before launching it on their walls in the spring. The counter graphics will show the product's dramatic before-and-after results and boldly display the unique product features and benefits." In addition to Cover Crme, Posner is adding educational merchandising graphics to its basic cosmetics wall: Dynamic model images and shade selection information will help consumers find the products that are best for their skin tones. "Posner products are sold in chain drug, mass merchandise, and beauty and barber supply stores," Chambers says. "We have a significant wall presence in most of our stores, and our visual look for the most part is consistent. We do have to comply with each store's merchandising specifications, but that usually just involves a few fixturing changes or adjustments in the dimensions of the graphics."P-O-P is one of the company's primary marketing tools. "We are constantly experimenting with new merchandising looks, using more eye-catching visuals and providing more informative graphics in order to continue making our displays more shopper-friendly," Chambers notes. Posner does not, however, ignore other promotional media. "As an ethnic brand, we were one of the first to do a multimedia Web/magazine program, which we did with our largest chain last year," says Chambers. "We also do lots of grass roots event tie-in programs with our retail and media partners. I think that the large general market brands have always done integrated marketing programs, but very few ethnic marketers have done successful integrated consumer programs, which is why we've made it a top priority."Reflect True Custom Beauty, San Francisco, tried a custom approach to reach out to ethnic groups. The company uses a combination of service and technology to market a line of color cosmetics that are custom-formulated one at a time for each individual customer. "Because we are so focused on custom formulation, there is no need to reach out to specific ethnic groups because each customer can design the look that works best for her regardless of her skin tone or color," says Matthew J. Doyel, vice president, marketing. The company's newest product is a line of custom liquid foundations. "We started out in 1999 as strictly an online marketer," Doyel notes. "We first went into stores in November 2000, opening a 'Learning Laboratory' in San Francisco to test various types of displays and see what worked best. After six months, we moved to Northbrook Mall in suburban Chicago and were recently invited to set up a display in Marshall Fields on State Street. With our attention-getting interactive custom design capabilities, we like to say that we have the ultimate P-O-P display."P-O-P Materials Evolve"As for materials, we're using a lot of the same ones we used to, just in more innovative ways," says Posner's Chambers. "Corrugated displays, for example, have come a long way, and we've seen vacuum-formed pieces that now have the look and durability of molded plastics. We have a lot more options now and we are continuing to explore them."With the help of new materials and more options, the marketers interviewed believe P-O-P in the cosmetics industry can expand beyond vacuum-formed trays and massive cosmetics wall units.Kim Carrera, category manager, hair care & styling for Goldwell Cosmetics USA, Linthicum Heights, Md., says she is noticing more and more interactive displays. "[Shoppers] are no longer static," she says. "People are in such a hurry these days that [marketers] need to do something to stop them and grab their attention." Furthermore, mass stores are taking a lesson from class stores, according to Alison Chaltas, a principal of Interscope, a brand consulting company based in Southport, Conn. "There is an effort on the part of cosmetics brand marketers to bring a department store atmosphere to mass merchandise outlets like Target and CVS," she says. "We're starting to see better signage, more kiosks, and even human stylists in some of the better mass merchants."The Latina MarketAnother company that has been successful in reaching out to a specific ethnic group is Zalia Cosmetics, New York, which was founded by makeup artist Monica Ramirez. Zalia developed a complete color cosmetics line specifically for the Latina face. Zalia recently took the first step toward national distribution when it signed a retail partnership agreement with Columbus, Ohio-based Victoria's Secret, one of the world's leading beauty product retailers. In August, the company began a four-city rollout with Victoria's Secret, beginning in Miami, considered by many to be the epicenter of the nation's Latin community. The rollout continued through September with introductions in Los Angeles, Dallas and finally New York. At each of the scheduled launch events, the company invited consumers to experience the Zalia product line by offering free makeovers by Ramirez herself, who made a personal appearance at each of the Victoria's Secret stores, accompanied by her team of talented makeup artists. The appearances were complemented by a series of Latin-themed music and entertainment events at shopping malls. "We are thrilled to offer Zalia Cosmetics in select Victoria's Secret Beauty stores," says Sherry Baker, Victoria's Secret Beauty executive vice president and chief marketing officer. "Victoria's Secret is increasingly becoming a total beauty destination, and Zalia will be a wonderful addition to our already strong color cosmetics portfolio."Rather than targeting one specific ethnic group, some cosmetics groups are reaching out to those who live in an urban environment, many of whom are of Hispanic, African or Asian descent. The China Glaze division of North Hollywood, Calif.-based Worldwide Cosmetics, for example, is launching a new line of nail polishes named Urban Chic, which is designed for professional application and sold exclusively through spas and salons. P-O-P displays developed specifically for Urban Chic consist of a 3-D header mounted on a brushed aluminum frame. One 72-piece display holds three each of 24 different shades. Two individual 36-piece displays contain three each of 12 shades -- one filled with light tones, the other with dark. Both the larger and the smaller display are pre-assembled, requiring only insertion of the header. "I've seen too many instances where displays requiring assembly wind up in the trash instead of on the counter," says Donna Louis, vice president business development. "We try to keep it as simple as possible."Engaging MenWhile overall U.S. HBC sales remain largely stagnant, the men's grooming products segment of the market does appear to be exhibiting at least some growth. A report issued by Packaged Facts states U.S. retail sales of men's grooming products totaled approximately $7.7 billion in 2003, up only 2.2% over 2002 sales. However, Packaged Facts forecasts that sales will grow approximately 4% during 2004, fueled largely by new product introductions.And along with new product introductions comes new merchandising. P-O-P is a very important part of the marketing mix for Nivea For Men. "Men are familiar with the brand," says Catherine Lair, director of marketing Nivea For Men at Norwalk, Conn.-based Beiersdorf Inc. "They have seen their wives and girlfriends use Nivea products for years. The displays we use have the same physical structure as the ones we use for women's products, but the graphics are stronger and darker. We are also making increased use of integrated marketing, interspersing the same graphics throughout our TV and print advertising and our in-store displays, for example, to give everything the same look and feel. Consumers today are bombarded with so much advertising that it's important that they be able to instantly associate the message with the brand."Like the company's line of beauty products for women, Goldwell's new men's line will be sold exclusively through salons. The company has developed entirely new in-store displays for its new line of men's products to complement its current lineup of displays geared toward women. "In order to get our displays into the salons, we give them free to the retailer with purchase of our products," says Carrera. "We also try to provide displays that are already assembled, or at least easy to assemble, to make sure they get used."Although Goldwell does not use either licensed properties or celebrity spokesmodels, "We do use celebrity hair stylists," says Carrera. "They are more relevant to our audience than musicians or actresses."The largest single segment of the men's category is, of course, shaving products, which account for some 46% of total sales. This is followed by men's fragrances, dominated by upscale brands sold primarily through department stores, at 25%, and deodorants, sold mainly through mass merchants, at 19%. Hair care (7%), skin care (2%) and bath and shower products (1%) positioned exclusively for men total the rest of the category.In spite of the opportunity for growth, which continues to remain elusive for many brand marketers, the men's market does offer some interesting challenges. "The men's market is getting a lot of talk as men grow more comfortable about discussing things like grooming, but it's still difficult to translate that talk into action," cautions consultant Chaltas of Interscope. "The problem is that retailers don't really know how to get men into their stores. When they do shop, they usually find themselves either in the shaving products section or looking very uncomfortable in the women's cosmetics section."Don Montouri, Acquisitions Editor for Packaged Facts, agrees. "Outside of department and some specialty stores, there is no distinct section for men's grooming products," he says. "During visits to several major drugstores and mass merchandise outlets," he adds, "we found even the most innovative new products in the least favorable shelf locations, either well above eye level or practically on the floor."The Metrosexual QuestionIs the term "metrosexual" as much of a buzzword as it was a year ago? "I don't think so," says Chaltas. "The problem is that it is largely perceived as specific to major metropolitan areas. The further away you get from big cities, the less important it becomes."Lair agrees. "The term is starting to go out of style," she contends. "Men don't really understand what it means because it was created by the media in the first place. It is also somewhat specific to the New York metro area."Regardless of the correct terminology, Lair wholeheartedly agrees that the men's market has huge potential as more men become aware of the need for skin care. "For example, men are now more aware of the need for protection from the sun," she says. "They are actually looking at themselves in the mirror and becoming concerned with the way they look, including the condition of their skin."Lair also sees a possible backlash against extreme forms of skin treatment such as Botox or cosmetic surgery, for example, and a shift in the current attitude of "No pain, no gain." This is especially true of men today, she contends.Goldwell's Carrera agrees that the market for men's grooming products is large and growing, but thinks that the term "metrosexual" is still important. "It absolutely defines the market we are trying to reach with our new line of men's shampoos, styling gels and styling sticks that we launched during the fourth quarter of 2003 and the new styling cream that we plan to launch later this year."Carrera explains: "Our customers tend to be somewhat older, more mature and live in major metro areas. They tend to be pretty sophisticated, and their appearance is really important to them. This applies to men as well as to women."Current TrendsInterscope's Chaltas does not accept the idea that the "Punk Look" may be returning. "Just the opposite," she contends. "Gothic and Grunge are out. The new look is what I call 'messy preppy.' It's khakis that are slightly wrinkled, oxford shirts not tucked in and trousers that are just slightly too long. It's an attempt to fit into today's society but still make a personal statement of style."Goldwell's Carrera sees a return to the styles of the 1980s. "We're seeing more curl and more natural wave as opposed to the straight styles of the last few years," she says. "In fact, we recently launched two new products specifically designed for softer, curlier hair."Lagoom, launched in March, is a volume gel designed to give softer hair a fuller look. Move Control, introduced in July, is intended to help maintain soft curls and keep them from being "crunchy." The company has developed new P-O-P displays for both products.Montouri of Packaged Facts sees greater penetration of professional products into the consumer marketplace as people become more style conscious. "This may prompt brand marketers to introduce more upscale brands in order to keep their customers when they are ready to upgrade to something better than what they are currently using," he says.

Cosmetics Brands Focus on Ethnic Marketing

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