Cosmetics Come Out to Play

Just as mascara blurs in the rain, so do the mass and prestige cosmetics channels, the demographic profile of the "typical" shopper, and the price/quality expectations of target consumers. To respond to these challenges, both high-end and mass cosmetics brands and retailers are trying to reach shoppers through innovative vehicles such as hands-on displays and virtual make-up mirrors. For example:Walgreens and Walmart are testing inline displays with facial recognition technology that let shoppers "try on" different shades of make-up;Target redesigned its endcaps to encourage browsing of cosmetics and beauty essentials; andEste Lauder is testing a self-service counter in department stores so shoppers can experiment without the help of store personnel.Spending in the $3 billion cosmetics category was up in 2010 compared to last year; SymphonyIRI Group reports a 6% increase in dollars and a 2% increase in units sold. "While the core shopper of cosmetics is primarily a woman age 25 and above," says Karen Grant, an NPD Group analyst, "we are seeing that younger women are also entering the category at earlier ages than in prior generations. Today, girls as young as 8 are reporting [using] some cosmetic products on a regular basis." And that age profile doesn't show much difference be it a mass or department store. Grant notes that two-thirds of women say they consider beauty products found at mass merchandisers and drugstores to be as good as products in department stores. "Mass and prestige markets have completely blurred," says Sonia Kashuk, founder of New York-based Sonia Kashuk Beauty. "The only differentiation that separates the two, from my perspective, is the service element." In today's economy, she says, it's harder to justify paying the prices for prestige cosmetics. And while Nielsen reported that even during the recession, "people continue to place importance on looking good" (Nielsen Global Online Survey, first quarter 2010), the survey also showed that for fully 82% of North Americans, price was the key determining factor in beauty product selection.With blurred channels, younger shoppers, and price factoring more heavily into shoppers' decisions, brands and retailers are exploring in-store designs and using technology and a mix of marketing tactics to reach cosmetic consumers, spur growth and increase shopper traffic.Department and Display MakeoversAllowing consumers to "test and play" seems to be the mantra for many brands and retailers. Blaine, Minn.-based Aveda recently redesigned its make-up display unit -- featured in all of its stores and most Aveda salons -- to function as a "play station" for those shoppers who want to experience products on their own or with friends rather than have a one-on-one consultation. (The previous display functioned as a tester station, where a shopper sat down and received a make-up application.) Applicator bins and adjustable mirrors on both sides of the new unit are the biggest changes from the previous design. Messaging on the display has also been simplified to a universal brand statement, says Catherine Culotta, vice president of retail and institute development. "Every detail," she says, "is designed to showcase Aveda's make-up and provide the guest with an easily navigable self-shopping experience so they feel free to 'come and play' and try Aveda make-up."Culotta notes that to engage do-it-yourself shoppers, it's vital for the stores to clearly communicate what the products are, what they do and how much they cost. This is done either via copy alone, or with text and graphics that communicates a product's end result. For those who still want a hands-on consultation, Aveda retail locations include "ritual stations" and, where space allows, "community tables." Shoppers can sit down and enjoy a product application or stress-relieving experience (such as a shoulder massage) from a sales associate.Clinique, Estée Lauder and MAC (all brands of New York-based Estée Lauder Companies) are testing express lanes, price signs, new promotions and counters that allow customers to browse without the help of a beauty consultant. Although Estée Lauder declined to be interviewed for this article, The Wall Street Journal reported on the changes in September, citing that the moves were due in part to increasing competition from websites, TV shopping networks, grocery stores, cheaper drug-store brands and upstart niche brands, as well as the fact that younger shoppers don't want to be bombarded by sales staff. Macy's placed "Impulse Beauty" concept shops in beauty departments in 54 locations. The self-service shops show brands such as Benefit, Cargo, Dior and Urban Decay in an open-counter design so shoppers can test products without assistance from store personnel. Minneapolis-based Target Corp. monitors shopping patterns and listens to customer feedback. To improve upon its shopping experience, the retailer began a phased rollout in February 2010 of a redesigned beauty department in select stores. "Through an enhanced store presentation, guests will experience a more visual environment which invites them to browse a mix of everyday essentials and exclusive brands," says Target spokesperson Jamie Bastian. The retailer's designer cosmetics include lines from make-up artists Sonia Kashuk, Jemma Kidd, Napoleon Perdis and Petra Strand. "Amplified main-aisle product endcaps, touchscreens, softer lighting and product testing fixtures provide a new and welcoming in-store experience," says Bastian. The touchscreen kiosks aim to educate shoppers so they can make informed purchase decisions, while the testers allow for trial before buying.Kashuk likens her brand -- sold exclusively at Target -- to an almost mini store-within-a-store, as her collection includes accessories, cosmetic bags, brushes and make-up. While the majority of stores have an eight-foot run, a 12-foot run is being tested in more than 300 locations. Testing TechnologyVirtual technology company EZface, Bnei Brak, Israel, created its EZface virtual makeover kiosk to let shoppers "try on" make-up. EZface tested the kiosk in Walmart and Walgreens, and plans additional pilots in Kmart and Sears stores. Brands merchandised include L'Oreal, Maybelline and CoverGirl."Instead of trying testers which are sometimes missing or used by others," says EZface CEO Rami Orpaz, "shoppers may get their photos taken on the spot and they can try on virtually any product." In-store, a shopper stands in front of a screen and an internal camera takes a picture. The shopper scans bar codes of desired cosmetics, and the make-up appears on the appropriate part of the face on the screen. A list of scanned items remains on the right side of the screen. The image can be printed, sent by e-mail or posted to Facebook. Orpaz says the technology aims to help consumers avoid choosing the wrong shade of lipstick and help retailers reduce damaged inventory and the number of returns, as well as increase sales. EZface.com also shows the virtual mirror online, and directs consumers to brand websites such as Maybelline to test the application. Gardiner, N.Y.-based Kiss My Face is rolling out a program with Whole Foods that utilizes in-store video touchscreens for its Potent and Pure line of organic facial care products. "Consumers can learn about the line, how to determine their skin type, what products will work best for them, and join our Potent and Pure club for special offers," says Lewis Goldstein, vice president of marketing for Kiss My Face. "We are also using in-store video to highlight new products."Goldstein says that a retailer such as Whole Foods seeks a different level of education since its customers are more familiar with natural products than those at mass retailers such as Walmart, Target and Kroger. The brand, however, has expanded to Stage Stores and Urban Outfitters. "Stage Stores, for example," he says, "want education materials that they can pass out to consumers to help them understand about our company and natural products. These retailers that are newer to natural/organic are eager to educate their consumers."NPD's Grant finds that technology is being incorporated into the category in a variety of ways -- from helping consumers identify the right products, to showcasing a brand story, to an infomercial that educates shoppers on how to use the cosmetics. She says it's also "being used to expand the sales experience beyond the in-store environment to generate sales via phones or other handheld devices."Interactive & Marketing TacticsWhile Blamtastic hasn't yet begun using in-store technology -- president Renee Sandler says it is on the Alpharetta, Ga., company's radar -- the brand does have an interactive website aimed at its target: kids and tweens. Blamtastic.com divides its website into two segments, for female and male customers, using the words "sugar and spice" for the girls and "rough around the edges" for guys. Sandler says store displays and social media are the most effective ways to get the word out about its lip balm for both men and women, and the company forgoes paid celebrity endorsements. "We feel strongly that we want all endorsements, celebrity or otherwise, to be genuine," Sandler says. "If a celebrity is passionate about Blamtastic, we're thrilled! But we won't pay them to say that." For Blamtastic, reviews and recommendations from consumer watchdog groups serve as effective word-of-mouth marketing, as do YouTube videos. "It's how today's kids and tweens share information," Sandler says, "and we notice a significant uptick in sales with every good review."Kashuk also chooses not to use celebrity endorsements. "I feel that I am a real beauty brand for real women," says Kashuk. "If anything, I like women in my ads to emulate that." For videos of the brand's "Make-up.TV" on Soniakashuk.com, only "real women" were used to show cosmetic application tips.Yet, many cosmetic companies continue to rely on celebrity endorsements as a marketing tactic. While it can sometimes help to cut through the clutter, says Amy Shea, EVP, director of brand development at Brand Keys, New York, "women, especially younger women, get the whole spokesperson equals money dynamic." Shea says brands that think women are still working in the "Mad Men" paradigm ("She uses that make-up and is beautiful, and if I use it I'll look like her too") is an approach that is less and less useful. Shea says today's discerning cosmetics customers are evaluating products and sharing information with each other long before talking to the brand. Even the youngest shoppers, adds Timothy Dowd, senior analyst with Packaged Facts, Rockville, Md., are accustomed to researching everything in advance. "They'll access sites for reviews and can do so, via a mobile device right in store," he says.Being part of those online conversations via Facebook and Twitter is part of most brands' marketing efforts. Kashuk finds that social media allows her, for the first time in more than a decade, to communicate with the women shopping her brand. Aveda uses the websites to promote events and offers. "Our Twitter activity," Culotta says, "centers around events like sweepstakes and New York Fashion Week." The brand also uses e-mail and direct mail to promote sample offers. Kiss My Face uses Facebook and Twitter to "give consumers a chance to ask us questions," Goldstein says, "and also to feel like they are part of something bigger; a movement toward natural and organic."Since the segment relies on trial, Kiss My Face also does a lot of couponing. Attached to sample packets, available online or accompanying any piece of consumer collateral, the coupons, says Goldstein, provide an incentive for trial.Marketing agency G2 launched ColorMatch in early 2010 for Procter & Gamble's CoverGirl brand. The central component of ColorMatch is a page within Covergirl.com that allows registered users to receive shade and product recommendations after inputting hair color, eye color and skin tone. Visitors can upload a photo into a virtual mirror to see the recommended shades, and a live chat assistant is available 24-7 for questions. G2 also created a ColorMatch mobile application for a shopper to scan a SKU's bar code with her phone, and use the phone at retail to check out. The app also enables shoppers to access product ratings and reviews."Given the cluttered mass cosmetics space and the fact that she can't try products on before purchasing or ask the opinion of experts, G2 developed ColorMatch to help the shopper select the right shade and product to meet her needs," says Kipp Cheng, G2's group director, corporate communications. "To date we have approximately 3.6 million consumers in our database who are either fully or partially ColorMatched."Measuring EmotionsAveda conducts both quantitative and qualitative research with shoppers, potential customers and professional stylists as well as monitors social media conversations and analyzes global macro trends that drive behavior. Culotta says the research is an effort to understand primary hair and skincare concerns; satisfaction with current offerings on the market; and beauty routine in terms of time spent and number of products used on a daily basis.Key to making marketing efforts work and building a sustainable brand, says Brand Keys' Shea, will be a brand's ability to build some sort of strategic engagement metrics into their brand management and planning. She says a big roadblock with cosmetics companies is the opinion that an emotional decision like buying make-up cannot have metrics attached. Having been part of a joint committee of the Advertising Research Foundation and the American Association of Advertising Agencies that studied emotional response in advertising, Shea says emotion can be measured."Cosmetic brands absolutely need to find the point of differentiation, and need consumer-centric metrics to do that," she explains, "but they are completely right that those metrics have to measure emotion -- really measure it. I think because cosmetic brands don't believe it can be quantified, they are condemned to repeating the past, and it shows."

Cosmetics Come Out to Play

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