Mass Cosmetics Get Classier

In recent years, boutique-like cosmetics distributors have found a welcome mat at mass merchant and drugstore chains, following the lead set by major hair care brands in the salon industry. As these outsider lines began doing more direct-to-consumer advertising, major retailers like Target, Walgreens and CVS began looking to increase their inventory with more upscale brands.Target's Prestige Beauty Collection, introduced in late August, corrals labels from three international makeup artists into exclusive package bundles for the retailer. The stores have multiple, distinct sections along a gondola for each of the three brands, and the glam factor seen on these displays is hard at work, complete with backlit shelves and testers. CVS has gone a step further, creating a brand new beauty concept to house more upscale brands."And they're doing very well," says Mike Nave, president and publisher of Beauty Industry Report, Calabasas, CA "They give major retailers excellent margin return." Masstige MattersTarget's Prestige Beauty Collection is what the industry has long considered "masstige" and looks to be a serious trend, judging by the dedicated endcap space with large visuals of models and slick lighting to support a high-end appearance for these high-end labels. Display producer Ovation In-Store, Maspeth, NY, manufactured and worked with Target on the units.The collection includes products from JK Jemma Kidd, a British makeup artist, whose line is touted as "contemporary chic"; from NP Set, by Australian beauty guru Napoleon Perdis, which Target calls "on-the-go, breezy glamour"; and Pixi by Petra, from Sweden's Petra Sand, which infuses skin-treatment ingredients into cosmetics to "make women look like themselves, only better," says Target.Drugstores are also upping the class factor of their cosmetics departments, most notably CVS, which opened the first of its Beauty 360 concepts in Washington, D.C., in November and in Mission Viejo, CA, last month. Beauty 360 is essentially a separate store adjacent to an existing CVS pharmacy, stocking upscale brands such as Elizabeth Arden and Juicy Couture fragrances. The stores also have licensed professionals on staff to apply makeup and give shoppers mini-manicures, express facials and hand massages."This new concept will redefine the beauty shopping experience by providing customers with access to prestige and niche beauty brands as well as an unparalleled level of service," Mike Bloom, senior vice president of merchandising, said in a company release. The chain plans to open more locations throughout the country in markets "where beauty performs exceedingly well."Retail PairingsWhen The Body Shop and Sephora popularized what insiders have dubbed "the pop prestige" in the 1990s -- an open-sell format without intimidating clerks guarding the product behind a sliding door -- they enhanced America's heightening sense of sophistication regarding cosmetics. Yet while today's stores are willing to experiment with counter shapes and signature colors, no one is pushing for other radical changes with any urgency.Certainly, cosmetics companies will update their look every three to four years, says Andrew Freedman, president and CEO of Design Display Group in Carlstadt, NJ, a large producer of cosmetics displays, but it's not much different than what restaurants do to revamp their menus and redecorate the dining space. LUSH's store-within-a-store agreement with Macy's could arguably be an exception. Unlike traditional deals, where the department store purchases the inventory and then hires interchangeable employees to staff the counters, LUSH continues to control its inventory, hire and train the staff, and take responsibility for the whole operation. "We try to make sure the brand, display and merchandising, the product range, and customer service is exactly what you find in a standalone store," says Mark Wolverton, president and CEO of LUSH North America. That includes the UK-based store's familiar wooden displays and signage painted in white acrylic paint on black Sintra board, silkscreened individual product signs and an illuminated window box sign framed in Idaho pine wood. These and other P-O-P are made in-house, bound for LUSH's standalone locations. LUSH planned to add another 26 units last fall to the 11 units already located inside Macy's department stores. The duo joins Sephora and JCPenney, which teamed up for a store-within-a-store agreement in April 2006. Although it's working with a smaller footprint, Sephora also brought its signature appearance, including gondola fixtures. "Department stores aligning themselves with brands and allowing the brand to act the way it wants to within that environment is a draw for the customers," Wolverton explains. "It's something their stores can offer that is unique." For this reason, he dubs such partnerships a trend of the future.Still, the direction is to segregate brands into silos rather than organize a cosmetics department by product or benefit, where competitors line up together, a la the yogurt section of a supermarket dairy case. What works for other retail categories simply won't fly for makeup, insiders insist. "Customers align themselves with brands, and how the company operates, and how it provides customer service," says Wolverton. "The customer wants to see brand differentiation, so I don't think lumping it together would work. It would be overly confusing to the customer."The mass department stores and drugstore chains are not likely to pick up this idea and run with it either, says Carole Krupnick, CEO of Posner Cosmetics in Butler, NJ She too cites the confusion it could cause for consumers as they try to determine whether they need a powder or cream blush if the two SKUs are separated. Not to mention how the cacophony of having every brand's foundation competing for a woman's attention at the shelf could frustrate what is already an emotional buy."Even with the fluctuations in the economy, the consumer is still driven by her loyalty to the brands she most likes to use and perform well for her," says Krupnick. "I like to stop and talk to consumers in the cosmetics section when I'm in a chain store in order to maintain a relationship with them. It enables me to focus on the right message when we are evaluating new products for Posner."But more importantly, it's not the time to fix what isn't broken. National mass department stores have been extremely receptive to new ideas, new products and suggestions to make things bigger and better when it comes to cosmetics, in Krupnick's encounters."People are driven by quality, brand and price. I do believe people who have the desire to buy in department stores will still buy at those counters," Krupnick adds. "And although the mass cosmetics are equal in quality, they'll continue to be represented differently because everyone has her own process of how she likes to shop."Innovation at the ShelfThe cosmetics category is definitely innovating, as seen by the new mass boutiques, but digital signs and interactive displays have few takers so far, according to Beauty Industry Report's Nave. Design Display Group's Freedman sees the same stale pattern, despite noting a Clinique calculator display that determines skin type as a successful example -- the longest running display he can recall. "Today digital is always an expensive road to follow, and there needs to be the marketing push and a budget that is pretty substantial. It's an option I don't think most can afford to seek," he says.Chicago-based research company Mintel predicts a big change coming to retail layouts for this category, with an emphasis on better organization. Count Clinique among the pioneers in this direction, thanks to the new counter design rolled out to celebrate the company's 40th anniversary. Formerly, a consultant stood on one side of the counter with the customer on the other. By folding the edges inward, the client now comes into a seated area and sits face to face with a consultant. Testers previously located around the edges of the counter are now at eye level.The idea, Clinique executives say, is to reduce the noise of too many messages and too many products. So far, the new design's openness has drawn a crowd, and executives report positive feedback on the relationship-building strength of the setup.That's not to say other configurations have given up on starting a dialogue. Nave reports an uptick in the number of shelf-talkers popping up in mass department stores. Still, these point-of-purchase materials don't reflect the cosmeceutical benefits as strongly as they should, says Timothy Dowd, a senior analyst at Packaged Facts, an imprint of Brooklyn-based Marketresearch.com. Thanks to the American consumer's fascination with mineral makeup formulas, he sees the need for a stronger link between the natural, organic elements on the ingredient label and shelf advertising."Of all the modern ways like shelf talkers and tear-off pads, I think the retailers themselves should take the initiative and print some literature to put on the shelf near the product. It would surprise everybody," he says. And no matter the venue, a prestige image will resonate better with shoppers, even when pushing a value-oriented brand, Dowd adds.Earth TonesWhen it comes to sustainable packaging and green production, some say the cosmetics industry is ahead of other consumer products. For starters, the category comes with a built-in quantity benefit. "A woman does not replenish her cosmetics supply as often as she does food products or household cleaners," Krupnick notes, "so that cuts down on packaging use from the beginning." Women also readily embrace a botanical approach to their skincare and makeup formulas, as officials at Physicians Formula cashed in with their Organic Wear line that earned exclusive endcap displays at CVS and was quickly welcomed on the shelves at Rite Aid, Longs, Target, Kmart, Meijer, Kroger's Fred Meyer, Supervalu's Albertsons, H-E-B and Ulta.So it stands to reason that recyclable packaging naturally follows. Or, in LUSH's case, shoppers tolerate practically no packaging at all. The brand strives to present its soaps, shampoos and even deodorants as naked as possible."When you look at a lot of the packaging in cosmetics these days, there is more money that goes into the packaging than into the products. We are exactly the opposite of that," says Wolverton.But unwrapped also means uninformative, an anomaly he admits can be a hurdle with consumers. "The consumer is used to seeing real pretty packaging, and they associate that with the quality of the product. So making ethical choices in packaging doesn't always give you the same pizzazz," he says. LUSH gets its message out with in-store displays that explain individual product category ingredients and results. It's also found window signage helpful in this quest. But the biggest boost of all comes from training sales staff to work with shoppers one on one on the floor. Converting to post-consumer recycled content (PCR) is the biggest packaging trend at Aveda this year, says Evan Miller, director of new and environmental media at the Blaine, MN-based brand. It has long achieved a 96% minimum PCR rate for its products on the shelf, but in September 2008, Aveda launched what it claims is the first 100% PCR bottle cap in the beauty industry -- in time to celebrate Aveda's 30th anniversary. In addition, the company started a bottle cap collection program to educate consumers as well as gather materials. This push is what consumers see, but the company is just as green behind the scenes, Miller insists. For example, any backdrops in its store are made of an organic fabric, while posters are printed on the highest post-consumer paper available using soy inks. Displays feature reclaimed wood, steel or aluminum.But don't confuse environmental with educational. The message at the shelf, both Wolverton and Miller insist, focuses on the product benefits as opposed to its packaging origins. "We do a lot of consumer product testing and try to stay ahead of the curve to figure out what will be the next big thing, like any company," says Miller. Nor does the drive to achieve environmental harmony always supersede practicality, especially when it comes to aerosols. "As long as there are hair stylists and women, there will always be an aerosol," says Nave. Indeed, while Aveda sees a trend away from aerosols with the general public, professionals still insist on their performance quality, so the company continues to manufacture aerosols for this market segment. According to Miller, it has at least found a way to offset the emissions."It's a matter of investigating something and coming up with a format that uses available technology," Wolverton adds. Certainly the display manufacturers have cosmetics companies' backs when it comes to environmentally friendly construction, says Design Display Group's Freedman. "A lot of times we will try to control that if we can, even if the customer doesn't specify it," he says. Freedman is excited about the advent of environmentally friendly vacuforming materials on the horizon. "We're not there yet, but keep your eye on this."

Mass Cosmetics Get Classier

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