New Niches, Market Pressures Drive Cosmetic Display Trends

The watchword for fragrance and cosmetics marketers these days has more to do with demography than cosmetology. "More attention is being paid to niches overall," says Tom Donovan, director of display development at Coty Inc., New York. "We're working on brands for Generation Xers and Baby Boomers, as well as teenagers. It definitely increases our number of introductions, which means we have to be smarter about how we use our display budgets."Adds Nancy Gilberti, a spokeswoman for Freeman Cosmetics, Los Angeles, "Niche products are cropping up by leaps and bounds." The reason, she notes, comes from consumers' growing demand for specialized products and manufacturers' desire to be distinctive. "As the number of manufacturers grows and retail outlets continue to merge into superstores, manufacturers across the board need to separate themselves from the pack. Niche marketing is a likely avenue for them to take."But while there's potential in niche marketing, it has its complications: On one side are consumers who keep demanding new products in the latest styles; on the other are retailers who seek to compress display sizes in order to fit all of this product into the same amount of space. Caught in the middle: display designers.Boutiques Gaining SpaceWhile marketers try to zero in on specific segments, they want to broaden their merchandising efforts. "We're very interested in creating boutiques within stores," says Donovan. Chain drugstores, he adds, seem particularly interested, testing the concept with vitamin centers and hair centers. The boutique centers are being placed near the store's pharmacy, an area where customers have time to kill. "You have their attention, and they'll spend time looking if you have an area that's inviting to them."Henry Pohl, vice president of marketing at Shiseido Cosmetics, New York, agrees with the boutique strategy: "We believe the niche business has great potential, especially within ethnic markets." His company has introduced an entire store-merchandising concept devoted to these products and aimed at specialized retailers in Asian-American communities. The program uses in-language messages on its P-O-P to make customers feel comfortable. "These look the same as our department store signage and showcase formats, but they're attuned to the Asian-American market," he says. "It's a matter of keeping the message consistent but targeting it to a different niche."The potential for these boutiques (typically 2,000-square-feet in size) is what makes them so attractive, Pohl adds: "It's one of the fastest-growing and most-profitable areas of business. It's been growing at exponential rates in the past couple of years." Shiseido recently launched a similar program for the Hispanic market in California and Florida.Bath & Body Alter LookIn addition to customer segmentation, product categories are being niched more carefully. "The bath-and-body category is growing rapidly," notes Donovan. "We see a lot of opportunity there." That affects Coty's promotions in several ways, he says, particularly gift sets and special display presentations. "We have to be more innovative in the way we display our products and in what materials we use. There are a lot of bath-and-body boutique lines that have independent stores competing with the mass marketers. We have to create more interesting-looking fixtures and merchandising vehicles to stay on top. We haven't had that type of competition in the past."Approaching space-conscious department stores with boutique concepts isn't a hard sell, Shiseido's Pohl says, as long as the program's strengths are apparent. "Department stores are open to new ideas, and they actively encourage them," he says. "They don't want to stay the same. As they remodel and build new stores, they want to incorporate new ideas and are willing to give up space if they see that more profit will result."Another hot product niche is a specialty item: nail polishes with bright colors or glitter effects. "The nail polish market is constantly changing, with new hot colors and looks all the time," says Kristen Penta, vice president of marketing at Pentech International, Edison, N.J. The trend took off about 18 months ago and is still going strong, she says. "It began with teenagers realizing that crazy colors on their nails was a way to look eccentric and add a hot and hip look," she explains. "Now it's moved to the adult world, where women see they can wear these in an office atmosphere and still look professional."Quick Reaction A PlusStaying on top of these changes means keeping abreast of sales trends and reacting quickly, notes Karen Fox, associate product manager at Matrix Essentials, Solon, Ohio. To that end, Matrix has introduced a two-pronged merchandising program this year. To supplement the existing full-line display it introduced in late 1995, it has added smaller units, vacuum-formed trays filled with seasonally colored products and display headers that emphasize their targeted nature. "These little collections are meant to be tried and the popular ones can be added to the larger display," she explains.Others companies, such as Pavion Ltd., Nyack-On-Hudson, N.Y., keep close track of scanner data. "We let our P-O-P materials help us test new products and new shades and colors before we introduce them to the line," says Helen Trimble, brand manager for the company, which specializes in products for the African-American market. "They are a great vehicle for testing, because with scanner data, we can get immediate feedback on sales. And as a small company, we can spin on a dime and introduce colors more quickly than large companies that have more red tape."New Products ProliferateThat need to look hot and hip, even in the adult market, means more new product introductions across the board. "In fragrances, new launches are fueling the business instead of programs to keep the old brands going," says Cynthia Rapp, associate creative director at Liz Claiborne, New York. The company has increased the number of product launches to two per year. The focus is on using more and brighter colors in these displays to introduce the products."The market is demanding more introductions," agrees Pentech's Penta. "'New' is what's selling, and if you don't have it, customers won't buy you." That's why placing endcaps and counter space has become so competitive, she notes. "Those spaces are no-brainer, quick-promotion areas that imply new and hot, and that's where customers go first," she explains. "They don't go to the wall fixtures to shop any more, just to pick up the staples. Endcap space is prime real estate, and it's important to have a display that looks great there, even after it's been shopped a few times and several items are gone."The new-product trend impacts allocation of budgets, Penta adds: "It's a difficult balance, because your ongoing products give you the biggest dollars, but you've got to have support for the new products that everyone is looking for."John Butcher, senior director of packaging at Halston Borghese Inc., New York, agrees: "From a display point of view, it takes budget to introduce a new product." The way his company circumvents that pressure is to produce promotional displays with more versatility and long-term potential. "By adapting a display for new uses after the initial introduction, we can spend more on a display in the first place and amortize the cost over a longer period and more programs."For instance, a display may feature a changeable base or header, or it may be possible to change its configuration so it can hold other products. "It means we're not constantly in the construction business," he says. "It also ensures we're not on and off the counter with our displays. It gives us a more consistent look and it makes it easier to replenish a display."Coty has also taken that approach, Donovan says. For its recent introduction of Calgon Body Mist, for example, the company produced a counter display with a riser and base that can be removed so the body works as an in-line organizer with the existing permanent fixtures. "It allows the display to move from a promotional piece to providing a planogrammed, in-line, shelf-management system."Space Gets TighterThe increase in introductions puts even more pressure on space, says Pentech's Penta. "The huge thing going on now is that every retailer wants smaller displays for countertops -- lower risers, smaller headers, artwork on the display tray. You have to be creative enough to design a display that still attracts attention." The biggest impact, she notes, comes in how this affects product load. Stores that once took 92- or 48-count prepacks now take 48- or 24-count sizes. "That means we need to ship more frequently and stay in closer contact to ensure they always have product."The move to more open-sell displays in department stores also makes the drive for compact units more challenging, notes Halston's Butcher. "There's certainly a continuation of a movement toward friendlier, interactive displays that the customer can access more easily. The problem is that to give customers more access to the product takes more space. We're constantly trying to condense our displays to fit a smaller space but improve accessibility without making [customers] feel confined."Adds Shiseido's Pohl, "Open-sell and accessibility to testers is very large. But we're having to modify it as retailers see that customers still want a certain level of service." To offset that need, the company is adding more brochures in plastic pockets, such as in the new open-sell wall unit it recently unveiled in Bloomingdale's. "The displays were designed right from the start as an integrated unit so they fit in well," says Pohl.The same is happening with the mass merchants, adds Coty's Donovan. "We're using open-sell displays a lot, because they work so well. That leads to more brochures as well as a lot more testing." But Penta is skeptical of a brochure's persuasive ability. "They work well with teens, because they love information and anything that's free," she says. "But I'm not as sure about how adults respond, because they're so busy. I think putting the key points into the header is much more important to lock those elements into the customers' heads."Sampling Technologies GrowNew technologies are expanding the potential for sampling, marketers note. Approaches such as encapsulation, scent strips and take-one pads all help in the mass market. "Finding a hygienic approach in the open-sell market is critical," stresses Pohl. "The displays need to be maintained or they can get dirty from the testers. We continually look for better applicators and disposable approaches. But we keep returning to actual testers to stay competitive."The open-sell approach also affects packaging approaches, notes Penta. "Much of our product now is sold in bulk displays, and there's not much you can write on each product, as you could when everything was blister-carded," she explains. "We have to be concise and consistent in our message so we can attract the customer in less than two seconds."Sampling and packaging changes are affecting display production and materials, too, marketers say. "The types of plastics we're using are changing," says Shiseido's Pohl. "The displays have to be cleaned frequently, so we're using darker materials and more stain-resistant plastics."New Material IdeasAt the same time, the open-sell needs are pushing others into more accessible appearances. "We're looking at vacuum-forming in clear plastics instead of black or white," says Pentech's Penta. "A clear look provides a softer feel, and it makes the display seem like an afterthought that keeps the product the star. That moves the packaging to the front."Adds Halston's Butcher, "We prefer clean lines and a sophisticated look, but we're pushing toward more interesting and accessible versions of that. We're looking into clear plastics and more mirrored surfaces. We'll also try to use more natural materials that give a softer look and make the displays more approachable."Natural materials such as wood also provide an environmentally friendly message, notes Freeman's Gilberti. "Our most recent displays have been made of recyclable corrugated or chipboard. These materials have become increasingly more readily available and cost-effective, and we see that 'environmental awareness,' in terms of raw material, is a trend that is playing a fairly recent and dominant role with manufacturers throughout the health and beauty care industry."Markets MeetingThe environmental awareness emphasis, combined with the more-upscale look and longer life for new product displays, is causing mass merchant and department store styles to blend together. Coty's recent introduction of Nokomis, for instance, was perceived by the trade as having a "department-store look" because of the quality of displays, Donovan says. The company accomplished that by combining four promotions into one long injection-molded run, merging budgets while ensuring each got the emphasis it needed."Our programs are gaining a more permanent or department-store look overall," Donovan says. It's somewhat ironic, he adds: "Mass merchants are trying to be more upscale, while department stores are aiming to be more self-service and more accessible to the customer. It's possible that at some point, they'll all reach a happy medium."Another type of medium, lenticular or 3-D signage, may also cross over eventually, notes Halston's Butcher. "They are much more sophisticated than they've been in the past and have a lot of appeal," he says. "At our end of the market, we're not quite ready for them, because they aren't quite sophisticated enough. But they offer a very interesting option, and they're coming fast."The industry's consolidation will also begin to affect display production, notes Freeman's Gilberti. "Because of the mass mergers within the industry, we expect future display trends to focus on providing a larger capacity of product in the utmost space-efficient manner." That will mean more prepacks and pre-assembled, three-sided display units containing as many as 150 to 250 SKUs each. "That type of display simplifies the work load for retailers," she says.Consolidation offers both an upside and a downside, says Pentech's Penta. "It will be easier for us to design a display, because there will be fewer customized needs for different stores. There will be fewer store layouts and amounts of counter space to deal with."The downside, of course, comes when your product isn't picked up for display by one of the few chains to survive. "Getting into the stores will be a more focused version of what goes on today," she says. "The only way to get in as a new player is to be small and new and to prove yourself quickly."

P2PI MEMBERS

JOIN P2PI

You May Also Like

Hall of Fame Profile: Pamela Velarde

Hall of Fame Profile: Stephen Bettencourt