Bloggers influence beauty brands’ bottom lines
Bloggers, industry observers said, are making a big difference in terms of what and where consumers purchase their beauty supplies, and it is vital that manufacturers and retailers do all they can to influence these people.
It might be even more important today as the beauty segment feels the impact of declining volume at mass market outlets, and many officials look for the magic wand to get sales moving again. Nielsen data shows that beauty department sales declined 1.7% for the 52-week period ended Aug. 26, for combined in-store mass retail sales. Total dollar volume dipped from $16.6 billion to $16.3 billion.
Unit volume took a harder hit, dropping 3.4%. Compounding the issue is that these numbers do not take into consideration online sales or sales at specialty and department stores, where beauty volume is booming — suggesting customers are in the market for cosmetics may just not be going to mass doors.
The bottom line is that consumers are on the hunt for edgy, niche brands often touted on social media. Several mass retailers are rushing to add more of these up-and-coming lines — sometimes at the expense of space to traditional mass market powers. This is all occurring at a time when brands have revved up the product production machine, with Nielsen data showing rampant launch growth in skin care, cosmetics and hand/body lotions.
The top beauty executives are the first to admit that competition — whether from brands or other retail channels — has only sharpened their claws. Linda Wells, Revlon’s chief creative officer, said the niche brands have created a wake-up call to the industry. “It was a good thing that spurred us to action,” she said.
At Markwins, Bill George, president and COO of the company’s beauty brands division, added that his company is revving up innovation to maintain its shelf space.
Indeed, the beauty powers are digging in with mammoth influencer deals, social media campaigns and burnished product innovation that has not been seen in the mass market in several years. Coty, for example, was bogged down with assimilating the 41 brands it acquired from Procter & Gamble, and admittedly has not been able to focus as much as desired on its core beauty brands, such as Sally Hansen and CoverGirl. Now it is full speed ahead.
“We are one year past the merger and integration with the P&G beauty brands, and we are now well-positioned to deliver growth in this complex environment,” said Shannon Curtin, senior vice president of Coty Consumer Beauty North America. “The response from the U.S. retailers and consumers from just two of our recent relaunches — Sally Hansen and CoverGirl — has shown [that] when we reflect our Coty purpose of celebrating and liberating the diversity of beauty, [it] is overwhelmingly positive.”
CoverGirl hopes to get back in gear and regain its prominence in mass beauty. There’s a fresh logo and new tag line, called I Am What I Make Up that is nudging out the old Easy Breezy Beautiful — and a boatload of 100 new products. Katy Perry fronts a new advertising campaign, but there’s also something for everyone with five very different “cover girls,” including actress Issa Rae; influencer and chef Ayesha Curry (wife of basketball star Steph Curry); model Maye Musk (Elon’s mother); motorcycle racer Shelina Moreda; and fitness trainer Massy Arias.
At sister company Sally Hansen, modernization of the brand and marketing messages is ongoing. Recently, the brand unveiled a 40-second TV spot, a comprehensive digital campaign encompassing programmatic and banner ads, video, paid social media and influencers. That will be supported with in-store fixtures and updated décor. The message of the campaign is “self-made beauty.” The television spot features a diverse group of women, ranging in age across several generations, and highlights Sally Hansen’s product offering.
Revlon is tweaking the assortment of its flagship brand, but also putting effort behind Almay, which the company admitted had been overlooked. “Almay is getting some much-deserved love,” said Wells, the former editor in chief of Allure, who joined Revlon in early 2017.
With the tagline “Reveal the True You,” Almay is building off its heritage, but also introducing itself to a younger audience. Almay tapped four women with diverse backgrounds ranging from Hispanic to Lebanese and light to darker complexions. Their stories are showcased in video content on Instagram and Facebook. The influencers — Chachi Gonzales, Wendy Nguyen, Nadia Aboulhosn and Nikia Phoenix — have follower counts that range from 31,000 to 1.1 million. In the videos, they discuss their own challenges candidly and how there is no longer one definition of beauty.
Almay is putting effort into shining up its position in stores, in an effort to lose some space and doors that dwindled along the way. New packaging and fixtures will hype its innovation. To reflect consumer demand for wider ranges, Almay’s Smart Shade foundations will be broadened to include deeper shades for darker skin tones.
New items are planned for Clear Complexion and Truly Lasting Color, as well. The company said it also is making headway with new loose powder and blush.
For its part, Markwins’ Physicians Formula has several new items sporting such innovations as stick formulas and cohesive packaging. A major advancement this year is its return to Walgreens, which phased out the brand several years ago.
The moves from the big brands come at a time when their space is being challenged by more nimble brands, such as NYX and e.l.f., as well as private-label products that retailers are rushing to shelves. In the meantime, up-and-coming brands such as e.l.f. aren’t taking their eye off innovation. E.l.f. has expanded rapidly, getting 40% more space in Walmart, as well as expanding its reach in Walgreens.
For 2018, Mara McCune, vice president of e.l.f., identified skin care as a category with big potential. “Skin care is a huge trend right now, primarily with K-beauty-inspired items like magnetic masks, bubble masks and peel masks,” she said. “Highlighting continues to stay a steady trend to create that lit look, with new innovations in holographic and glitter for a more intense glow. At e.l.f., we work hard to bring these trends to mass first, with items like our Hydrating Bubble Mask and Gentle Peeling Exfoliant. We recently launched four colors of glitter eyeliner, as well as five colors of our Pop of Glitter Makeup Transformer Gel, a multi-use product for highlighting, or transforming any eye shadow or lip color to a sparkling metallic finish,” she said.
McCune believes drug chains will gain ground as they offer more ways to immerse shoppers in experiences and offer more education. “Shopping behaviors will continue to evolve with the advancement of technology and tools that allow shoppers to customize their shopping experience,” she said. Chains that will win will find ways to partner with brands in engaging and educating their shoppers better than anyone else.”
Brands being added to retail assortments include Burt’s Bees color cosmetics; more footage to NYX — which is posting eye-opening sales gains; Yes To; K-beauty launches; and Milani. Some merchants are putting more muscle behind their private-label logos, where they can speed trends to market. Walgreens has one of the biggest own-brand portfolios with No. 7, Soap & Glory, Sleek MakeUp and YourGoodSkin. It also will add IsaDora as an online exclusive. CVS serves up Makeup Academy as its on-trend proprietary line. Walmart’s exclusive lineup includes Flower by Drew Barrymore, Hard Candy and a new natural collection called Found.
NRF predicts holiday sales spike
Officials at the Global Market Development Center think that retailers have a great opportunity to build sales through several key general merchandise categories, including gift cards, clothing, books and media, this holiday season.
GMDC says that a National Retail Federation study found that sales during the holiday season will increase by 3.4%, with online shopping becoming the most popular consumer experience for the first time in survey history.
NRF’s annual consumer spending survey conducted by Prosper Insights & Analytics predicts consumers plan to spend an average of $967 during the 2017 holiday season compared to last year’s reported spending of $936. The figure includes food, flowers, decorations, gifts for others and greeting cards.
“With employment and incomes increase, consumers are more confident this year and that is reflected in their buying plans for the holidays,” NRF President and CEO Matthew Shay said. “Retailers have been stocking up in expectation of this, and all signs are that this will be a busy holiday season. Retailers are preparing for a rush of consumers leading into Thanksgiving and all through December, and are offering a wide array of merchandise and promotions so shoppers can find great gifts and great deals at the same time.”
NRF anticipates shoppers will jump online and flock to department stores. In fact, online shopping is at its highest rate ever this year — 59%, up from 57% last year. The survey also found that 57% will shop at a department store, 54% at a discount store, 46% at a grocery store/supermarket and 35% at clothing or accessories store. The survey found 27% plan to visit an electronics store, 25% a small or local business, and 18% will go to a crafts or fabrics store.
According to NRF, shoppers say these are at the top of their wish lists this season:
1. Gift cards/gift certificates: 61%;
2. Clothing or clothing accessories: 55% — the highest level in 14 years;
3. Books, music or movies: 40%;
4. Consumer electronics or computer-related accessories: 33% — GMDC research suggests wrist-worn wearables, such as the Fitbit and Apple Watch, are fueling this trend, augmented reality and virtual reality are closely following wearables in popularity, according to GMDC. Also, advanced voice devices, such as Amazon’s Echo (Alexa), Google Home and Apple’s Siri are popular; and
5. Home décor and furnishings: 24%
Retailers can capitalize on these trends and others with smart, innovative products and merchandising, according to the GMDC.
“This holiday season is an important one, given the disruptive and rapidly evolving marketplace,” said Mark Mechelse, director of research, industry insights and communications at GMDC, based in Colorado Springs, Colo. ”As the online versus offline battle continues, brick and mortar retailers have a unique opportunity to embrace change. Those that differentiate themselves and leverage technology to transform the way consumers shop can deliver enhanced experiences inside the store. Advancing a new mix of offerings through click-and-collect and home delivery, and curating an assortment of products to reflect localization strategies, retailers can satisfy even the savviest shopper’s wish list.”
New tools to reach beauty consumers hit Spotify, Instagram
Social media and technology are becoming the new battlegrounds for companies to market their latest product launches to a wide range of consumers. Streaming giant, Spotify has already made its mark in the e-commerce field by partnering with Merchbar since 2014 to sell artists’ merchandise on their profile pages. Now, the company is reportedly looking to take things one step further by entering the world of beauty.
Spotify is looking to continue its successful relationship with Merchbar by using it as the link between product and consumer, according to a report in TechCrunch. The company is looking to begin this launch by partnering with makeup artist Pat McGrath to sell three shades of lipstick retailing for $22 each. Consumers will be able to recreate the looks of their favorite artists with the products used to create them. This approach is similar to what newcomer Shopthat is looking to create with its platform.
Shopthat is a much newer company on the scene, but they are looking to bridge the gap between consumer and beauty influencer. The company will allow fans of a particular YouTube or Instagram star to shop their content by linking liked posts to products, taking shoppers all the way through purchase without having to visit a website or download an app. Unlike Spotify using Merchbar as its outside source for consumers to complete their purchases, Shopthat will be using Facebook Messenger to complete the transaction by connecting to a user’s social media account.
“For starters, we're not an app,” Ami Moore, CEO and Founder of Shopthat said. “You just like a shoppable post, then we send you a Facebook message that lets you directly shop all the products from the post. You see it, you Like it. Seconds later, you own it.”
Both companies are allowing the artist or influencer to receive a commission for the products sold.
These new efforts to capture sales from social media look to be solidifying technology's impact on the beauty world. Numerous brands have already partnered with such companies as ModiFace and YouCam Makeup to bring AR-powered technology to the shopping front, with MAC Cosmetics being the latest to launch virtual try-on mirrors in its stores.