Women are beginning to open their wallets once again in order to look good. The proportion of women who buy cosmetics only when they’re on sale dropped from 45% in 2009 to 39% in 2010, according to Mintel. Women are also less likely to avoid “splurging” on cosmetic purchases (27% vs. 33%).
Women shop for makeup an average five times a year, spending $39.45 on each trip, according to SuperDrug. Three in four women (76%) use lipstick or lip gloss, 65% use mascara, 63% use eyeshadow, 62% use eyeliner, and 38% of women use eyebrow pencils, finds Mintel.
Women also keep their cosmetic products close to them at all times. Three in four (76%) carry a makeup or skincare-related product in their purse regularly and 63% carry lipstick or lip gloss, according to a L’Bel survey.
While women primarily buy their skincare products at mass merchandisers (57%) and drugstores (45%), 16% say they’re doing more online cosmetics research and shopping than they used to, says Mintel.
The beauty industry generates more than $7 billion a year, and new brands must find innovative ways to compete with established brands for shelf space and consumer attention. MTW looks at several beauty companies entering the U.S. market, each employing different strategies to reach women.
L’Bel Rings Doorbells
French beauty brand L’Bel is one of the largest brands in Europe and South America, but the company has low brand awareness among U.S. women.
As company executives prepped for its U.S. launch in early 2011, they examined multiple strategies before deciding to follow the direct sales model. “We’re not going to get the shelf space at drugstores. At spa and retail we will just get lost. We can’t compete with PR and the money needed to launch at boutique and specialty. The direct channel is the best way to get our name out there. Women trust other women,” says L’Bel’s Amanda Thompson.
Thompson adds that L’Bel’s research finds that 52% of women say beauty consultants and salespersons are an important influence in helping them to make knowledgeable decisions about their beauty product purchases.
L’Bel may still explore other sales channels, including retail and spa distribution, but Thompson says direct sales carries an image of exclusivity. “It’s like a best-kept secret that typically only the wealthy know about, but women can afford [L’Bel]. You can’t just go out and buy us. You have to know someone. We aren’t at the local drugstore,” she says.
While L’Bel may be budget-priced — most items are under $50 — the brand works hard to convey a luxury image. The company spends nearly as much time designing packaging as it does creating the products. It also makes sure its sales women — primarily moms ages 38-42 — are thoroughly trained before they start selling the products.
Going Green
Market research company Mintel identifies the top 2011 beauty trend as “Down to Earth,” a concept that applies to both product and marketing. In 2010, 13% of new skincare, hair care, and cosmetic products were promoted as being free of paraben chemicals, up from 5% in 2008. Launches of skincare products with environmentally-friendly packaging were also up 5%.
With this high level of interest in eco-conscious beauty products, Pevonia Botanica is emphasizing the environmentally-friendly qualities of its products to appeal to women and differentiate itself from competitors. The company’s mission statement, “Go Green with Pevonia Botanica,” clearly states its strategy and even the text on its website is written in green.
Pevonia’s Anita Carter admits that green beauty is still a grey area. “It’s a real problem that there isn’t a consensus of what makes a beauty product green. You have companies claiming to sell organic skincare, but if it has water in it then it can’t truly be organic because there’s no such thing as 100% organic water,” she says.
In order to ensure its green-friendly messages are more than just the latest buzzwords, Pevonia focuses on claims that are measurable and clearly defined, such as whether it’s tested on animals or uses recyclable packaging, says Carter. The beauty brand also sells exclusively through spas, and, much like L’Bel, considers this distribution channel as a way to maintain an air of exclusivity.
Celebrity + Mass Market = Success?
Drugstore chain CVS is funding and developing Salma Hayek’s 100-SKU Nuance line of beauty and body care products to be sold starting this August in the chain’s 7,000 outlets.
The products range from anti-aging skincare to acne treatments, priced between $7.99 and $19.99. The collection relies heavily on Hayek’s star power for promotion, but also features the unique angle of including Native American and Mayan remedies among the ingredients.
L’Oreal Explores Digital Targeting
While L’Oreal continues to spend millions of dollars to advertise in traditional media, the beauty company is committing its “largest digital investment to date” through a deal with Demand Media, a portal that hosts women’s lifestyle websites.
L’Oreal has exclusive rights to place ads on Demand websites, including eHow.com and TypeF.com, that are tailored to the specific site and online query. For instance, if a woman searches Google.com for eyeshadow application, the results will display a relevant Demand website and a L’Oreal ad for eyeshadow.
Contacts and Connections: CVS, Mike Bloom, EVP Merchandising, Marketing, Advertising, One CVS Dr., Woonsocket, RI 02895; 401-765-1500; mbloom@cvs.com; www.cvs.com.
Demand Media, Oren Katzeff, General Manager, 1333 Second St., #100, Santa Monica, CA 90401; 310-917-6439; oren@demandmedia.com; www.demandmedia.com.
L’Bel, Amanda Thompson, U.S. Sales Director, 101 California St., #800, San Francisco, CA 94111; 415-362-5235; athompson@us.lbelcorp.biz; www.lbelusa.com.
L’Oreal, Marc Speichert, Chief Marketing Officer, 575 Fifth Ave., 33rd Fl., New York, NY 10017; 212-818-1500; mspeichert@us.loreal.com; www.loreal.com.
Mintel, Taya Tomasello, Director, Beauty Innovations, Americas, 351 W. Hubbard St., 8th Fl., Chicago, IL 60654; 312-450-6181; ttamasello@mintel.com; www.mintel.com.
Pevonia Botanica, Anita Carter, Marketing Manager, 280 Fentress Blvd., Daytona Beach, FL 32114; 386-239-8980, x519; anita@pevonia.com; www.pevonia.com.
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