Beauty IOD Blog

NuFace to Debut on QVC on April 25th

Our friends at Twist.new.brand.venture are debuting their NuFACE product on QVC Saturday morning at 2am and 8am.  From what I hear, it is an amazing innovation to help firm and tighten your faces muscles - and its FDA approved.  That is good news indeed, I hate making those funny faces to "exercise" my face.

According to Allen Burke, QVC’s director of beauty merchandising, “Devices such as the NuFACE^® Microcurrent Facial Toning System offer a beauty opportunity that the QVC consumer demands.  As we expand our high-tech beauty category, our customer expects us to deliver the best in the business. The NuFACE® device certainly meets that test.”

 

Full press release
NuFace website

As Seen On TV

Informercials seem to be the topic du jour, appearing as feature stories in Fortune, New York Times and now as a special on CNBC.  The direct response television industry seems to be benefiting from  the struggling television networks and America's lack of sleep.  How big is this industry? Estimates vary. This MarketWatch piece says $200 billion, the Fortune piece says $300 billion.

Department Store Workforce Reductions

Still no good news for department stores, The Wall Street Journal reports that Standard & Poor's last week cut the debt ratings of department stores including Macy's and J.C. Penney on "deepening concern about the impact of the U.S. recession on the increasingly troubled department-store sector."

Department Store Layoffs Tracker:

• January 2009: Lord & Taylor eliminated an additional 170 jobs, on top of the 120 layoffs in this past October, for a total of 3.5% of total workforce
• January 2009:  Sak's Fifth Avenue announced 1,100, (9%) in layoffs 
• February 2009: Macy's cutting 7,000 or 4% of their workforce
• March 2009: Barneys New York gets rid of 76 positions, about 3% of total 
• April 2009: Neiman Marcus cuts 936 jobs since January

Beauty IOD in WWD Beauty Biz

This week's WWD Beauty Biz feature on beauty deals in California highlighted the Beauty IOD, and a quote from Sarah Chung of Periscope Solutions, publisher of the Beauty IOD Report Series.

The pursuit of California brands, such as Juice Beauty, suggests that the tide could be turning, though. Interest in beauty and personal care transactions hasn’t died. The recession, while steamrolling longheld business assumptions, hasn’t shaken an underlying faith in the potential of well-positioned brands. In fact, that faith may be stronger than ever.

“Beauty is one of those areas where women are treating themselves, even in this economy,” says Sarah Chung, author of the Beauty Information on Demand report, about deals in the sector. “As long as consumer appetites are not satiated, entrepreneurs will continue to respond, and people will want to participate in the market. There is nothing inherently wrong in the beauty industry.”

Castanea Partners Acquires Urban Decay from The Falic Group

After acquiring Urban Decay from LVMH in 2002, The Falic Group has sold the cosmetics company to Castanea Partners. Terms were not disclosed. The Falic Group claims to have built annual sales by four times over the period of ownership. Urban Decay general manager Tim Warner told WWD in 2007 that the brand was on pace to hit $100 million in global revenues that year.

Robert Smith, co-managing partner of Newton, Mass.-based Castanea and former co-chief executive officer of the Neiman Marcus Group Inc. “When Urban Decay came along, we were attracted to it for a few reasons: one, it is a very distinctive brand and a leader in its category serving an edgier, younger customer and, two, it is really concentrated on building retail partnerships with its specialty retailers.”

• Orange County Business Journal, Edgy Cosmetics Maker Urban Decay Sold
• WWD, Castanea Buys Majority of Urban Decay Cosmetics

New Kiosks Engage and Sell Customers In-Store

The new generation of retail kiosks, from companies like Intel, IBM and Microsoft, claim to help retailers better connect with consumers and how they like to shop.  According to the New York Times, the new kiosks are sleek  and large touch screens — as well as software that, depending on the application, can recognize customers, know what they’ve bought in the past, point out bargains and even let them try out virtual clothing, hair colors and cosmetics onscreen.

One new application, the Virtual Mirror kiosk, was created by IBM and its business partner EZface, to let customers experiment virtually with beauty aides like new cosmetics or hair coloring. The kiosk has a camera to capture the shopper’s image and a scanner to record the product the shopper wants to try.

NYT: Marketing in a Recession

The New York Times featured our friends over at SheSpeaks, which is the leading word of mouth company focused on women.  Word of mouth is an worthwhile marketing avenue for beauty companies who are looking to drive buzz and purchases of a new product, especially in this economic climate when consumers are more cautious and less likely to try new products.

“This is a very good time for brands to get out there in new and different ways,” said Aliza Freud, chief executive at SheSpeaks in New York.

Because of the economy, “consumers are talking about reassessing their brand favorites,” she added, “not necessarily to trade down, but if they think they can get a better value at the same price.”

Members of SheSpeaks were recently polled on their attitudes about trying new products in light of the economic downturn, Ms. Freud said. Of the respondents, 44.4 percent said they were more likely to try them and 42.3 percent said they were equally likely.

Only 13.3 percent of the respondents said the economy made them less likely to try new products because “this is not a time to experiment.”

Sak's Gets Social... Kind of.

Sak's, fresh off its layoffs, discusses their recent website improvements with WWD.   The department store has upgraded its Canada website, and plans to launch similar offerings for Europe and Asia.  Clearly looking for ways to increase revenues with less costs.  They also noted that "remain committed" to participating in YouTube.  Does it sound like to anyone else that they haven't quite figured out how to crack the social media component?

Department-Store Decline: It's Not The Economy

Here's an interesting study to kick off the  new year.  MediaPost reports on the "Ninth Annual National Shopping Behavior Study" which suggests that it's not the economy but a fundamental problem with department stores that is resulting is dismal sales.  This report supports the growing popularity of boutique apothecaries and beauty sales on the Internet.

"For all the lamenting that retailers have done about slowed consumer spending, a new study reveals that consumers have been shunning mainstream department stores not because of prices, but because these stores are increasingly out of touch with what shoppers want...  The study also found that as the department store channel has lost share overall, it has lost more ground among the affluent shoppers it needs most...  Instead, the study finds that upscale consumers are increasingly likely to shop from catalogs or the Internet. "

Bare on Advertising

SeekingAlpha posted an analysis of Bare Escentuals's sales by channel.  Their data shows that the company is growing less dependent on informercials, their bread and butter, and growing retail sales in boutiques and wholesale through spas and salons. It also notes that Bare spends 7-8% of sales on ads and promotion, while L’Oreal and Estee Lauder spend ~30% and ~25% each.