Beauty IOD Blog

September Issue of GCI Magazine - Periscope

We teamed up again with our friend Tina Hedges at twist.new.brand.venture to write an article for GCI magazine, this time on the subject of word-of-mouth marketing. Some excerpts:

"Undoubtedly, word-of-mouth (WOM) marketing gives brands a powerful and influential way to engage their target audience—many of whom are already VIP members of vast information sharing, brand advocate-building communities. For those who began their career on the beauty retail floor, it is has long been known that consumers are vocal with their opinions, but now more than ever, consumers are opinion-publishing moguls—increasingly broadcasting their point of view across numerous mediums and finding enjoyment in being the self-appointed “expert,” doling out advice and converting their friends and family along the way."

"While most beauty marketers would be hard-pressed to disagree that a WOM campaign is an effective and necessary marketing tool, many marketers have not yet acted. Even more puzzling, many marketers either don’t know or do not care what is being said about their brands. In a recent CMO Council survey, 56% of senior marketers said their companies have no programs to track or propagate positive WOM. In addition, only 16% said their companies have a routine system in place for monitoring what people are saying about them or their brands online."

Full article here.
Previous article on Digital Marketing here.

Follow us on Twitter!

Beauty IOD is now on Twitter.  Despite our initial resistance, after testing Twitter for the past week, we've fallen in love.  We promise lots of tweets and more blog updates!

www.twitter.com/beautyiod

Our Digital Marketing article hits newsstands...

The July issue of GCI magazine with our article, "Is Your Digital Marketing a Turn-on?" hit newsstands.  Some highlights are:

The goal of digital campaigns should be to build underlining brand/consumer relationships.
Only the next “newness” will engage online consumers and make it worth their time.
Spend digital marketing dollars wisely with programs that are cohesive and focused.

Also, we'll reprint the sidebar here since there is no good link.

Digital Marketing for Every Budget

$ (Moderate Budget)

If you don’t have the budget for a mass television, print or radio campaign, digital marketing should be your best friend. Develop a strong brand personality online to leave a lasting impression on the consumers who are in your sphere of influence. Grow that sphere by making them want to root for your brand and tell their friends about it.

• Branded Facebook page: Tie it in with your Web site, blog, and make it fun.
• Twitter following: Drive traffic to stores with insider deals.
• YouTube: Tell your story in a three dimensional (sort of) way to create advocates.

$$ (Medium Budget) Use your digital marketing dollars wisely with programs that are cohesive and focused. You can afford to take a risk with something very cool and buzz-worthy, but you can’t afford to do nothing.

• Facebook application: Delight consumers with a custom application that is helpful or just plain fun.
• Word-of-mouth campaign: Build an online and off-line campaign guaranteed to drive sales and generate conversation about your new product.
• Search engines: Make sure to be there if consumers are looking for you. $$$ (Large Budget)

If you’ve got a large budget, make it count. The challenge will be getting consumers to feel the heart beating underneath those glossy ads and unreasonably beautiful spokeswomen.

• Video podcasts: Whether it’s a podcast or a channel on YouTube or Hulu, build relationships by giving content on an ongoing basis
• Online communities: Use your size to your advantage by connecting your loyalists and giving them a virtual brand experience.

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.”