Beauty IOD Blog

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.

Kudos to Estee Lauder's Holiday Spirit

Crain's New York Business reports today on companies cutting back on their holiday parties and instead redirecting those resources to charities.  Crain's reports that Estée Lauder nixed its longstanding party at trendy Nobu and instead made a donation to Dress for Success. In a statement, the make-up conglomerate said, “After much thought and consideration, The Estée Lauder Companies has decided to cancel the annual holiday parties held for employees and media colleagues.”

Where to Find Research on the Beauty Business

The top beauty research firms are:

NPD
Mintel
Kline Group
Packaged Facts
Datamonitor
Euromonitor

We use market sizing and trend information from all these firms for our clients.  What we do is use research reports, news articles and other analysis to provide a comprehensive overview of a topic for our clients who don't have an in-house strategist/researcher.

Innovative Beauty Products Sell Even in Recession

“Ultimately, it comes down to great product,”says Allen Burke, director of beauty and cosmetics at QVC.  Burke says in WWD, that rather than steep discounts, QVC is relying on innovative beauty items.  “We’re seeing a shopper today who is a lot more thoughtful about the purchases she’s making.…She was in the driver’s seat before, and she’s even more in the driver’s seat now.”

“Brands that innovated are up 20 percent; brands that didn’t are down 20 percent from cannibalization,” said Bluemercury founder Marla Malcolm Beck

Trend Tracking: Johnson & Johnson enters medical beauty with Mentor acquisition

The Beauty IOD Centerhas been tracking physician's channel as one of the emerging trends of the beauty industry.  In recent related news, Johnson & Johnson acquired medical aesthetic products supplier Mentor Corporation in a cash tender offer valued at $1.07bn.

The Forbes report states, "JNJ understands that the $4.6 billion cosmetic medicine market is expected to grow to $6.7 billion by 2012 and the best time to enter this market is when companies are trading at very attractive valuations."

For more in-depth information on the significance of the physcian channel to the beauty industry, log into the Beauty IOD Center.

Top 10 Global Personal Care Companies - SeekingAlpha

Personal Care Products include items that we use on a daily basis. Some of the items in this group are hair care products, deodorants, detergents, toothpaste, skin care products, band-aids, baby diapers, tissue, etc. Some of these products are necessities and consumers buy them even when the economy is down. This is one reason why stocks in this sector are good picks to ride out a recession.

Rank Company Ticker Country Yield

1	The Procter & Gamble Company	PG	USA	2.60%
2	LOreal S.A.	LRLCY.PK	France	N/A
3	Unilever PLC	UL	UK	3.01%
4	Johnson & Johnson	JNJ	USA	3.24%
5	Kimberly-Clark Corporation	KMB	USA	4.06%
6	Colgate-Palmolive Company	CL	USA	2.55%
7	Svenska Cellulosa Aktiebolaget	N/A	Sweden	N/A
8	Kao Corporation	N/A	Japan	N/A
9	Estee Lauder Companies Inc	EL	USA	2.03%

Full post here.

Widgets Should Be Engaging

Advertising Age's Bob Garfield is extremely bullish on widgets, saying, "The widget may not be the holy grail, but it's arguably pretty damn grail-ish -- maybe the highest expression so far of online marketing in the Post-Advertising Age." He goes on to say:

"Branded widgets are the refrigerator magnets of the Brave New World. These compact, portable little software apps -- from video players to countdown clocks to makeup simulators -- are inexpensive to distribute, free to the user and (often enough) distinctly useful. At a minimum, they carry an ad message wherever they go... At a maximum, the widget is something like the magical connection between marketers and consumers, not only replacing the one-way messaging long dominated by media advertising but vastly outperforming it."

 

At least one beauty company that have tested the widget waters is Pureology.   Like most online initiatives coming out of beauty companies, it doesn't quite tap into the engaging and fun aspect of social media.  Take a look at the example given in the AdAge piece - Miles from Nike makes me want to start running and keep engaging with the him!

Beauty Sales Doing Well Online - NYT

In a rare bright spot for the retail industry, e-commerce sites had a strong holiday weekend, with online sales from Friday through Monday up 13 percent compared with last year, according to data released Wednesday by comScore. Beauty products accounted for a surprisingly large slice of sales Monday, said Sucharita Mulpuru, an e-commerce analyst at the research firm Forrester. “Cosmetics are doing really well this year, because it’s those affordable luxuries,” she said.

Full article here.