BW Confidential - Issue #9 - March/April 2012 - (Page 22)

Best of www.bwconﬁdential.com The inside view on the international beauty and wellness industry September 2-15, 2010 #21 BW highlights BW Confidential delivers an electronic publication by email to subscribers every two weeks, with a focus on analysis of major issues facing the international industry, interviews with key players and insight into new trends. Here we bring you excerpts of some of our reports. To see the articles in full log on to our website www.bwconfidential.com Comment CONFIDENTIAL Inside The buzz The essential news roundup The retail view Wellness focus Changing channels f the industry needed any more proof that retail models are changing and consumers are buying differently, it only needs to look at the launch of the new Mary J Blige fragrance. US company Carol’s Daughter, which developed the scent, took the brave step of launching the fragrance exclusively on TV shopping channel HSN, and so without the US’s traditional launch-pad, the department store. The company can’t be disappointed with the results: in just six hours of airtime the fragrance had sold 60,000 units and broken HSN records for fragrance volume sales. Brands looking beyond traditional distribution is nothing new, but what is interesting is how successful new channels are becoming. Alternatives in the US, such as Sephora and Ulta, may not have the same footprint as department stores, but they are increasingly popular, and their websites are attracting more consumers who may not have a brick-and-mortar version nearby. As for TV shopping, it also has broad reach, provides brand awareness and is considered a lot more cost-efﬁcient than the department store. One brand manager recently told BW Conﬁdential that companies can simply no longer afford to pay for staff at department stores and all the other extras they ask for. And perhaps more worrying for the department store is that brands are now less afraid of upsetting these retailers by dabbling in other types of distribution. Oonagh Phillips Editor in Chief ophillips@bwconﬁdential.com 2 4 4 5 6 I Netwatch The beauty blog review Interview Clinique vp & gm Europe, ME & Africa Jean-Christophe Jourde Beauty insight Market outlook 8 11 Store visit House of Fraser’s Apothecary Subscribe www.bwconfidential.com on p.13 or go to Beauty insight Mass brands in duty free It’s easy to turn your nose up at mass beauty in duty free. One travel retailer buyer comments: “Yes, we have mass brands like L’Oréal Paris, but we keep it in the corner where no-one can really see it.” That view reveals a lot about the general retailer attitude to this segment of the market: it serves a consumer need, but nobody wants it taking a high-profile position in the perfumery department. Travel retail firmly remains a channel for luxury brands because, despite the number of low-cost carriers that have brought flight ticket prices down, flying still favors the rich. Pharmacies in Europe Beauty has been gaining more space in pharmacies in Europe. More brands are looking to the channel as an alternative to getting into perfumeries, while chemists are taking more interest in the high-margin cosmetics category as a way of supplementing their bottom line in light of the development of generic drugs. In large urban areas, beauty sales in pharmacies can reach up 50% of sales. “Some of the biggest pharmacies today are like mini-Sephoras now—they have basic and very high-end skincare and the staff is extremely savvy in terms of the brands’ positioning and the consumer,” said one beauty executive. C M The South African market South Africa’s market is seeing strong growth. Between 2005 and 2010, sales of beauty and personalcare items grew by more than 75% to 25bn rand ($3bn), says Euromonitor. In terms of brands, the activity has largely been in the form of local companies and natural brands. This is reflected in new retail configurations. The country’s major department stores have debuted revamped beauty floors in their flagships, featuring previously unavailable niche brands. 22 Retailing organic beauty Despite double-digit growth rates in recent years, natural and organic cosmetics remains a niche—these products make up just 2% of European beauty sales, according to market research company Organic Monitor. Many organic brands are finding it a challenge to enter or stay stocked in perfumeries and department stores. Indeed, a number of prestige retailers are either pulling out of the category or giving it less space and focus. “The category has been poorly managed in department stores. At the Galeries Lafayette in France there are almost no natural niche brands left and at Le Bon Marché it’s basically the same story,” explains one brand manager. March-April 2012 - N°9 - BW Confidential Y CM MY CY CMY K http://www.bwconfidential.com

Table of Contents for the Digital Edition of BW Confidential - Issue #9 - March/April 2012

Cover
Comment
Update - Brand & retail news recap
- Companies on the move
Take note - Market facts, figures & trends
Best of BW - Highlights from our e-publication
Launches - The latest in fragrance, skincare & make-up
Interview - HSN gm of beauty & merchandising strategy Betsy Olum
Insight: Make-up - Category overview
- Nails
- Retailing
- The latest trends
Wellness - Online marketing
- Spa case studies
Retail - Pos technologies
- Store concepts
Digital - Social media strategies
Market watch: Brazil fragrance - Country overview
- Fragrance industry roundtable
- Prestige fragrance retailing
Strategy spotlight - Case studies to inspire
Travel retail - Americas regional overview
- Brazilian travelers
- Interview: Nuance Group North America...... Andrew Rattner
Radar - Six up-and-coming beauty brands
Packaging - Electronics in beauty packs
- Latest innovations
Last word - Crépuscule ceo Christophe Lerouge & creative director Olivier Boré

BW Confidential - Issue #9 - March/April 2012