Chain Drug Review, June 4, 2018

Mass market business is putting its best face forward NEW YORK There are indications the mass market beauty industry is poised for a turnaround While there is still much work to be done to lure back shoppers who fled to online specialty off price or apparel competitors retailers and brands report a ray of hope A handful of categories are registering growth according to IRI multi unit sales for the 52 week period ended April 22 in mass market doors Among those are body accessories up 30 makeup combos rising almost 7 lip treatments up 36 and eyebrow makeup which continued its doubledigit increases recorded for the last year Nail a category that has been in the red for the past few years was still down but only 47 versus declines that had reached double digits in the past Skin care was a bright spot too with sales up more than 4 Overall the beauty business is buzzing encouraging more competitors than ever to join the fray There are beauty items sold seemingly everywhere in todays market from apparel stores to convenience stores That puts even more pressure on mass brands and retailers to up the ante Prestige gains are outpacing mass In the U S for the first quarter of 2018 makeup sales were up 7 and skin care up 14 according to NPD Group Inc Despite the fact that prestige is faring better NPD data brought good news for all purveyors of beauty Larissa Jensen executive director and beauty industry analyst at NPD noted that brick and mortar is driving more foot traffic thanks to better in store experiences Its something that has been in the works for a while these bricks and mortar spaces reinventing themselves to become more relevant so we might start to see some of that paying off this year Jensen said Improving the mass environment is a common goal among suppliers and buyers alike Elevation of the shopping experience is a main theme said Stefano Curti global president of Markwins Beauty Brands He said that will be achieved through technology that can allow beauty consultants the chance to interact with shoppers rather than just stock the aisles Retailers are doing their share too to burnish the store image CVS Pharmacy for example said its stores with a new elevated format are building bigger baskets At Walgreens the almost 3000 doors that have been updated and are showing positive results according to Lauren Brindley group vice president of beauty and personal care Some brands are starting to notice positive vibes too For instance CoverGirl executives say Coty Inc is seeing BEAUTY CARE REPORT early signs of stabilization in its consumer division which encompasses mass brands That business sector posted a 3 jump in sales which was a reversal from double digit declines prior to the launch of new campaigns and products for the Coty portfolio The refreshed efforts include new items for CoverGirl Clairol and Max Factor sold abroad Camillo Pane Cotys chief executive officer singled out the launch of True Blend Match Made Foundation In the spirit of the inclusive Fenty Beauty launch True Blend has 40 shades In prestige there are a few brands that have reached 40 shades but in the mass market this is not common Pane said during an conference call with analysts Pane added that Coty is going to react swiftly to market shifts We need to be faster to market and we need to develop more programs around trends he said We are and have already revamped the innovation process for what we call fast beauty to try to be much much faster to market Cotys Shannon Curtin senior vice president of North American Consumer Beauty added This is a pivotal year for the industry Other brands notably Revlon Markwins Yes To Maybelline Neutrogena and Rimmel also have clarion calls to compress the time it takes to get fresh products to the market In addition to speed to market LOréal is going all in on making products more sustainable The nimble indies such as e l f Cosmetics and Milani Cosmetics already are being lauded for their fast paced product launches The latter is expected to accelerate its growth thanks to investment from Gryphon Investors With that deal the company also gets the expertise of a seasoned veteran Michelle Taylor who is the interim CEO Retailers expect the company will be locked and loaded for major expansion with up tothe minute beauty trends the Taylor in fact wants to help democratize the beauty landscape At the end of the day consumers want the same end benefit and why should quality product be only lim limited to prestige Taylor said at the time of the announcement When you look at an Ulta format or even a lot of the brands that Sephora is bringing in or the breadth of assortment thats available digitally theres a real democratization of beauty Also in a new role and promising more innovation is Bill George who recently assumed the CEO title at Freeman Beauty George came from Markwins where he is credited with putting a spark Continued on page 25 ÔFast beautyÕ has slow suppliers playing catch up NEW YORK Mass market beauty shoppers used to be willing to save money and wait for a trend to hit their local drug or discount store But that was before fast fashion retailers ushered in runway to aisle apparel at stores such as H M and Forever 21 Add to that social platforms like Instagram spew out new looks daily Shoppers want new and they want it in a flash Unfortunately legacy beauty brands arent built for speed Many devote countless months to brand development including focus groups The advent of direct to consumer brands have changed the beauty landscape Winky Lux for example can get a new item in the market in 45 days Using 3D printing Taste Beauty was able to create a mold for its own beauty version of L O L Surprise in less than a month after the item became a sell out Christmas success The rise of fast beauty is encouraging both large and small brands to rethink the product creation time line Markwins Beauty Brands for example has initiated a beauty incubator within the company that has at least four projects in the pipeline according to global president Stefano Curti Executives at Coty Inc and Revlon Inc also said they are trying to compress the speed to market of beauty to strike while styles are hot Coty in fact has a team dedicated to jumping on trends The company is using more third party producers to move with alacrity E l f Cosmetics has been a forerunner of fast beauty often racing new trends to mass doors at the same time or even before prestige brands And the company keeps getting quicker Four years ago e l f was launching around 40 products a year with an average time to market of 32 weeks For 2017 the business launched 120 products with an average time to market of 22 weeks Jumping onto popular culture is a hallmark at Taste Beauty which has had hits with items like Glamspin a gloss spinner and Bye Felicia Pop culture is more relevant in the beauty world than ever said Alex Fogelson cofounder and managing partner of Taste Beauty We have the expertise and capabilities to bring these products to life Our speed to market is second to none The use of 3D printers plays heavily in the compression of the production cycle The Glamspin for example took only four weeks from concept to delivery ColourPop now sold at Ulta Beauty Inc is also singled out as a major fast beauty player A new startup called Be for Beauty is planning to unfurl 25 brands in the next three years A component of fast beauty sources said is not being afraid to fail with some attempts Executives said failure is OK but to fail fast One caveat is that fast needs to deliver on consumer needs Nielsens Jordan Rost cautioned that consumers want credibility If youre just chasing the next big thing and lose credibility thats not going to resonate Brands are already dealing with an incredibly crowded shelf Chain Drug Review June 4 2018 21