With Today’s Consumers
Gaining a competitive edge in today’s retail market poses
a unique set of challenges, and the panel assembled at the
Cosmetic Executive Women’s (CEW) Women & Men in
Beauty Series “Retail Revolution—Connecting with Today’s
Consumers” event tackled the questions surrounding those
challenges with strategic insights. The presentation featured
speakers Shannon Curtin, divisional vice president and general
merchandising manager, beauty and personal care, Walgreens;
Karen Grant, vice president and global beauty industry analyst,
The NPD Group; and Chance Wales, director, category leader,
U.S. health and beauty, Amazon.com.
The panelists were welcomed by Carlotta Jacobson, CEW
president, who introduced the presentation, and noted,
“Consumers today are so inundated with so many brand
messages that they are experiencing information overload.
These three industry leaders know firsthand how to connect
successfully with consumers in our modern competitive
marketplace.” Jacobson also thanked the evening’s sponsors and
introduced Jill Scalamandre, CEW chairwoman and moderator
of the discussion.
Connecting with consumers through the influential realms of
digital technology and social media, as well as with innovative
brick-and-mortar approaches, must first and foremost align
with consumer shopping habits. This was the premise upon
which the three panelists approached the evening’s discussion.
Amazon’s Wales brought his perspective to the discussion with
an overview of the vast online retailing website, noting that as a
$48 billion global company, Amazon’s sales are significant and
customer service is essential. He noted, “Health and beauty is a
growing segment of the business, and Amazon.com customers
account for 74% of customers who buy beauty products.” He
also noted that Amazon.com wants to provide an outlet for
consumers to discover and research harder-to-find brands and
Walgreens’ Curtin said, “We’re slated to be a $130 billion
company in 2016 and are planning to become best in beauty
retail, and are utilizing a range of entities together to do that.”
She highlighted Walgreens partnerships with Boots.com, Duane
Reade and DuaneReade.com, Beauty.com, Drugstore.com,
as well as Walgreens.com and DiscoverBeauty Within.com as
additional outlets for the retailer.
The NPD Group’s Grant addressed the retail trends question
with a look at what has been and will continue to be successful
as businesses emerge from the recession. “Retail trends really
depend on the channel. As we come out of the recession, we’ve
seen a strong performance in prestige, with 11% growth in
2011, and a 6–8% growth in the first half of 2012. This category
in beauty has grown by a billion dollars since the recession.
10 Added Value
It is a robust business in prestige.” Mass has also seen growth
in 2011 and 2012, but at a slower rate. Grant noted “There are
fundamental differences between prestige and mass, and we’re
seeing those in direct to consumer sales, which have risen by
26%. The online space is seeing above 10% growth, particularly in
the prestige area.” There is also significant growth in small niche
makeup and skin care brands, including color innovation, lip
hybrids, BB creams and brightening serums.
Curtin noted the popularity of particular categories as well,
including the growth of the nail category and the popularity of
BB creams. She also noted increased performance and growth
in areas utilizing beauty advisors at Walgreens, as well as
online, saying that the largest growth for Walgreens has been in
categories where there is an educational component. She added
that Walgreens believes consumers should be able to shop across
all platforms as they desire. And as Amazon.com currently aligns
with brand pages, including BeautyBar.com and Soap.com, Wales
said, “We’re seeing good strength in mass as well as prestige, and
as we add more prestige, we’ll be able to spin that category more.”
Grant commented that she is seeing a unit increase in
fragrance, particularly in categories such as niche brands. “Niche
brands are also doing great business in skin care and makeup,
as well as lip color, and there is continued momentum in mass.
However, there are also huge opportunities for prestige,” she said.
“Customers want the best price possible, and the service element
is also very important. We’re seeing the prestige shopper as a more
engaged shopper, shopping across channels. She loves beauty.
The beauty category also appeals to the economically depressed
consumer, who will pursue the products she wants. There is a split
between the love of beauty and the engagement with it that really
drives the category.” Grant added that changing the conversation
at the store to more fully engage with the consumer is key.
Knowing the Consumer; Engaging in Conversation
Curtin noted that Walgreens knows the young, confident
woman and how she shops, and added, “We want to provide
that experience for her. We have brick-and-mortar as well as
online platforms, and we watch how our consumer shops.”
Wales commented, “At Amazon, we want customers to discover,
research and buy whatever kind of product they want. The
convenience aspect of shopping at Amazon is key for beauty. We
also see what customers do when they come to Amazon, looking
outside the beauty channels that they visit.”
Wales also indicated that Amazon wants to hear from the
different beauty brands to ultimately give customers what
they want, which is more selection. “We custom build brand
pages on our site with new products, and have added celebrity
spokespersons to that space. We’re also seeing people browse
more, where in the past they’ve gone directly to the products they
wanted,” he said.