Beauty Store Business

MAR 2015

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60 March 2015 | News ZAO ORGANIC MAKEUP PRODUCTS LAUNCH IN NORTH AMERICA Zao Organic Makeup has announced the North American debut of its cosmetic line, which includes lipsticks, powder and liquid foundations, blushes, eye shadows and brushes. The company offers vegan, gluten-free, cruelty-free products with certifications from Ecocert, CosmoBio and the Campaign for Safe Cosmetics. Currently, Zao products are used in 32 countries by models, actresses, professionals and women in their everyday lives. "We discovered that there is a perception among women that organic makeup doesn't work, so we were extremely pleased to find that Zao has an excellent reputation for remarkable performance," says Zao com- pany director Antonio Ruiz-Esparza. Made in Italy, the creators of the brand are known for their rigorous R&D standards, and hold expertise in textures and bright colors as well as long-lasting and expert finish. "Our customers tell us continuously that they love how it performs—not only covering and enhancing, but that it is long-lasting and leaves the skin feeling soft," adds Ruiz-Esparza. Image courtesy of Zao Organic Makeup PRESTIGE COLOR SHIFTS AWAY FROM NAILS TOWARD EYES & LIPS, SAYS NPD GROUP As the highest U.S. prestige makeup growth segment in terms of dollars and units from 2009 to 2012, nails were all the rage a few years ago, but today color is shifting to the eyes and lips, according to global information company The NPD Group. "The shift in where women focus their color needs and desires is a natural one, and it will no doubt change again," says Karen Grant, global beauty indus- try analyst, The NPD Group. "Color is key when it comes to makeup. It's the area where consumers play with fashion and are willing to experiment as they seek ways to make bold statements and refresh their look." Eyebrow makeup and eye shadow are two areas that saw the most growth within eye makeup in the 12 months ending November 2014 (34% and 9%, respectively), while lip color (13%) drove growth in lip makeup. In contrast, color enamel prompted the nail segment's dollar decline, with a 10% drop in sales. "Consumers are paying attention to the marketing focus around eye and lip color, and responding to multicolor pallets that have become more prevalent, but that is just part of the dynamic at play," adds Grant. "Marketers and con- sumers are seeing that makeup and color are affordable ways to try what's new and in vogue. Much of the power lies in speed of response and putting that in the hands of trendsetters as well as the early adopters. This responsiveness to the consumer environment will continue to shape the future of color in beauty." ONLINE SHOPPING PROVES SUCCESSFUL FOR BEAUTY SECTOR Forty-seven percent of U.S. online shoppers of beauty and personal-care products have shopped more frequently in 2014 than 2013, according to a recent study out from A.T. Kearney. "Beauty and the E-Commerce Beast: 2014 Edition" lays out the results of a consumer survey of online beauty and personal-care shoppers. The research found that beauty and personal care—an industry traditionally rooted in the ability to touch, smell, sample and experiment with products in stores—is being played by a new set of rules. The results of the study are encouraging for some and may be threatening for others, but one thing is certain: Ecommerce is now an integral part of the business of beauty. The study also found that: • Prestige beauty and personal-care products have higher online shopper penetration (11%) than mass products (6%). • Amazon is dominant with 73% of online beauty and personal-care shoppers, followed by Wal-Mart (42%) and Sephora (35%). In the survey, participants also revealed a significant increase in shopping for more experiential products, such as fragrances and color cosmetics; both saw a 16% increase over 2012 in the number of people who frequently purchase these items online. Hana Ben-Shabat, A.T. Kearney partner and co-author of the study, says, "Beauty online is so much more than just a transaction. It's, in fact, one of the most active categories on the Internet. So online is becoming one of the most important paths to purchase. And those who buy beauty products online make frequent purchases. For example, what we're seeing in the 2014 study is that there is an increased willingness on the part of consumers to buy fragrances and makeup online versus habitually used products that they simply replenish." At sales of $4.3 billion and growing, online sales in beauty and personal care represent 6.5% of total sector sales. The study found that beauty categories, such as skin care, have above-average ecommerce penetration compared to personal-care products, such as bath or hair care. Kosha Gada, A.T. Kearney principal and co-author of the study, states, "As ecommerce penetration is still only an estimated 6.5% of the total category today, the store remains the main channel for beauty and personal care. But the role of the store is shifting from a transactional platform to an experiential one, and increasingly every consumer who walks through the door is doing so armed with product information and opinions to a degree unlike ever before. This requires brands to rethink elements such as shelf planograms, retail staff- ing, and integration between online and in-store experiences." Ben-Shabat adds, "It's no longer sufficient for beauty and personal-care brands and retailers to invest experimentally in digital. Winning companies are those that can figure out how to make the link between online and off-line, digital and physical. And collaboration between manufacturers and retailers in the quest for engaging today's online consumer is more important than ever before." In addition to the analysis of the survey data, the 2014 "Beauty and the E-Commerce Beast" study provides a segmentation analysis of online beauty and personal-care shoppers—of which 50% are defined as "creatures of habit," those who purchase online to replenish items they are familiar with. This type of shopping behavior gave rise to a variety of "replenishment programs" offered by some online retailers. A resounding 38% of the survey participants reported having subscribed at least once for such a program.

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