Beauty Store Business

AUG 2014

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96 August 2014 | beautystorebusiness.com Skincare Spotlight I THE BIANNUAL WWD BEAUTY CEO SUMMIT, HELD May 7-9 at The Breakers in Palm Beach, Florida, brought together more than 300 beauty executives, both "Davids" and "Goliaths," industry giants and newcomers. The theme of this year's summit was Metamorphosis, and Winston Churchill's famous quote was regularly referenced: "To improve is to change; to be perfect is to change often." Here are highlights from three of the most powerful presentations. LOOKING BACK, LOOKING FORWARD My favorite presentation of the summit was that of Gail Federici, CEO of Federici Brands. She was John Frieda's business partner, co-created Frizz Ease and sold her first business for hundreds of millions of dollars. Yet when she came on stage, she was humble, shy even and nervous— which made her message all the more powerful. This presentation was the perfect anchor to every- thing else; as she was looking backward in order to look forward. Looking to the past to transform the future, she discussed the key strategies that were the source of her original success and addressed how they measure up in today's changing landscape. Here were the rules to her success in the 1990s: 1. Don't follow anyone else's rules. "We never modeled our behavior based on the competi- tion, and the difference was our authenticity." 2. Seek out BGOs = Blinding Glimpse of the Obvious. "We were always looking for a gaping whole in the market that had been overlooked. And we found our first BGO in frizzy hair, which led us to create the first-ever serum for frizzy hair, Frizz Ease. It always seems so obvious after the fact." 3. Make the medium into the message. "We thought about shelf space as our advertising space and used the packaging to help communicate the mes- sage—glass dropper bottle was serious, serum-friendly and professional. There was nothing like it in the industry." And here she adds: "We're short on money, but we're long on strategy. We must outthink because we can't outspend." 4. Show and sell = PR. "John Frieda appeared in over 100 TV shows demon- strating the product. Only expenses were travel. This was the best way to communicate our message." 5. Conscious coupling. "It's all about distribution. We decided to go exclusively with drugstores, to give them an edge and keep the exclusivity of channel." Fast forward to 2014, with the trends of globaliza- tion, flattening of the market, the information age. Do these rules still apply? She answers yes to the first three. She still creates her own rules, still obsesses about the next BGO and still works to making the medium the message for any new product she launches. But the world of PR has changed, as there is so much "pay to play" now in particular on TV, which remains a key visual medium. Social media has also emerged, which did not exist 25 years ago. She admits she is "not jumping on the social-media train" because she just hasn't figured it out for the world of beauty—yet. The distribution landscape has also changed. There has been massive consolidation; drugstore accounts are a fraction of the size that there was, which means there is so much power in the hands of very few. "Consolidation tilts the power away from the smaller guys, but the Internet can help level the playing field." Some rules still apply, yet some of the rules need to be recreated. The other two presentations that I loved the most centered on the hair segment of the industry, namely hair color and hair salons. Both Amy Errett of Madison Reed and Alli Webb of Drybar are transforming the hair industry—not with a new product per se, but with a new service, a new experience, a new solution to consumers' needs and pain points. A NEW MODEL FOR AT-HOME HAIR COLOR Amy Errett, CEO of Madison Reed, founded her company this past February. Her company was the most nascent of those presenting and, in my opinion, the best repre- sentation "of the future." What is Madison Reed? For $30, the brand sends you a box of home hair color. Innovative? Of the future? It may not sound like it, but it is. Her main focus, the question she asks herself over and over again, is "What problem are we fixing?" Home hair color is the answer. Eighty-nine million women color their hair in the United States. "There is not a woman that doesn't think about her hair in the first 10 minutes within waking," she adds. What her company is addressing is her consumer's pain points: • She has no time to sit in a salon for hours to get her hair colored. • She doesn't want to go to a salon every three weeks. • She doesn't want to spend the money. The at-home application process is torturous. She watched women do at-home hair color and Highlights From the WWD Beauty CEO Summit Consider these powerful insights from industry leaders Gail Federici, Amy Errett and Alli Webb. by Ada S. Polla Image courtesy of Ada S. Polla "To improve is to change; to be perfect is to change often."—Winston Churchill S k i n c a r e S p o t l i g h t _ N o 1 8 1 4 . i n d d 9 6 Skincare Spotlight_No1 814.indd 96 6 / 2 6 / 1 4 4 : 5 2 P M 6/26/14 4:52 PM

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