BW Confidential - Issue #1 - April 2010 - (Page 16)
An extract of interviews, market reports and industry analysis from BW Confidential’s electronic publication
Recession strategies Analysts predict that a new frugality and emphasis on value for money will stay with the consumer long after the recession is over. So how can the industry adapt? By offering more accessible price points, says AS Watson UK gm Jeremy Seigal: “There are no entry price points. If you have a loyal consumer you want to give them an accessible treat. You can always upsize, but you need to have an accessible price point”. He criticizes suppliers for doing exactly the opposite in a period of recession. “Why are brands putting their prices up? When times are bad this goes against all economics”. Social networking Instead of worrying about damage to brand equity and a distant return on investment, beauty management should perhaps look at how social media will change the organization of their marketing teams. Companies are looking at how to create better cooperation between traditional and online marketing teams, and who should be involved in social media—from PRs to marketing directors to customer relations officers. But the current structure in many companies is still holding back development in social media.
Category management In prestige there is often said to be much confusion and ambiguity over what category management means. “The prestige industry doesn’t really understand the issues at stake. Category management means that the shopper is at the center of the discussion, but this is not a language the industry is used to,” says merchandising and design agency Mathemapartners associate director Sébastien Tourné. A study by beauty group Coty showed that when it comes to shopping, only 22% of consumers in store made a fragrance purchase. Boosting the fragrance category One of the problems with fragrance is that the penetration rates are not that high. However, a lot could be done to bring more consumers into the fragrance market. Critics say that marketers focus too much on youth, and that the scents and sometimes racy advertising campaigns have turned off older consumers. Price too may be a turn-off. Consumers, especially in today’s climate, don’t necessarily want to spend $60 just to try something new and may find they don’t really like it once they get home.
Wellness & spas
Spa loyalty A long-term strategy to increase client loyalty is to promote the wellness aspect of treatments. While traditionally clients book a spa as a treat, the aesthetician could focus on the wellbeing or health benefits of the treatment and the need to return to the spa to feel the full effect of these benefits. Incorporating sustainability How can spas better incorporate sustainability? Wuttke Group consultancy Mark Wuttke principal comments: “sustainability-wise, there’s a tsunami and a perfect storm developing— if you’re not ready for it there’s no way you can catch it once it’s passed. This applies more to spas than other industries. Spas are associated with hospitality, which is a gross [abuser] of energy and resources. If spas don’t self-regulate and take a leadership role someone else will.“ Gifting One-third of all spa treatment revenue in Europe is generated from gift certificates, says spa marketing company SpaFinder Europe. Spa association ISPA also states that 37% of its members polled in a recent study claimed that a gift certificate was the main reason why their clients visit a spa. Gifting also broadens spas’ reach and popularity and is helping the industry grow. Wellness vs pampering High unemployment and lower consumer spending have seen spas scrambling to alienate themselves from the pampering label, and position themselves more as places of health. “Because spas and luxury properties went hand in hand, [operators] need to be conscious of the fact that suddenly spas may be seen as a luxury indulgence. The challenge is going to be to change the perception and to make spas what they have always been—a stress reliever,” notes Smith Travel Research vice president Jan Frietag.
April 2010 - N°1 - BW Confidential
Table of Contents for the Digital Edition of BW Confidential - Issue #1 - April 2010
Update - Brand and retail recap
Take note - Market facts, figures and trends
Launches - The latest fragrance, skincare and make-up launches
Best of BW - Market highlights
Interview - Sephora international & development md Olivier Schaeffer
Insight: make-up - Category overview
- Industry viewpoint
Wellness report - Overview
- Industry roundtable
- Spa case studies
Travel retail - Europe: little chance of a rebound
Market watch: Western Europe - Regional analysis
Radar - Six up-and-coming beauty brands
Packaging special - Industry analysis
Last word - UBS analyst Nik Modi's outlook for 2010
BW Confidential - Issue #1 - April 2010