Toys, fragrance and women's sportswear fuel record Christmas spend, Avon in sell-off talks with private equity firm, experts call for end to free-from claims, and global wearable tech market triples in Q3.
Toys, fragrance and women's sportswear fuel record Christmas spend
The Australian Retailers Association (ARA) is bullish about this year's Christmas shopping spree, predicting the blow-out figure of $46.7 billion for the six weeks from November 15th to December 24th. Toys lead the charge, of course, but big kids also have plenty of look forward to says Russell Zimmermann, ARA Executive Director. "For adults this Christmas, we'll see a rise in products generally seen as traditional gift purchases such as apparel and perfumes, while electronics and technology is also predicted to be a moneyspinner".
Fragrances for men and women did really well last year says the ARA with an uptick of 77 per cent over the Christmas period. It could be more of the same in other categories, too. Phones and accessories saw the biggest jump during last year's festive season - 109 per cent, followed by women's socks (+92 per cent), personal entertainment and cameras (+92 per cent), women's hosiery (+88 per cent) and women's sportswear (+70 per cent). "The growth in women's sportswear for Christmas last year is evidence of the popularised trend that's been picked up by social media of women donning activewear as everyday fashion, as well as for sports activities" notes Zimmermann.
The ARA also predicts that Australians will spend $2.8 billion online this year over the Christmas shopping period. "The number of people doing their Christmas shopping from a mobile or tablet is expected to be the largest ever" adds Zimmermann. The click-and-collect trend is also boosting add-on sales notes the ARA. There's a huge incidence of shoppers buying online and buying other products when they arrive in-store to pick them up.
Avon in sell-off talks with private equity firm
The world's largest direct seller of cosmetics has been the subject of a number of buy-out hoaxes over the past year. Last week, wild rumours surfaced that Oprah was about to become a minority shareholder in the beleagured beauty giant. But a real deal could be in the offing with Cerberus Capital Management. According to insiders, is in advanced talks with the private equity firm to sell off its ailing North American business. As part of the transaction, Cerberus would also take a minority stake in Avon.
Most of Avon's revenues come from international sales but selling off its "home base" would be an emotional moment for the 130 year old US business icon. In a scenario worthy of a government trying to save a priceless painting for the nation, a US activist investor group including Barington Capital and NuOrion Partners has acquired a 3 per cent stake in Avon and believes the company doesn't need a cash injection to fix its woes.
The group issued a public letter late last week opposing the Cerberus deal and calling for management changes, including the replacement of current CEO Sherilyn McCoy. Avon's shares have plummeted 61 per cent this year and - as of September - the company was carrying US$2 million in debt.
Experts call for end to free-from claims
The campaign against parabens and other widely used ingredients in personal care products has long been viewed as "trial by marketing" by leading regulators such as the US Food and Drug Administration and associations such as the Cosmetic, Toiletry and Perfumery Association (CTPA) in the UK. An industry panel speaking at the recent in-cosmetics summit in London has called for an end to "free from" claims because they play on fear rather than facts.
The CTPA already advises its members to avoid "free-from" claims. Not only do such assertions imply that there are safety concerns over particular ingredients; they suggest that other ingredients are safer without scientific backing. " As formulators, we usually highlight the positives of our formulas, but with the proliferation of free-from we are under pressure from marketing - who highlight the negatives" says Dr Andrea Mitarotonda, Head of R&D for Neal's Yard Remedies. Chris Flower, CTPA Director General, nailed the issue with the comment: "We strongly suggest that safety shouldn't be used as a route to commercial benefit, as it suggests other products are inherently unsafe. We are all required to provide safe products and this kind of practice undermines the industry as a whole".
Global wearable tech market triples in Q3
It's hard to avoid the eye-catching Fitbit TV ads in the run-up to Christmas. Such an aggressive strategy is paying off says IDC. The market analyst reported that fitness trackers and the Apple smartwatch fuelled growth of 197 per cent in the worldwide wearable tech market in Q3. San Francisco-based Fitbit carved out a 22.2 per cent market share with unit sales of 4.7 million over the period. Apple did not disclose sales but IDC estimates the tech giant sold 3.9 million pieces to account for 18.6 per cent of the global wearable tech market.
"China has quickly emerged as the fastest-growth wearables market, attracting companies eager to compete on price and features" says IDC analyst, Ramon Llamas. Xiaomi, the Chinese electronics company experienced a unit sales jump of 800 per cent in Q3 to snare a 17.4 per cent global market share, mainly due to its reasonably priced Mi Band fitness tracker. Garmin, the global leader in portable navigation systems, also did well in the US and Australia by focusing on wearables for jogging, golf, swimming and hiking.
Swiss watchmaker TAG Heuer launched its high-end smartwatch in October - the first Android Wear watch to break the US$1000 barrier - and has already received requests from retailers and subsidiaries for over 100,000 timepieces. Modelled on the brand's classic Carrera, TAG plans to develop a collection in late 2016 or early 2017, inlcuding a gold and diamond set version.
Snippets from the wires
- There's an avalanche of beauty stories for women outlining the effects of winter weather on the skin. Bulldog, the British men's grooming brands, has added three extra care SKUs to its range to help men's complexions withstand the cooler months - Intensive 24hr Moisturiser, Original Hand Cream and Original Lip Balm.
- The soap, bath and shower market is mature in developed countries such as Australia. According to Mintel, 40 per cent of global value growth in the category can be traced to emerging markets, with Indonesia, Vietnam, Turkey, South Africa and India leading the pack. The researcher predicts that sales of soap, bath and shower products will double in the "Big Five" through to 2020.
- Conde Nast has been undergoing huge structural changes in the US - shuttering Details magazine, re-positioning Style.com and waving goodbye to several key executives. But according to Comscore, the publisher's network of websites boasted 98.5 million unique visitors in October - a 36 per cent uptick from 72.2 million in October 2014. A result attributed to CEO Bob Sauerberg's strategy of increasing online staff and cutting back on print employees.
- OOH, out-of-home advertising, continues to surge in Australia. Net revenues of $74.3 million were reached in November - up 12.8 per cent on the same month in 2014. Year-to-date revenues have increased 16.6 per cent to $606.8 million - up from $520.7 million the previous year. Billboards are the preferred placements, followed by transport and retail and lifestyle.
- The global personal care/beauty packaging market topped US$20.5 billion last year reports Zion Research. The analyst estimates 4 per cent annual growth over the next five years to reach US$27 billion. Skincare packaging dominates with a 35 per cent total market share, followed by the haircare which is the fastest growing category. Asia is the world's largest personal care/ beauty packaging market - 40 per cent - followed by Europe, North America and Latin America.
- Most of us have heard the line - Our customers don't worry about price - from luxury brands. Maybe they don't worry but they certainly want to know. According to a new US study from US researcher Annalect, nearly 75 per cent of affluent consumers say they look for the best price when buying luxury goods.
