Micro-targeting millennials, Lancôme teams with Sonia Rykiel, beauty remains the fastest-growing category in global travel retail, and Stella McCartney skews young with latest fragrance.
Micro-targeting Millennials
The term Millennial as a grab bag way for brands and marketers to reach out to the second largest segment of the Australian population after Baby Boomers is coming under long-overdue scrutiny in the US and Australia. Every generation has gone through the same process of approaching a key dilemma. A generation spans 18 years and the youngest cohort often has little in common with the oldest. Millennials - those born between 1981 and 2000 - can be as young as 16 or as old as 34.
I interviewed a senior executive from a major prestige beauty brand recently. She told me that the brand had undertaken in-depth research to survey the attitudes of the three main verticals that make up the Millennial generation - school age, 18 to 25 year olds and 26 to 34 year olds. It came as a shock to discover that some of the older ones were nostalgic for a best-selling product launched 16 years ago.
A new report from the Shullman Research Center in the US, where Millennials have already overtaken Baby Boomers as the largest generation, says it is imperative for marketers to micro-target the main groups. Not least because of the huge variation in purchasing power. The youngest micro-generation - 16 to 18 year olds - have very limited buying power. The next cohort - 18 to 25 - are often still studying. The sweet spot, particularly for beauty companies, are 25 to 30 year olds, especially if they live at home. Known as KIPPERS (Kids in Parents Pockets Eroding Retirement Savings), McCrindle Research estimates that the Aussie variety saves up to $15,000 a year by living at home.
Millennials make up 20 per cent of the Australian population, and the median age to tie the knot is 29 for men and 28 for women, says the Australian Institute of Health & Welfare (AIHW). The Shullman report tracks a similar trend in the US. Young people in their 30s earn more but, like their parents before them, they become more interested in buying property and worry about the expense of bringing up children.
Millennials may be the first generation to grow up in a technology-dominated society, but biology hasn't changed. Many brands and marketers talk about Millennials as if they are all free of adult responsibilities. Not so, says the AIHW. Australia is going through a baby boom bigger than the original one which began in 1946.
Just over 300,000 babies are being born each year, and 85.7 per cent of mothers are Millennials. The dominant age for child-bearing is 25 to 29 - 32.2 per cent of all births - followed by 30 to 34 year olds at 28.2 per cent. Teenagers still account for 7.2 per cent of births. Women aged 35 to 39 account for only 11.7 per cent and women over 40 for 2.6 per cent.
Lancôme teams with Sonia Rykiel
Sonia Rykiel is a true legend. Aged 85, she was once known as the queen of knits and was the first designer to put seams on the outside of clothes. In 2009 and 2010, she launched two collections for H&M. Four years ago, the Fung Group - the investment company owned by Hong Kong billionaires Victor and William Fung - acquired 80 per cent of the Sonia Rykiel fashion house to increase sales in Asia and the US.
In 2014, Julie de Libran, formerly studio director of womenswear for Louis Vuitton, was appointed artistic director of Sonia Rykiel. A milestone move that fast-tracked further expansion. Lancôme have announced a limited edition makeup collection in collaboration with Sonia Rykiel, slated for a global launch in August.
Fragrance has long been a major focus. Twelve fragrances have been launched under the Sonia Rykiel banner, including 7e Sens in 1979 and Rykiel Woman Hot! in 2007. Rykiel also carved out a reputation for laidback Parisian insouciance in her choice of runway makeup from the disco era to the present. "Sonia Rykiel embodies the Saint Germain spirit, the idea of happiness in one's own image", says Francoise Lehmann, managing director of Lancome International.
Beauty remains the fastest-growing category in global travel retail
The global travel retail market shows no sign of coming off the boil. Fuelled by global shoppers, particularly from China, the Middle East and South America, worldwide sales are expected to reach US$98 billion by 2019, reports Technavio. Fragrance, personal care and cosmetics are the fastest-growing sector, says the analyst, and the second largest overall. Perfume and beauty sales achieved a 29.21 per cent share of the US$60 billion global duty-free market in 2014.
The Asia-Pacific and Middle East regions are key for duty-free beauty sales, with luxury brands such as Chanel, Christian Dior, , YSL Beauty and Giorgio Armani Beauty enjoying major upticks in revenues year-on-year. Incheon Airport in Seoul posted record duty-free sales of US$2 billion last year. Over the past few years, Estée Lauder has established outlets which offer its full range of luxury brands in the United Arab Emirates and Detroit Metro Airport, a leading US hub for Asian destinations. Chinese travellers were responsible for 25 per cent of global duty-free purchases in 2015, reports Technavio.
Fashion and accessories are the biggest category in travel retail with a 32.1 per cent market share. Wines and spirits rank third and sales are expected to reach US$13.4 billion by 2019. A year after the number of outbound international travellers is projected to reach the magic one billion passenger mark.
Stella McCartney skews young with latest fragrance
Most of Stella McCartney's fragrances - 15 in all - were made in partnership with L'Oréal. In 2013, the designer's fragrance license shifted to P&G, and will move again to Coty mid-year. Her last hurrah from P&G is Pop, a floral/woody based on tuberose and sandalwood, aimed at 20-somethings.
Canadian singer-songwriter Grimes fronts the ad campaign. The packaging is made from paper from sustainably managed forests. Launching in Sephora, Stella McCartney stores and online later this month, there's also a special capsule collection of products, including a lip-shaped iPhone case, a keychain and McCartney's signature Falabella bag in a new range of colours.
Snippets from the wires
- Sales of natural perfumes are on the rise. Weleda, the Swiss biodynamic beauty brand, recently expanded distribution in Australia to department stores and online. Way back in the 1930s, the company launched a lavender water and eau de cologne. But to signal its growing presence in more upmarket outlets, Weleda is launching a trio of fragrances called Jardin de Vie. Made with natural essential oils, natural fragrance lovers can choose from Rose, Agrume ( sea buckthorn) and Grenade ( pomegranate).
- Henkel, the maker of Schwarzkopf, missed out on some prized haircare brands during the big P&G sell-off. The German giant has announced it's looking for growth in emerging markets. To help reach the sales goal of 20 billion euros (AUD$29.61 billion) for 2016, Henkel has acquired the Pert, Shamtu and Blendax haircare brands from P&G.
- The global nail category isn't growing as fast as it was a few years ago. Gel polish is the exception, reports MarketandMarkets. The researcher estimates the market for UV nail gel will reach US$59.31 million in the US alone by 2020. Leading players include , OPI, Orly, Sally Hansen and Revlon.
- has been awarded the prestigious ROBIE Humanitarian Award for her empowerment efforts. Run by the Jackie Robinson Foundation, named after the first African-American to play in the major baseball leagues, Ms Brown was cited for her Pretty Powerful ad campaigns in 2010 and 2013.
- Giorgio Armani Beauty has also launched an inspirational global campaign linked to Si, the brand's best-selling fragrance. Three videos have been released to inaugurate the Si Women's Circle, with two more to be launched later in the month. Profile subjects include Brazilian chef Helen Rizzo, voted the world's best female chef in 2014, Parisian comedienne Kee-Yoon Kim, ballerina Charlotte Ranson, pianist Yuja Wang, and technology entrepreneur Cecile Schmollgruber, CEO of Stereolabs.
