L'Oréal cuts ties with Michelle Phan, Estée Lauder sets clear growth targets, L2 gives Gillette genius digital IQ ranking, and Inglot to triple number of global stores.
L'Oréal cuts ties with Michelle Phan
It was the sort of deal vloggers worldwide could only dream of. Two years ago, Michelle Phan launched a 250 SKU makeup range backed by L'Oréal. Called Em - Vietnamese for sister - the average price points were US$23 and more. L'Oréal waxed lyrical and hailed the much-hyped venture as a new business model offering the multinational the chance to build an entire range online.
In a less-publicised move, L'Oréal began retailing Em through the Amazon Luxury Beauty Store in July 2014. According to analysts, even though the brand had grown to 315 SKUs by that stage, it never really shook off the startup tag. Another dampener on success was the above-US$20 RRPs which proved too expensive for many of Phan's followers.
L'Oréal will sell the brand to Ipsy, the subscription box service co-founded by Phan which recently scored US$100 million in funding. The canny entrepreneur isn't daunted. "I'm grateful that L'Oréal believed in me and helped me with my dream of creating a beauty brand," says Phan. "I'm excited to be working with Ipsy to bring Em home to my community, the original inspiration for the brand".
Estée Lauder sets clear growth targets
In its annual report, has pinned further growth on Millennials and the prize group the multinational calls the Ageless Consumer - women over 50. The company is also dependent on two other major pillars - the US and the UK. The two markets that account for 45 per cent of its worldwide sales.
The UK is the largest market in the EMEA region - Europe, the Middle East and Africa - which racks up 38 per cent of Lauder's global revenues. Better yet, the country is still posting double digit growth. Lauder's sales in the UK grew faster than the prestige beauty market as a whole, largely because of new freestanding stores near major transport hubs and in second and third tier cities. Translation: outside London.
"Our team in the United Kingdom, our second largest market, is producing remarkable results with net sales in constant currency growing in double digits" says CEO Fabrizio Freda. The British capital played its part, of course. Other major contributors to Lauder's bottom line were the opening of a Smashbox shop in trendy Shoreditch and a pop-up mall with fashion and lifestyle stores in East London.
Emerging markets remain red-hot prospects. Lauder expects key countries to account for 25 per cent of its global sales over the next 10 years. "We continue to focus resources on our group of emerging markets, including Russia, China, the Middle East, Turkey, South Africa and Mexico, and this strategy is a key building block of our international growth" notes Freda. made strong gains in emerging markets over the past year and is Lauder's biggest brand in Brazil, the Philippines, Turkey and southern Africa.
L2 gives Gillette genius digital IQ ranking
New York think-tank L2 has a separate Digital IQ Index for beauty and personal care. L'Oréal and Estée Lauder have genius rankings among the cosmetic giants. But and nappy brand Pampers are the big two atop the 72 personal care brands rated for their e-commerce, search marketing and social media prowess.
The shaving giant's latest effort confirms the accolade. As a tie-in to the new James Bond movie - Spectre - premiering in Australia and the US in November, Gillette has unveiled a Bond Moments campaign. Men will be invited to share their own stories by using #BondMoments, following tips and tricks to be secret agent-ready.
We won't dwell on the brands L2 dismissed as average, challenged or feeble for their digital efforts. The big names that earned a Gifted nod included , Olay, Neutrogena and Burt's Bees.
Inglot to triple number of global stores
The name Inglot still provokes a blank stare even from beauty mavens. Yet the 30 year old Polish brand is a global leader in colour cosmetics. With 14 stores in Australia and more to come, international expansion only began in earnest in 2006. Today, Inglot operates 530 boutique stores in 70 countries and is stocked by leading department stores such as Macy's and Sogo.
Founder Wojciech Inglot, an entrepreneurial chemist, sadly died two years ago at the early age of 57. Four years after creating O2M, hailed as a truly "breathable" nail polish. Many women worldwide loved the health benefits but the product became a huge hit with Muslim women. Why? Because the revolutionary formula allows oxygen and moisture to pass through, making it acceptable for wear during prayer. Inglot has announced plans to open 220 stores across the Gulf region in Saudi Arabia, Bahrain, Qatar, Oman and the UAE over the next five years.
Inglot has plenty more to offer and produces one of the largest make-up ranges in the world with a vast array of lip, eye and nail products. The brand's iconic Freedom System allows consumers to create customised palettes. The Middle East expansion is part of a much larger strategy to triple the number of Inglot stores worldwide to 1500-plus by 2020.
Snippets from the wires
- In 2007, Dior took the decision to double its turnover by focusing on "real luxury". The move has paid off and the brand's couture division has increased sales by 60 per cent over the past four years. Global revenues for the 12 months to June rose by 18 per cent to 1.75 billion euros ( AUD$2.71 billion). According to CEO Sydney Toledano, Dior is on track to reach annual revenues of two billion euros (AUD$3.1 billion) next year.
- According to The Wall Street Journal, the big social media networks will continue their stranglehold on digital advertising revenues. Google is way out in front, followed by Facebook which pulled in US$6.8 billion in the US alone last year - 25 per cent of the total market. Twitter was responsible for 5 per cent of the US digital ad market - US$1.34 billion.
- The Brazilian beauty market has lost some of its shine, thanks to soaring inflation and a slowing economy But the men's grooming sector is on fire. Sales of shaving products, deodorants and haircare have doubled in the past five years to US$4.7 billion reports Euromonitor. The researcher estimates growth to US$6.7 billion a year by 2019.
- Montblanc, the German luxury goods company, has been kicking major goals in men's fragrances over the past few years - notably the Emblem and Legend franchises. Beauty eds recently received news about the first Montblanc fragrance for women - Lady Emblem. The company has extended its global licensing agreement with Inter Parfums for another five years - from 2020 to 2025.
- Mobile shopping is soaring. PayPal experienced US$46 billion in mobile payment volume in 2014 - a 68 per cent year-on-year increase. Beauty is a major beneficiary. Last year, 38 million PayPal consumers shopped in health and beauty. The US leads the way with 15 million purchasers spending US$2 billion out of a global total of US$6 billion.
- Luxe perfumer Creed was founded in the UK in 1760. The privately-owned firm based in France has returned to its roots by opening a gorgeous boutique in Mount Street in Mayfair - all marble, brass and faceted mirror ceilings.
- Moschino fragrances have a long history of retro, campy bottles. The Italian brand's latest fragrance is simply called Fresh. The global ad campaign features supermodel Linda Evangelista in a pastel blue robe with matching eyeliner carrying the bottle that looks like a clone of Windex.
