Unilever in talks to buy Jessica Alba's The Honest Company, one in 10 Australian men buy grooming products online, Myer doubles full year profits, and it's true - taller Aussies earn more, says Roy Morgan.
Unilever in talks to buy Jessica Alba's The Honest Company
Just over a year ago, Unilever went on a prestige skincare shopping binge, snapping up REN, Murad and Dermalogica. There's been a major change of direction in corporate purchasing habits this year. Millennials of both sexes have become a strong focus. First with the $US1 billion buyout of The Dollar Shave Club in July, and now with the beginning of talks to acquire The Honest Company, the natural household, baby and beauty product brand launched by Jessica Alba.
Founded in 2011, Honest has become a big hit with young mothers in the US for its "green" disposable nappies, household cleaners and beauty ranges. Last year, the company raised $US200 million in funding from major money managers and venture capital firms to achieve a market valuation of $US1.7 billion. The bulk of Honest's $US300 million annual sales are via the company's website, but some items are also sold in leading retailers such as Target and Whole Foods.
The Unilever deal is rumoured to be worth about the same as The Dollar Shave Club acquisition - just over $US1 billion - which is a long way short of last year's market valuation. The Millennial push aside, the deal makes a lot of sense for Unilever. It would lessen the multinational's dependence on food, and offer direct access to the fast-growing natural household and baby markets, in addition to e-commerce and insight into consumer behaviour.
P&G were also rumoured to be interested in Honest a couple of weeks ago. If the Unilever price isn't deemed to be right, there's still the option of an IPO. Timing could be crucial, though. The IPO market isn't as buoyant as it was and investors are insisting that startups and fledgling companies should be firmly in the black.
One in 10 Australian men buy grooming products online
Aussie guys have consistently out-spent their female counterparts when it comes to e-commerce for some time. According to the 2016 Sensis eBusiness Report, they still claim the top spot when it comes to buying online. But over the past year, the average spend for men has dropped from $6500 to $3600 a year, while women have upped their online buying budgets from $2400 to $3100.
Men spend up big on takeaway food and video games, says Rob Tolliday, Sensis Commercial Director. "The purchasing behaviours don't follow gender sterotypes in all cases. The number of males buying groceries jumped this year, with very little now separating males and females. And one in 10 men are now also buying cosmetics online, which is half the number of women."
Security concerns remain a major issue for Australian online shoppers, reveals Sensis. A huge 85 per cent worry about their private information being stolen or misused, and the same percentage fret about their credit card details. Local sales continue to dominate purchases. Overseas purchases barely increased over the past 12 months from 21 per cent to 23 per cent.
Overall, the most popular items bought online are airline tickets (increasing from 47 per cent to 53 per cent), clothing, accessories and shoes ( increasing from 51 per cent to 57 per cent) and hotel reservations (increasing from 47 per cent to 53 per cent). A healthy 22 per cent of women bought cosmetics online, in contrast to 10 per cent of men.
Myer doubles full year profits
Myer's new Warringah store in Sydney, scheduled to open in November, will showcase the first visual incarnation of the "New Myer" turnaround plan. New upgrades are also in the pipeline at a number of key doors such as Maroochydore, Eastland, Doncaster, Chatswood and Pacific Fair. Since August last year, says CEO Richard Umbers, Myer has implemented over 850 new or upgraded brand destinations and improved customer service.
The strategy has already paid off. Myer doubled its full year profit to $60.5 million, as total sales climbed 2.94 per cent to $3.3 billion in the 12 months to July 30th. In a bid to boost productivity, Myer will increase capital investment in priority stores such as the newly opened Werribee store next year. But will exit underperforming stores in Brookside, Orange, Wollongong and Logan in 2017.
Debenhams announced the location of its first standalone store in Melbourne last week, the first of 10 small format stores to open in Australia. The heritage British retailer's core customer base is closer to Myer's consumer profile. But Australia won't be an easy market to break into, says Umbers. "I think we are well prepared to take on all newcomers, and I include Debenhams in that," he says.
It's true - Taller Aussies earn more, says Roy Morgan
Listicles of grooming tips or how much makeup to wear for a job interview are a dime a dozen on the Internet. Women can wear high heels, of course, but not too vertiginous as site after site warns to appear taller. But actually being tall gets you much further when it comes to earning potential, reveals Roy Morgan.
Elizabeth Arden, the founder of the iconic beauty brand, was renowned for only hiring tall, handsome male executives. She was not alone in the preference, says Roy Morgan. The average height of Australian men is 176cm, but men who earn $200,000-plus have an average height of 179cm. In fact, the smaller the pay cheque, the shorter the average height.
Three centimetres are also crucial for Australian women The average height of women earning between $40,000 and $50,000 is 163cm, increasing to 166cm for those earning $110,000 to $200,000.
According to Michele Levine, CEO, Roy Morgan Research: "The theory that tall people earn higher incomes has been circulating for years, supported by studies showing taller people are smarter, have better people skills and so on. Whether these are the reasons behind it or not, the latest data from Roy Morgan Research shows that there does seem to be a connection between height and income, particularly among men.
"Australian men and women of above-average height are also more likely than those of average and shorter height to agree with the attitude statement, 'It is important that I have responsibility in my job'. So which came first: the attitude or the height".
Snippets from the wires
- Over the past year many companies have questioned the wisdom of putting all of their ad spend into digital at the expense of traditional media. P&G recently pulled back on its ad expenditure on Facebook because response was lower than expected. Johnson & Johnson have now said the multinational won't be putting all of its ad spend into digital for key brands.
- Michel Bergerac, Chairman and CEO of Revlon for 10 years from 1975 to 1985, died last week at the age of eighty-four. He took on the position at the death of founder Charles Revson, but resigned after the takeover of the company by current majority owner, Ronald Perelman.
- One of the hottest trends in the men's shaving market is the return of grandpa's dual-sided safety razor. Vikings Blade, based in Melbourne, launched The Chieftain safety razor last year. Over the past 12 months, it has become the best-selling razor from a "non-major" brand on Amazon.
- In another landmark move to boost expansion in line with its Vision 2020 corporate strategy, Shiseido has partnered with global innovation agency FaberNovel to develop the Shiseido Digital Academy. The goal is to become "the most digitally advanced company in beauty."
- Elizabeth Arden is also delving deeper into digital to target younger customers, says President JuE Wong. Older Millennials perceive Arden as "their mother's brand", she says, but younger women and girls aged 25 and under don't have this preconception. The brand is rolling out a digital strategy aimed at targeting 18 to 25 year olds, backed by a social media campaign and its hugely successful beauty app.
- John Lewis, the heritage British department store, suffered a decline in profits of nearly 75 per cent in the first half of the year. Currency fluctuations and Brexit fears have been blamed for the downturn. The retailer is currently revamping its beauty departments in the UK and beauty sales were were up 4 per cent in the first six months of the year.
Image: @honest_beauty
