LVMH drops Fendi fragrances, L'Oréal, Nivea, Dove and Chanel most recommended on social media, service crucial for affluent women buying luxury cosmetics, and the global shaving market to hit US$30 billion.
LVMH drops Fendi fragrances
Many fragrances are quietly consigned to the dustbin of scent history every year. But it's a rare event when all the fragrances of a leading fashion brand are discontinued. Early designer fragrances were an added bonus bonus for loyal clients but today they are critical to brand image and profits. A successful fragrance licence is a major pillar of many fashion houses and is often a bigger moneyspinner than the clothing and accessories side of the business.
The global fragrance industry is dominated by multinationals such as L'Oréal, Coty, Puig and LVMH, the world's largest luxury goods group. They pay royalties to the fashion brands for the licensed fragrances and the sales are logged on their own financial books.
made the switch from LVMH to Coty over a decade ago and hasn't looked back. But you can't say the French luxury giant didn't give Fendi a fair go. The company scrapped all of Fendi's older fragrances in 2009 and started with a clean slate a year later with the launch of Fan di Fendi. The new initiative failed to fire and LVMH has announced that - "the commercial development of Fendi perfume did not meet the expectations of the company".
Ten fragrances will be axed and excess stocks sold at discount - mainly online or through the grey market. Farewell to: Fan di Fendi and its five flankers - Extreme, Pour Homme, Eau Fraiche, Pour Homme Acqua and Assoluto and Blossom - and L'Acquarossa EDP, EDT and Elixir.
L'Oréal, Nivea, Dove and Chanel most recommended on social media
The latest research from Survey Monkey and WPP Social@Ogilvy goes beyond the usual numbers game popular in social media ratings. According to Bennett Porter, vice-president marketing at Survey Monkey: "We found that people had been using 'likes' as a measure online, but that's been the only measure and it's not that accurate or deep".
The US$544 billion a year ad industry needs to know more than raw figures. Media agencies and their partners should place far more emphasis on consumer engagement says Thomas Crampton, Global Managing Director of Social@Ogilvy. "Companies need to move beyond collecting likes and re-tweets with meaningless content".
Over 5600 people in 11 leading countries, who regularly use Facebook, YouTube and Twitter, took part in the survey. While 84 per cent of users reported 'liking' a favourite brand, only 58 per cent said they were willing to share good or bad experiences. Respondents in developed countries were less likely to consider themselves 'brand promoters'. In the US, for example, only 19 per cent would consider recommending brands to family or friends, in contrast to respondents in emerging markets such as China, Brazil and India. Quality - not just a brand name - is paramount in the US, with 93 per cent revealing that high quality is the number one reason for a personal recommendation.
The four beauty brands way ahead of the pack as most likely to be recommended on social media are: L'Oréal Paris, , and Chanel - according to the survey. Overall, Americans also love Costco, Nike and Samsung, while Brits are loyal to Marks & Spencer, John Lewis. Amazon and Aldi.
Service crucial for affluent women buying luxury cosmetics
Over the past few years, nearly every prestige skincare brand has upped its standards of service. recently introduced its new global service format to Australian clients - Selling With Class. offers Diamond Service, Sisley Paris has a VIP Programme and regulars at counters can indulge in the brand's High Touch Service. Lancome has completely rejuvenated sales of its Absolue franchise by introducing dedicated spaces in David Jones and Myer to become the number one premium skincare brand in Australia.
They've done the right thing says the Luxury Institute, a New York-based researcher, because women who are worth an average of $US3 million and earn US$289,000 or more still love the in-store experience when buying luxury cosmetics. Old-fashioned up-selling doesn't cut it anymore, though. Only 19 per cent of affluent women said they preferred to hear about fashions and accessories from a sales associate. In contrast, 30 per cent revealed they welcomed advice on skincare and cosmetics from beauty consultants at counter.
Cosmetic and beauty brands are way ahead of other luxury goods when it comes to online researching reports the Luxury Institute. Browsing a store website is the second most preferred way of shopping and learning about new products with 32 per cent of wealthy women and 23 per cent go straight to the brand's dedicated website. Yet in spite of the online and mobile resources at their fingertips, says the researcher, brands and retailers should not underestimate the potential of beauty consultants to influence and drive purchase decisions. Building rapport and relationships with beauty shoppers still provides a significant boost in sales across luxury skincare and cosmetcs, notes CEO Milton Pedraza.
Global shaving market to hit US$30 billion
is the jewel in the crown of P&G's personal care portfolio. Ten years ago, the multinational paid US$57 billion for the world's best-known shaving brand, one of the biggest buy-out deals in corporate history. Far and away the global market leader in the category, Gillette is poised to clean up as the worldwide shaving market is expected to increase by 7.9 per cent a year to US$30 billion by 2020.
That's the conservative estimate from Persistence Market Research (PMR). Latin America is expected to be the fastest growing region with sales expected to lift 17 per cent to US$10.8 billion - 36.2 per cent of the global market. But women worldwide are on track to play a significant role because shaving is a far more economical method of hair removal than waxing in most markets says the global researcher.
Wet shaving - blades, cartridge and regular razors - dominate the global shaving market and will increase their share of sales from 73.6 per cent to 79.9 per cent by 2020, adds PMR. Due to their higher cost, electric shavers account for 26.4 per cent of the global market and are expected to experience a decline in sales over the next five years.
Snippets from the wires
- Hyland Media recently retained the media account for Coty Australia. But ZenithOptimedia has been tapped as the global media agency responsible for the multinational's US$600 million ad budget. Following a hotly contested worldwide pitch, ZenithOptimedia will cover print and TV in the US and Canada and Western, Central and Eastern Europe and manage Coty's offline media in 15 major markets.
- Guillaume Jessel, a 14 year veteran of Estee Lauder, has been appointed Global General Manager/ Senior Vice-President, Beauty. His biggest project in his new role will be the launch of the brand in China.
- GlobeScan's 2015 Sustainability Leaders Report has tapped Unilever as the world's most sustainable brand. The giant multinational recently achieved its zero waste-to-landfill target and its next global goal is to improve the health and well-being of over 1 billion people around the world by 2020.
- We recently reported that P&G and L'Oreal have invested millions in technologies to develop artificial skin for cosmetic and pharmaceutical testing. According to Lux Research, 3D bio-printing of human skin will become a US$1 billion industry by 2025.
- Versace, Chanel, Dior and a host of other major fashion names not only survived the deaths of their founders, they have continued to grow at an increased pace. Alexander McQueen, bought by luxury goods group Kering in 2010, expects to double sales over the next three years to AUD$729 million. Increased sales in fashion accessories and Asia are expected to propel the upswing.
- H&M may be feeling the pinch of a strong US dollar but the Swedish giant has announced it will increase its global store count by 400 shops by the end of the year and enter new markets such as South Africa and India. Worldwide sales in the second quarter rose to US$783 million. Rival fast fashion retailer Zara also reported its fastest quarterly growth period for more than two years.
- The Competition and Markets Authority in the UK is investigating fake and/or misleading online reviews and endorsements across six major sectors, including beauty and grooming. The watchdog is also looking at the non-disclosure of paid-for endorsements on YouTube, Instagram, Twitter and blogs. The aim is to encourage the leading platforms to seek verification or accountability, rather than just let anyone post a review.
