NYX to spearhead global travel retail expansion for L'Oréal, QVC's Beauty iQ a world first multi-platform beauty shopping experience, China on track to become world's largest beauty market, and changing demographics in New Zealand a growth opportunity for beauty.
NYX to spearhead global travel retail expansion for L'Oréal
NYX Professional Makeup opened its first Manhattan store in Union Square last Friday, October 28th. But L'Oréal has extensive plans to introduce the budget brand to worldwide travel retail in 2017. CEO, Jean-Paul Agon, famously dubbed travel retail as the "sixth continent" and he was on the money. Skincare became the number one product category in global travel retail in 2015, surpassing tobacco. While makeup is predicted to be the fastest-growing category over the next five years.
NYX will spearhead a much larger initiative for L'Oréal in travel retail next year. The heritage fragrance brand, Roger & Gallet, founded in 1862, is currently being reinvented in China where there are now eight concept stores, to springboard into airports with a high flow of Chinese global shoppers. Niche perfurmery has also been tagged as a major growth area. Atelier Cologne, recently acquired by L'Oreal, will lead the charge.
Digital is poised to dominate travel retail, says L'Oréal. Next year, the French giant will create a digital catalogue of 2400 beauty, skincare and fragrance products across seven of its major brands in nine languages for retailers to spruik its goods.
Many travellers just wander in and out of travel retail sections to while away time before departures. L'Oréal plans to stop travellers in their tracks by introducing a retailtainment master plan in key airports around the world. There's nothing new about this approach; the term was coined in 1999. But there has been a fresh take on the concept over the past couple of years from Walmart to chic department stores to get people in that all important mood to buy.
QVC's Beauty iQ a world first multi-platform beauty shopping experience
TV shopping still moves a lot of product, but it isn't the bonanza it was when the channel propelled brands such as Smashbox, Bare Escentuals and IT Cosmetics to super-stardom. Beauty sales in the US have been under pressure for some time as consumer attention spans have shortened. Most of us no longer have the patience to watch a five minute video, let alone a 15 minute segment or entire program.
The three companies that dominate TV shopping in the US - QVC, HSN and Evine - have been broadening their influence beyond "the box" for some time through strategic campaigns on smartphones and reach-out events to build new touchpoints with beauty and fashion consumers. On October 31st, QVC launched the Beauty iQ network in the US, billed as the world's first multi-platform shopping expereince.
According to Mike George, President and CEO of QVC, the new venture will offer consumers, beauty experts and brands the combination of media, social media and retail as one. "We've listened to our customers, and we know beauty is intrinsic to their lives. So we're engaging with them on all the platforms they love and providing a new experience that caters to their passion for beauty".
Beauty iQ will feature more than 50 prestige and premium brands, including NYX Professional Makeup, IT Cosmetics, Tarte, Becca, Josie Maran and Peter Thomas Roth. Consumers will be able to access beauty programs 24/7 across multi-platforms from the Beauty iQ network - from Facebook and Instagram through beautyiq.com, qvc.com and a mobile app. The round-the-clock strategy is a flow-on from QVC's launch of the Tili beauty box service in July.
China on track to become world's largest beauty market
By the end of the year China will surpass the US as the world's largest single beauty market, reports Morgan Stanley. Chinese consumers now account for 40 per cent of annual global growth in cosmetics and personal care products, reveals the financial services multinational. Online makeup sales in China are also enjoying explosive growth, confirms JD Finance.
As China's economy matures and becomes less reliant on heavy industry, incomes are rising rapidly. Retail sales in China grew 10.7 per cent last year, as the Chinese services sector continues to increase by geometric progression. As in developed markets, consumption has become a major driver of GDP in China, reports Citigroup, contributing 71 per cent of China's overall GDP growth over the past year.
The Chinese continue to trade up whatever they want to buy - from imported beer to cosmetics - says Morgan Stanley. The future looks very rosy for imported premium brands such as Estee Lauder and Lancome as huge numbers of newly affluent consumers opt for prestige skincare and cosmetics over their mass counterparts.
Changing demographics in New Zealand a growth opportunity for beauty
Most international and local cosmetic brands cover the so-called ANZ market. But things have changed dramatically across the Tasman, says Nielsen, and future sales and marketing campaigns for cosmetics and skincare shouldn't rely on out-of-date perceptions.
As in Australia, the Kiwi population is ageing rapidly, says the researcher. Today, 38 per cent of New Zealanders are aged 50-plus, a percentage set to rise to 43 per cent by 2025. Forty six per cent of women in this age group prefer to use cosmetics and skincare products with strong scientific claims, says Nielsen. Brands which get it right should reap the rewards, advises the researcher, because older demographics have higher disposable incomes and are very active.
The face of New Zealand has changed dramatically, too. More than one in three people now identify as non-European, a statistic which will rise to one in two by 2025, notes Nielsen. Nearly half of Asian consumers in New Zealand (47 per cent) shop online for beauty products, in contrast to 31 per cent of other Kiwi residents.
In the first six months of the year, 15 per cent of women in New Zealand bought cosmetics online compared to 5 per cent last year. More than 322,000 consumers bought beauty products online in the past 12 months, says Nielsen. A huge 51 per cent of women research beauty purchases online before purchasing.
Snippets from the wires
- The launch of Eau de Parfum far exceeded expectations for Inter Parfums. The fragrance maker posted sales of US$157.6 million for Q3 - an increase of 13.4 per cent over the same period last year. enjoyed sales growth of 11 percent, mainly in men's fragrances, and Rochas, acquired from P&G in mid-2015, doubled its sales of the previous 12 months. Europe (up 12 per cent) and the US (up 19 per cent) were the standout regions.
- Chanel has an answer for perfume lovers looking for a really special gift. The French atelier is launching 15 numbered bottles of its latest release - No 5 L 'Eau - housed in a diamond-cut crystal botle. The ultra luxe release costs a shade over $AUD12,000 and comes in a white lambskin box. It's a big bottle - 900ml - and will be sold by reservation only.
- Cost-cutting and the mass sell-off of brands to Coty has halted the decline of P&G's revenues. The multinational reported sales of $US16.5 billion for the first quarter of the 2017 fiscal year. The reduced beauty and personal care division enjoyed organic sales growth of 3 pr cent over the period. Power brands such as Pantene and Head & Shoulders and SK-II were the star performers.
- L'Oréal's Active Cosmetics Division, comprising La Roche-Posay, Vichy, SkinCeuticals and Roger & Gallet, is the French multinational's fastest-growing sector - up 8 per cent last year. According to analyst Trefis, the strong growth rests on solid relationships with healthcare professionals and offereing training to pharmacies and retailers worldwide.
