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Joining the Innovation Game: The Changed Nature of Private Label

By: Sara Mason
Posted: May 4, 2011, from the May 2011 issue of GCI Magazine.

page 3 of 6

For retailers to be successful in private label beauty sales, they have to keep true to their retail brand and mimic the image consumers are already familiar with and trust, even if it’s outside the box.

The goal in developing Payless’ beauty line was to give customers access to fashionable and high-quality fragrance and beauty products in line with the retailer’s price point of difference already established for shoes and accessories. For its beauty products, that price point of difference is as low as $2.99 an item, with nearly 90% of the line available for less than $10 an item. “We always considered beauty as fashion and knew that the market was in demand for fashionable and affordable products,” explained Mager. “We decided to focus on cosmetics and wanted to try fine fragrance at a very affordable price.”

And fragrances happen to be the most successful products so far, exceeding both Maesa and Payless’ expectations. In response, a new fragrance brand called SXY (pronounced “sexy”) was introduced in April 2011, in addition to color refreshes to the beauty collection, which will be available through 3,000 doors in June 2011. And Payless plans to foster evolution of the brand.

“When it comes to cosmetics and beauty, consumers always want to feel innovation and effectiveness,” said Sophie Thiolas, director of communication, Maesa. “We always need to bring on the table something new, whether it’s the packaging, design, the formula or the story.” This is especially true when thinking outside the box, such as a retailer like Payless, because there is not momentum to build from as there is with a national cosmetic brand.

Maesa has an innovation “cell” within its innovation department to design product lines upstream. “Its purpose is to have a very, very wide view concerning innovation,” continued Thiolas. “We analyze several industries—including health, well-being, food products and fashion—for specific actions, from raw materials and suppliers to techniques and concepts, to develop novelty in the product lines we create for our clients.”

A New Kind of Innovation