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Marketing Matters: Fuel Costs Affect Beauty Buys

By: Liz Grubow
Posted: October 9, 2008, from the October 2008 issue of GCI Magazine.

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Will consumers continue to purchase beauty products on the Internet, at mass retail markets or supercenters over department stores? Some sites, like Beauty.com, have instituted some of the same policies as the department store cosmetic counters. The site offers a 100% color guarantee on many makeup products, allowing customers to return them for a full refund.

How are beauty services fairing in this downturn? A number of consumers are trading down from full-service salons to cosmetology schools or nail salons, particularly for manicures and pedicures. Other consumers are extending the time between services, while some are dropping them completely. Will facial cosmetic surgery procedures continue to be on a spending freeze once the economy improves? Some believe that consumers will continue to be judicious in the way they spend their discretionary income due to a declining standard of living over the next two decades.

Blogs are becoming more important to shoppers as a means to review products with others in their peer group versus just trusting the vendor claims. More than 27% of women have posted a comment about a beauty brand, and 67% of women who read these blogs are more likely to buy a beauty product if they read a good comment or review from a fellow consumer.

Economic factors, the presidential election and blogs are creating unprecedented changes in beauty care shopping habits. In this environment, prestige beauty care manufacturers that will flourish are those that can increase the innovation gap between their brands and their mass competitors. A loyalty program targeted to frequent shoppers is one opportunity for brands to explore; linking a brand to consumers’ current interests in environmental responsibility is another strategy. The winners will be manufacturers who are able to refocus their efforts to strike the right balance between brand promise, pricing and marketing to respond to the shifts in consumer buying habits during this difficult downturn.

Liz Grubow is vice president and group creative director of the LPK Beauty Group.In her 20-plus year career, Grubow has helped develop and manage brand identity programs for some of the world’s most successful beauty brands—including Pantene, Olay, MAX Factor International and Cover Girl. She has been recognized internationally by the prestigious London International Advertising Awards for Design and has been bestowed with the Procter & Gamble CEO Design Award.