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Being Ready to Break Into New Markets

By: Kathy Connolly
Posted: April 28, 2014, from the May 2014 issue of GCI Magazine.

As a London-based consultant to the global beauty industry, I meet with many new businesses from Eastern Europe, Russia, China and India, among others, all hoping to gain access to the dynamic retail arena in the U.S. and Canada. For these brands, North America is the pinnacle in terms of being positioned in a key marketplace, as they can showcase their products to the world in what is considered to be the top level of retail distribution worldwide. The ultimate goal is to place products on the store shelves of retail chains in these markets.

In order to achieve this goal, careful planning of the actual execution of the product launch is critical. However, this key step is often forgotten or ignored because the focus in the beginning of a beauty brand launch is on product development, brand image, packaging, ingredients and efficacy of the product. The actual product launch, including the all-important backup support, is often not well planned, and this can impair the chances of success for the lucky few who do get accepted by North American retailers. There are lessons for all beauty brand here—especially those looking to expand.

Further, for many entering into the North American retail arena, much thought is given to the front end of the businesses, with the technicalities and support details of getting to market often overlooked. While the logistics can be less fun or creative, it is a crucial and necessary part of the journey of a brand in its acceptance into the highly competitive beauty industry. All too often when I meet with companies who feel ready to launch, I see beautiful products, great packaging and lots of thought in the details of the unique selling points, but there’s an absence of any clear plan for how to bring the brand to market.

In today’s competitive retail world—be it in high-end specialty stores such as Barneys, Bergdorf Goodman, Saks or Neiman Marcus or large chain drug and pharmacy retailers such as CVS, Walgreens and Rite Aid, or Walmart and Target—it has become even more important for brand owners to do their homework up front. That way, if or when the day comes when they find themselves sitting in front of a category manager or buyer, all the background work and final checks have been done and the majority of the administration work has been put to bed, making the decision for these increasingly work-overloaded retailers as simple as it possibly can be. Today’s buyer does not have time to do the work for you—making this as easy as possible for them is already going to give you a head start on your competition.

Product Planning

Some of the most common mistakes seen with newly emerging brands are often the simplest to resolve. A little extra upfront planning and effort can be the deciding factor for a buyer picking your product over another.

The number of items in a brand line is the biggest and most frequent error I see. All too often—particularly in brands coming from Europe, where the retail market is still mostly that of mass chain pharmacy distribution or the independent beauty boutique retail environment—the brand lineup has hundreds of products all falling under the same corporate name and ranging from hair care, body care and bath and shower to foot care, facial creams, balms and serums—and even fragrances and deodorants. This common error needs to be addressed even before beginning work on where the various product lines will fit.

Each retail buyer has different category responsibilities, and you need to break your brand down into key categories in order to appeal to a particular buyer responsible for a particular area of the market.

Starting out, less is best. Begin with your hero products or the category that your brand performs best in. For example, if hair care has been your strong point, focus on that, making it the best it can be. Highlight the products with a unique story to tell. Think about how many beauty brands, products and ranges this buyer has already had presented to her, and try to put yourself in her shoes. Look for the magic in your products, find that one product that will grab the attention of the buyer and run with it.

Also, don’t try to be all things to all people. New brands often only see the potential financial rewards that could be theirs without stopping to think of how many other brands and products there already are like them—all vying to gain a foothold in the retail space. You will usually have just one opportunity. Take a step back and analyze, analyze and analyze again. Then tighten your product range, putting forward only the best of the best.

Next, break down your categories. You can always make more than one appointment—or better yet, streamline your offerings to make your selection only those products you feel strongly about.

Support System

The North American way of doing business, from a support point of view, often comes as a great surprise to companies attempting to launch in North America. Often, brands have done insufficient research when building their business plans. Gone are the days when buyers chose products based on packaging, name, design and the good looks of a new brand alone. In today’s world, where the market is owned by a few giants, there is very little space left for newly emerging product lines. It requires a great deal of careful analyzing and decision making from the buyer or category manager to seek out the best of the best and find the next winning product or brand.

And smaller brand owners need to be prepared to meet the challenges they will face with the huge corporate giants that dominate this space and also provide the spend to drive their businesses at retail. Though smaller emerging companies may not have the deep pockets of some of the corporate market leaders, brands of all sizes are expected to able to come to the party with a well-thought out marketing plan to support the products, as well as budgets for PR, advertising and social media.