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CEW Presents Retail Revolution—Connecting with Today's Consumers

By: Nancy Jeffries
Posted: November 2, 2012

CEW's October 2012 "Beauty Retail Evolution: Connecting With Today’s Consumers" event featured (from left) Chance Wales, director, category leader, U.S. health and beauty, Amazon.com; Shannon Curtin, divisional vice president and general merchandising manager, beauty and personal care, Walgreens; and Karen Grant, vice president and global beauty industry analyst, The NPD Group.

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Grant noted she is seeing a unit increase in fragrance, particularly in some categories, for example, niche brands. “Niche brands are also doing great business in skin care and makeup, as well as lip color, and there is continued momentum in mass. However, there are also huge opportunities for prestige.” She noted, “Customers want the best price possible, and the service element is also very important. We’re seeing the prestige shopper as a more engaged shopper, shopping across channels. She loves beauty. The beauty category also appeals to the economically depressed consumer, who will pursue the products she wants. There is a split between the love of beauty and the engagement with it that really drives the category.” She added that changing the conversation at the store to more fully engage with the consumer is key.

Creating Unique Experiences for the Consumer

Curtin said that Walgreens knows the young, confident woman and how she shops, and adds, “We want to provide that experience for her. We have brick-and-mortar as well as online platforms, and we watch how our consumer shops.” Wales added, “At Amazon, we want customers to discover, research and buy whatever kind of product they want. The convenience aspect of shopping at Amazon is key for beauty. We also see what customers do when they come to Amazon, looking outside the beauty channels that they visit.”

Wales also indicated that Amazon wants to hear from the different beauty brands to ultimately give customers what they want, which is more selection. “We custom build brand pages on our site with new products and have added celebrity spokespersons to that space. We’re also seeing people browse more, where in the past they’ve gone directly to the products they wanted,” he said.

Curtin, referring to the addition of Duane Reade to the Walgreens’ family, as well as Boots.com, Beauty.com, Drugstore.com, Walgreens.com and DiscoverBeautyWithin.com, said, “We’re going to take the best of each and leverage what everyone does well and bring it all into one box. We have a mission to become the best in beauty to make sure that the customer has the best experience when she comes to us.”

Curtin cited the recent successes of Coty and Revlon launches on Walgreens’ Times Square Jumbotron as a positive experience to draw customers into the store, and also cited the Look Boutiques as an opportunity to test new brands and new markets as stores continue to roll out in the future. Wales welcomed the idea of brands working with Amazon.com to build customized brand pages and cited Olay’s Facial Cleansing device as an example of utilizing Amazon’s targeting segments to drive awareness of a brand and leverage automated personalization technology to recommend an entire regimen for customers, in much the same way as book buyers at Amazon.com find themselves receiving suggestions for similar or related books and publications.

When asked what she saw as the coming blockbuster hit for holiday 2012, Grant didn’t single out a specific product to rival Justin Bieber’s fragrance success of 2011. However, she did mention some notable contenders. “Every category is growing. Artists’ brands, like Urban Decay and Nars, as well as natural skin care brands, including Origins, Kiehl’s and clinical brands, will be strong,” she said. Grant also predicted that fragrance will be a big winner at holiday, and said that the fourth quarter will be critical, with 50% of yearly fragrance sales occurring in that time period.

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