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Live From New York: Shopping for Necessity, Not Luxury
By: Nancy Jeffries
Posted: February 4, 2009, from the February 2009 issue of GCI Magazine.
Celebrating the launch of Coty's latest Nautica fragrance, Ocean. From left, Bernd Beetz, CEO, Coty; Karen Murray, president, Nautica; Andy Sharpless, CEO, Oceana; and Steve Mormoris, senior vice president, global marketing, Coty.
The Fragrance Foundation presented the State of the Industry 2008 panel at New York’s Metropolitan Club, moderated by Foundation president Rochelle Bloom. Covering both industry challenges and new opportunities, panelists Susan Babinsky, senior vice president, consumer products, Kline Group; Lynn Franco, director of the The Conference Board Consumer Research Center; Wendy Liebman, president, WSL Strategic Retail; and Robert Mettler, president, special projects, Macy’s West, provided input on emerging markets and retail approaches.
First, Babinsky presented data gathered from Kline Group’s bases around the world, noting that the global personal care business was most recently valued at $250 billion, with fragrance comprising 11%. She cited opportunities in the areas of emerging markets, in particular the BRIC nations—Brazil, Russia, India and China, as well as through the sustainability trend, which has taken hold in the industry. In addition, she discussed functional fragrances, noting the claimed antiaging benefits of Perricone MD’s Synergy brand and the nutri-benefits of Intelligent Nutrients from Horst Rechelbacher.
Liebman then addressed the ways in which America shops in crisis. “If you think like shoppers, you’ll connect with shoppers,” she said. Innovative offerings are important in the beauty business, according to Liebman, because more shoppers are shopping closer to home, choosing lower priced brands, waiting for sales and trading down to less expensive brands and less expensive stores. “There are new retail mixes,” she said, “and high and low value propositions are offering alternatives in a changing retail economy.”
Franco continued the panel’s discussion by referring to the decline of the consumer confidence index, relating it to the general health of the economy. “There’s a great sense of apprehension about making purchases,” she said. “There’s got to be great incentive to spend on something if it’s not a necessity.”
“We need to be more innovative to get our customers to visit us more often,” Mettler added. “We have to break through the clutter and noise to reach a diverse, new mix of customers by breaking out of our comfort zones and being agile enough to meet their needs.”