Kline News

Parsippany, NJ, February 1, 2012 - Interview with Donna Barson, Senior Associate, Consumer Products

The cosmetics and toiletries marketing environment is rapidly transforming, spurred by technological advances and the adoption of new media and marketing methods. Sales through alternate purchase channels have enjoyed a remarkable growth in the past year, with beauty sales via the Internet increasing at a compound annual growth rate (CAGR) of 26% between 2005 and 2010, according to Kline’s recent research on beauty retailing in the United States. Moreover the 2011 holiday season burst with new promotions where consumers looking for the best deals turned to online platforms.

The Internet, and the possibilities afforded by smartphone/tablet capabilities, continues to challenge traditional marketing media. Informed and savvy consumers now expect a dialogue with the brands and products they purchase. They also help to market various beauty products as they post to social platforms, blogs, or tweet about special offers, promotions, and new brands. This interactivity between the consumer and the marketer renders the market more complex, but also highly adaptable.

Mindful of these developments, Kline saw that the market was missing a crucial all-in-one source of information regarding the relevancy and usage of marketing methods and strategies among brands. From this, Kline developed the industry-sought research report Beauty Marketing 2011: U.S. Promotional Activities and Strategies Assessment. Donna Barson, Kline & Company’s Senior Associate overseeing the project, was asked a few questions.

• Among new findings in this report, what was the most striking fact about the marketing mixes personal care companies use?

Most brands are experimenting with a wide range of different marketing options, but they are not foregoing their tried and true methods. Rather, they are supplementing what they have been doing with newer technologies, such as social media. This is only the beginning of the explosion as most companies are not using these newer digital marketing communication means to their full potential. Companies experimenting the most are more apt to have social media rated as a very important component of the overall marketing mix, according to the findings of this report. Research shows amazing feedback to the use of social media; for example, Procter & Gamble’s Cover Girl reach on Facebook is over a million and a half as the brand supports its Facebook pages with fun activities, such as a recent give away of 1,500 Lash Blast 24 Hour Mascaras to their fans or a chance to win tickets to the 54th GRAMMY Awards and the GRAMMY Award's official after party.

• What is the best way to describe the current changes in beauty marketing, and what is the biggest impetus for the change?

With the rise of new technologies and services, from email to social media, the way consumers interact with brands and companies is changing. Consumers are doing more homework before making a buying decision. Aside from reading product reviews and other customers’ recommendations, they search for product attributes, scan magazine ads, review coupon offers, and examine YouTube videos. It used to be that marketers controlled their brand messages according to a carefully cultivated and comparatively rigid marketing plan. But with the advent of social media and ever greater real-time communicative connectivity, this inflexibility is turned topsy-turvy as marketers no longer have as much control over their messages. Consumers now have the ability to submit reviews and brand experiences, which other consumers can read before deciding whether to do business with you. Competition also reads these reviews, which helps them quickly develop new marketing messages to poach disgruntled consumers. Social media and its interactivity is just one example of new marketing tools available. It complements traditional marketing efforts at a typically low cost. Rapidly adopted devices, such as smartphones and tablets, are the real game changers. With them, marketing messages can be received at any time and any place. And with ”buy now” buttons, both message acknowledgment and purchasing are 24/7 activities.

• How important are these newer marketing methods to a brand’s success compared to more traditional methods, such as broadcast and print advertising?

This truly is a good question as it wasn’t simple to identify the degree of importance of new methods for each analyzed brand in comparison with the conventional marketing. Initially, we had to develop a definition of how marketing methods can be qualified so the final results are usable and not complicated to apply. At the end, we devised a proprietary method of data analysis where we use a 5-point metric to assess the importance and applicability of defined marketing methods for a given brand. The main take-away point here is that while traditional marketing methods such as advertising and coupons are very important, many brands now view social media and new techniques as essential to supplement what they have been doing for years.

• What are the latest marketing trends directly related to the personal care industry?

Brands are thinking outside of the box and are coming up with novel, unusual, and often fun ways to engage the beauty customer. Some of the brightest examples include a virtual mirror –a tool used by major national brands such as L'Oréal Paris, Maybelline, Cover Girl, and Revlon where users can upload a photo and play with makeup to see what will work for them—or videogames, QR codes, computer tablets at point of purchase, and more. However, even traditional methods such as couponing or cause marketing/philanthropy incorporates some novel approaches. Cover Girl’s built- in website alert provides an opportunity to easily get information on new products and discount opportunities. Philanthropy campaign “Beautiful Lengths” by Pantene in partnership with American Cancer Society is committed to support women afflicted with cancer by asking consumers to donate their hair. “The Greater Good” campaign by Burt’s Bees covers a wide range of fun activities to implement their sustainability goals or raise money to keep kids in school.

Some brands combine innovative digital campaigns around traditional marketing. For example, Procter & Gamble’s Gillette Fusion brand collaborated with Walmart, the National Football League (NFL), and the Madden NFL football video game from Electronic Arts, in a campaign that was able to combine three areas of interest to men: shaving, sports, and video games. Aside from traditional print and broadcast advertising, this campaign utilized ads within video games, Internet banner ads, paid search ads, in-store messaging, special in-store displays, sampling, and social media to create awareness to grow sales.

• How much do you think consumer behavior is influencing the way beauty marketing is now orientated? Is there a predominant social behavior beauty marketers should follow?

Consumer behavior and marketing are highly intertwined. Marketing goes to where the consumer is, and since the consumer uses mobile phones, tablets, and the Internet to help make purchasing decisions, that is where marketers are also going. Having a good website, along with good mobile and social marketing strategies are tactics and investments that all forward-thinking beauty marketers should implement. Also, with the rise of the new “digital customer,” marketers need to follow ongoing customer conversations about their brand.

• What are some pertinent examples of marketers and brands capitalizing on their innovative marketing methods?

Among more prominent and noteworthy new campaigns are Bare Escentuals’ “Be a Force of Beauty,” proclaiming that pretty attracts us, beauty changes us, or Olay’s Booyah's "MyTown" service where the location-based game's 2.5 million users check-in at pharmacies and other stores that sell skin products. These are among many that the report covers. Another exciting campaign that engaged beauty bloggers was launched during April 2011. MAC selected nine bloggers to create a new limited-edition collection for the brand and named it MAC Cosmetics Bloggers Obsessions.

The take-away point here is that, like it or not, to remain competitive it is vital to be conversant with the vast and surprisingly cost-effective marketing possibilities that new technology and services afford. Traditional marketing channels certainly remain necessary and viable, but their influence is waning as consumers are now actively involved with marketing messages. Marketing—more than ever –is a dialogue; are you listening?