People often wonder what is the future of beauty retail with the advent of online and pharmacies. Yesterday I happened to find myself in front on the Kiehl’s flagship store in the East Village (NY) on my way to an art supply store. I needed a gift for a friend and found the gorgeous Jeff Koons limited edition of the Creme de Corps. Beautiful & colorful tulip design plus all proceeds going to the Koons Family Institute (Koon’s son was abducted by his ex-wife which inspired him to fight for children’s rights). The staff was beyond kind and extremely helpful. She asked me what samples would my friend like, put the Creme de Corps in a beautiful box filled with dry flowers and surrounded by deluxe samples (I even got extra samples of the new Rosa Artica and Double Strength Deep Wrinkle Filler, the latter being my new best friend). 

So on the future of retail? Old fashioned experience & value: friendly staff, free product trial and (above all) pamper me. I will schlep there because they made me feel like a million dollars for less than $50.

Photo via vanityfair.com

"I was asked to make the Ferrari of vending machines" – Russel Greenberg, Designer

Insight by Andrea

Vending machines have been a popular retail outlet in the United States and in Japan they can even speak (there is an estimated 1 machine for every 23 people in Japan). Recently there has been some in-roads by beauty companies in the space of automated retail. Proactiv Skin Care was spotted last year at Dallas Forth Worth Airport.

But now the Ferrari of vending machines is here. U*tique was created by Mara Siegel and designed by Russel Greenberg. The first automated outlet of this kind is currently operating at Fred Segal in Santa Monica and plans to expand to gyms, airports, hotels, night clubs – places where people could use a high-end beauty fix.  Brands currently available include Malin + Goetz, Clark’s Botanicals and Smashbox Cosmetics. Among other things, there is actually a little robot inside that delivers delicate items to customer’s hands, avoiding them from tumbling down like a pack of Cheetos.

One draw back pointed out by a review is that U*tique is not really a good tool for browsing and comparing as prices aren’t displayed anywhere.

"I had asked why the prices aren’t displayed with the items, you know like in vending machines, and was told that if I had to ask how much something cost then I probably shouldn’t be buying something from that machine." – Caroline C., Los Angeles. Yelp, 4/25/09

This was the only actual review of U*tique available online. Most of the coverage seemed to be straight from the press-release. I would have expected many more reviews of the product online by this point. The concept is really innovative and will definitely change they way we shop for beauty. It may however, be best if includes a good selection of reasonably priced, high quality products, to ensure more people use it more often.

Read more:

W Magazine

shoppingblog.com

Racked.com

Yelp Review

Shared by Andrea

Interesting how the pharmacy market, once a place to buy your medicine and some traditional mass brands like L’Oreal Paris and Cover Girl, seems to be segmenting into "specialty mass" – not masstige. Pharmacies in France sell a wide range of beauty products with various price ranges. It feels like since L’Oreal introduced Vichy in the US, the market started to resemble more like the French model. Last year CVS launched Beauty 360, an upscale beauty boutique attached to their regular stores. Duane Reade just went through a rebranding and is looking a lot more modern (reminds me of Boots in the UK). However, there are some pharmacies that remained true to their more traditional and/or apothecary concepts that are now building strong beauty businesses according to WWD: Navarro, Pharmaca and London Drug (I would add Bigelow Chemists in NYC). As pharmacies offer a more personalized service and a better shopping environment they become a natural fit for retailing a wider range of beauty products. Why did the US market assumed for so long that pharmacies could only sell the most inexpensive mass products – if it has been a proven concept in many European markets?

Insight by Leah

A recent report indicated that the cosmetics industry in India alone grew 7.5% between 2006 and 2008, highlighting the increased importance of this emerging market.  Even with the economic slowdown that is affecting all global markets, the make-up industry is expected to maintain strong growth in the coming years.  Analysts point to both increased awareness of products through media outlets as well as a growing middle class in the country.  Further, experts believe that this market is still under-served, and will only continue to surge ahead.  Given L’Oreal’s recent signing of Indian actress Frieda Pinto as a global spokeswoman, there is no doubt that other companies will also attempt to reach this and other expanding markets in Asia.

Happi.com Excerpt:

The Indian cosmetic Industry has witnessed rapid growth in the last couple of years, growing at a CAGR of around 7.5% between 2006 and 2008, according to Research and Markets. With improving purchasing power and increasing fashion consciousness, the industry is expected to maintain the growth momentum (with marginal slowdown due to economic slowdown) during the forecast period (2009-2012). It is projected to grow at a CAGR of around 7% during the forecast period, according to Research and Markets. Both electronic as well as print media are playing an important role in spreading awareness about cosmetic products and developing fashion consciousness among the Indian consumers. With the introduction of satellite television and a number of television channels as well as the Internet, the Indian consumers are constantly being updated about new cosmetic products, translating into the desire to purchase them. Additionally, the flourishing Indian fashion/film industry is fuelling growth in the industry by making Indians to realize the importance of having good looks and appearances. Read the complete article on Happi.com.

Insight by Leah

A recent interview with Stila’s new CEO, Lynn Tilton, revealed some interesting plans to broaden the appeal of the brand.  Tilton mentioned that she plans to reduce the brand’s dependence on "middlemen" and reach out to consumers directly through channels including HSN, QVC, infomercials and online.  As well, Tilton revealed that she plans to launch a "a new mass line, called Simply Stila," and that this line will retail for $7.99.  These are big plans and big changes for Stila, which had previously enjoyed a unique cult following, particularly among make-up artists.  However, as with many brands in this economy, Stila had recently suffered poor sales and declining market share prior to the private equity bailout by Tilton’s firm, Patriarch.  Tilton is taking an interesting and increasingly popular approach by focusing on channels like HSN and QVC, and by combining TV spots and infomercials with online awareness.  This novel approach will allow Stila to become more accessible to customers that previously may not have bought Stila products either due to limited purchasing outlets and/or price points   As well, Tilton mentioned that Stila would be working with some well-known make-up artists to further build both professional and consumer appeal for the brand. There is definitely  an opportunity for Stila to leverage its cult following similar to how Harley Davidson did in the 1980’s, and expand to a larger consumer base. It will be interesting to see how Stila’s foray into mass retail and various sales channels play out.

Read the complete interview here on Butterfly Diary blog.

Insight by Leah

In an interesting development, a number of luxury brands (including Chanel, Hermes and Louis Vuitton) are opening pop-up stores across the U.S. and Europe. Hermes plans to open it’s first pop-up location this summer in East Hampton for four months. This new strategy, following the lead of mass retailer Target and it’s phenomenal success with pop-up stores, represents an attempt by these luxury brands to reach a new audience, create additional press opportunities and capture additional sales in a tough economy. Nathalie Franson, ceo at Azzaro, which operated a pop-up store on London’s Mount Street for four weeks last February and March, stated that pop-up stores are “a way of attaining new customers as well as reinforcing relationships with our current customers. It creates a direct link between the brand and its clientele.”  As luxury brands struggle to retain customers and even stabilize sales, pop-up stores represent a viable and cost-effective option.  Will we soon see this trend for beauty product lines as well?