20

JANUARY 2016, No. 1 AGENDA on investment market. inthebeauty Marketers to arisk worth taking imp thinkitis shop.” ¶ vice president ofnewsolutionsforIRI.“Too many productsmakes itdifficultto are somany babies executive yelling, Levin, ‘Buyme,buy me,’”noted Larry alwaysrife inmasschains.“Itis when you anissue walkinto abox andthere blockbuster launches. ¶Theproblem proliferation ofnewproduct especially is asolidcoresupport business,andenliven itwithanedited-down of assortment up profits as much astheydosales.Thenewway to ofthinkingis buildand A

WWD.COM

But doestightening turnoffcustomers? thepipelineofintroductions

The Core Back to to emphasizethe core, particularly withits Olay stillimprovefield, which can substantially.” ourbrandsand howsupport we execute inthe our brands,butit’snot supporting more how we and proper in-store execution. It’s notlike we’re how we buildbrandsthrough communication much butitis more afocuson important, line is brands, andthatgoes beyond justpipeline. Pipe- interms oftruly building focus withinCoty recently toldWWD, we aharder “What needis 30. endedSept. quarter wherebusiness, salesfelloff14 percent inthefirst focus onthecore, particularly withinitsfragrance vation syndrome.” new items,saying it’s with“hyper-inno- afflicted torolling outasuccessionof addicted is industry to thefirm’s profitability. InDelpani’s view, the are atleastthree tofouryears oldandcontribute Delpani, who definesthecore asproductsthat president andchiefexecutive officerLorenzo core andoveremphasizing new,” saidRevlon Inc.’s new product conceptsinabidtonew product ensure thattheypump fewer, bigger, better when strategy itcomesto introducing motto was“more, more, more,” now brandsare adoptinga with growing thetop line.Where oncethe industry’s gettingis asecondlookfrom executives top-tier tasked of newness,onceconsidered thelifebloodofindustry, churnthe constant ofproductlaunches. ¶ pumpingthebrakesbold guard brandsis ofbeauty on Procter & Gamble Co. is makingaboldmove &GambleCo.Procter is chairman andinterimceoofCoty, Becht, Bart Revlon alsoincreasingits Inc.is isn’t alone.Coty wasunderemphasizing whole industry “The By By pr improve to manufacturers areBeauty rethinking newness MOLLY PRIOR and FAYE BROOKMAN ofit andcustomer loyalty. rove inventory inventory rove Revlon Inc. Lorenzo Delpani innovations.” fewer, better to make determined months . . .am . I make itpast12 products don’t “Many new turns andreturn

The onslaught , moisturizers. Keithmoisturizers. saidOlay sublines,suchas backonOlay’sthe emphasis heritage offacial to highlightthefastest turningonesandput discontinued 16percent ofitsrange. a range of15 to30percent. IntheU.S., Olay has toreduce aneffort the offeringbyfall, includes period. skin care hasgained45 percent duringthesame by about3percent since2009, while prestige havecases forotherretail channels. defected overstuffed shelves difficulttoshop, andinsome “suburban sprawl,” Shoppers find it. asshe calls many newitemsare theroot ofovercrowding, or launches has donelittletoliftsales.Instead, offering. up theshelves. confusion, butthecompany working is toclean robust pipeline—hascontributedtothe product ing away because theyliterally gave up,” hesaid. tomakeers trying senseofashelf andthenwalk- purchases. WhenI’minstores, I’llwatchconsum- inhibiting withthatcomplex is ciated assortment times. Theamountofconsumerconfusionasso- Ithasn’t America. grownchannels inNorth two salesgrowthsame-store across mostoftheretail five years. “And you allknow what’s happened to byassortment asmuch timesinthelast astwo number ofretail chainshave theirstore increased ber, P&G’s officerJon chieffinancial Moeller saida andRetailGlobal Consumer Conference inNovem- the in-store environment. tohelpretailers burnish withefforts fied inconcert with gimmicks.TheOlay willbesimpli- assortment the latesttrend chestlittered andhasamedicine ratherthanonewho jumpson antiaging product, Olay’s consumer, ashopper who wantsareliable multipronged approach includingalaserfocuson Summitinearly May.Beauty There, she outlineda attheWWD forP&G,sonal care theissue raised years. togrowbrand, which hasstruggled salesinrecent The idea is to trim theunderperformingitems totrim The ideais forOlay,Her strategy earlier which this began Keith notedthattheU.S. massmarket hasgrown In herview, theindustry’s successionof Keith leadingOlay’s is its tosimplify efforts He acknowledged thatP&G —which hasa During apresentation at the Morgan Stanley Alex Keith, president ofglobalskin andper- Photographs by by THE VOORHES ►

Delpani photograph by Danny Kim WWD.COM

JANUARY 2016, No. 1

21 AGENDA

Esteemed “This year [in 2014, Judges the latest data available], The Smell Test: we saw significant declines in the number Diptyque Florabellio AGENDA of new products in the Michael Edwards While one judge seemed to appreciate the complex nature of the scent Author of “Fragrances of the World” and “Perfume Legends.” 4.4 beauty space.” Avg Score and another enjoyed “the fun ride,” others on the panel couldn’t cope out of 10 Larry Levin, IRI with what they saw as a jarring combination. By PETE BORN

Jean-Claude Delville Senior perfumer at Drom. “Clever, complex, compact, oddly “Fizzy lemonade-like opening, bright items in the portfolio, but said companies must inscrutable fresh-metallic- accord with a curious crunchy deliver what they promise. “How do you focus green note, soft finish. The ending accord. Very nice work.” on improving the base business as the market milky could have been more exciting, but high Score: 7 continues to innovate around you?” she asked. marks for the fun ride.” “You have to identify what is your differentiator Score: 7 in the marketplace.” Victoria Frolova Numbers evaluated by IRI support the impres- Fragrance industry analyst and Bois de Jasmin editor. “The fragrance is a chameleon sion that brands are reducing launches. “This year on me — every time I wear it I [in 2014, the latest data available], we saw signif- smell something completely icant declines in the number of new products in different. An elusive and “This is a very unusual and quite the beauty space,” confirmed IRI’s Levin. puzzling fragrance that strange perfume. I get some notes Compounding the issue, the launches in beauty leaves me unsatisfied.” that smell as if the perfume has Score: 3 turned bad.” are encountering difficulty achieving a measure Nathalie Pichard Score: 3 IRI uses called Pacesetter. To judge the pacesetter Owner of training and evaluation status, IRI tracks a new product when it hits 30 agency Topnotes. percent distribution and tracks sales for 13 quad — or four-week — periods. For beauty products, IRI’s analysis found 32 scored in the top 100 in 2014, combining for $700 million in sales, or about an average of $22 million each. But, Levin noted that Luca Turin the year before, in 2013, there were 44 beauty Biophysicist and perfume “Memorable, pacesetters producing $1.3 billion in sales. “That’s critic for arabia.style.com. almost a 50 percent erosion in terms of dollars spicy top note. for new product launches that are pacesetters,” Fades quickly.” he said. Score: 5 “A lot of companies are really paying attention to what they invest in as far as innovations to make sure they have it right,” he said. Paul Austin Ceo of sensory storytelling Many products fail, he added, because they agency Austin Advisory Group. don’t avoid the “sins of innovation.” One such sin is forecasting the wrong distribution and not supporting items in the second year. “Will you still love me tomorrow,” he said, noting some consum- Regenerist, got offtrack by launching a product to months….I am determined to make fewer, better ers don’t get around to trying a new item until its respond to every trend, which ultimately “watered innovations” which, over time, will likely become second year on the shelves. “If you forecast wrong Karen Dubin Founder and ceo down” the brand. part of the company’s core lineup. He noted that or don’t support beyond the launch, new items of Sniffapalooza. “Unattractive and Keith said Olay generates about 20 percent of Revlon launched fewer products in 2015, but become an albatross.” its sales across 11 hero stockkeeping units, such that moving to a less-is-more strategy requires a Advertising support for the second year of a new overwhelming floral combination. as Total Effects [Seven-in-One Anti-Aging Moistur- “cultural shift.” item is crucial. “You have to support the baby in Score: 3.5 izer] pump and Regenerist [Advanced Anti-Aging Several executives said while retailers are on year two. So many products die in the second year Micro-Sculpting Cream Moisturizer] red jar. Even board with the call to clean up the shelves and because they are not supported.” after seven years in the market, Regenerist red counters, at each meeting they can’t help but ask, Thirty percent of trial is in the second year, he Christophe Laudamiel jar is 10 times more productive than the entire “So, what’s new?” Old habits die hard, and as Nails said. “It is important to market and advertise in Master perfumer at DreamAir. bottom one-third of sku’s in the category, accord- Inc. founder and managing director Thea Green year two because demand might not come until “A sharp, harsh, green ing to P&G. pointed out, new products bring new customers then, maybe in year one it wasn’t on a shoppers’ metallic garlic scent Olay will use the space created by the cuts to to a brand and that’s the main draw for retailers. radar.” in a chemical floral “The whole impression showcase benefit claims, regimens and highlight But she also noted it’s the core products, or the Despite the growing shift in strategy in the structure which is chemical, full of too hero items with double- and triple-facings on the basics, that drive customer loyalty. industry about the endless stream of new prod- is unfortunately… many ingredients, which Green also put the spotlight on supporting ucts, Levin said the beauty category depends on shelf, Keith said. Chantal Roos powerful. Who can makes it confusing.” In the U.S. stores where Olay has fully imple- existing products, saying, “Core can change and a continual flow of freshness. “Typically 3 to 4 Cocreator of “An understated Roos & Roos Co. wear that?” Score: 2 mented the plan, the brand is seeing a 5 percent- be developed, and so it should.” percent of a company’s sales are jump-started by Score: 2.5 green bouquet that age point improvement in dollar sales, compared Unilever also focused on the importance of the innovation. In beauty, it is 12 percent,” Levin said. with regular stores, Keith said. core at the WWD summit. Using hair care as an So while brands might need to become more sings softly, very “It’s a bold step,” she said. “It’s in everyone’s example, Kees Kruythoff, president of Unilever judicious in launching new products, they focus soft on the skin.” best interest to get mass skin care growing again. North America, noted there are 18,000 products completely on the core to their peril. “Declines Score: 6.6 In the end, we are all responsible that the category in the category, but only 8 percent of sales in 2014 in innovation will be bad for the category. Beauty Kevin Verspoor is not showing better growth overall.” were from new innovations. “The real growth thrives on new. You need fun and a social buzz,” Founder of Revlon’s Delpani has also committed to fewer, comes when we are driving the core — and rein- Levin said, citing a launch like Sally Hansen’s PerfumeKev LLC. better introductions. venting what was already there — especially when Miracle Gel as one of the most successful beauty Referring to the rapid-fire pace of launches, that’s coupled with a purpose,” the executive said. launches of all time. Industry estimates put the THIS IS A BLIND TEST: Panelists are given vials of an unidentified scent to judge impartially. Each of them gives a score ranging from 1 (forgettable) to 10 (unforgettable) and the numbers are computed he said, “This situation is extreme in the beauty A retailer with one of the U.S.’ largest mass-mar- sales volume of Miracle Gel at more than $100 mil- into a final grade. The judges, led by chairman Michael Edwards, also make critiques, which are unattributed to encourage candor. The most promising scents are picked for judging in an effort to find

industry. Many new products don’t make it past 12 ket chains welcomes the emphasis on existing lion in retail sales for its first full year on market. ■ Copeland Kate by Illustrations and showcase excellence. WWD buys the products at retail, like any other consumer. How would you rate the fragrance? Visit WWD.com/beauty-industry-news to vote.

22 JANUARY 2016, No. 1 WWD.COM Photograph by GEORGE CHINSEE Styling by RACHEL STICKLEY WWD.COM JANUARY 2016, No. 1 23