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SPECIAL PRINT EDITION BW Confidential Beauty Insight SPECIAL PRINT EDITION The leading publication on the international beauty industry #195 BEAUTY Subscribe INSIGHT Comment Future forward Inside 6 Retail insights Travel retail 8 Tech bytes Netwatch ew online selling platforms are attracting major groups’ attention. Over the past 12 Trending Nfew months, German retail group Douglas has taken a stake in Niche Beauty, an Companies to watch e-commerce site specializing in luxury cosmetics, while Henkel has invested in Purish, an e-commerce site targeting generation Y and Z, and youtiful, a social-selling platform, 13 Data where the community decides through online voting which products will be added to Around the world the portfolio, recommended and distributed. These are all efforts to cultivate direct-to- consumer businesses, gain more data and deeper insights into how consumers shop. More 14 Interview acquisitions or investments of this type are likely—especially when it comes to online retail Shiseido Travel Retail models focused on a specific category (clean beauty, CBD beauty), based on a precise president & ceo mission or purpose (an environmental issue, for example), and those offering unique Philippe Lesné services or with a strong community approach. Distribution shifts continue. BW Confidential has been covering key shifts in the industry for 10 years. Indeed, this 18 Zoom in on month BW Confidential celebrates its 10th anniversary. To mark the occasion, we have M&A launched a new publication: The Beauty World Guide, a comprehensive guide covering consumer, retail and tech trends in almost 30 major beauty markets worldwide.We have 22 In case you missed it also published a special report on how the industry will look in the next 10 years in our October-December print magazine. And to fete this milestone, we will hold The Beauty Party at the TFWA World Exhibition in Cannes, which we hope will be a convivial occasion to meet up with old industry friends. I would like to take the opportunity of our 10th anniversary to thank all our partners for their support over the years, our readers and the BW Confidential team both at our Paris base and around the world, who work tirelessly to bring you all news, comment and analysis of the market. Here’s to the next 10. Oonagh Phillips Editor in Chief [email protected] Follow us on: www.bwconfidential.com - Beauty Insight - September 24-October 21, 2019 #195 1 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL C M Y CM MY CY CMY K C M Y CM MY CY CMY K Retail insights • Chinese tech and retail group Alibaba opened its first European brick- and-mortar store in Madrid, as part of its strategy to go beyond Asian markets and compete with Amazon. The AliExpress store at the intu Xanadú shopping center is designed like a showroom, encouraging customers to test and browse products before purchasing them online. It features more than 1,000 products from some 60 brands. • Korean beauty start-up Villa de Mûrir opened a concept store in Seoul, South Korea whose design offers differentiated, interactive beauty experiences aimed at millennials. Retailing a curated selection of products from a range of beauty brands as well as Villa de Mûrir’s own products, the concept store’s dominant color is bubble-gum pink. In addition to an upstairs beauty treatment zone, product browsing area and café, the store boasts a dedicated production studio designed for selfies and YouTube beauty content creators. • Tech company Apple and British fashion brand Burberry have co-developed a chat app designed to foster more personalized, interactive shopping experiences, and which will allow in-store associates to send customers private messages. Now in a pilot phase, the R Message app is currently available to select customers by invitation. Launching initially at Burberry’s flagship store in Manchester, UK, it will later roll out worldwide. Travel retail NPD Travel Retail on the positive influence of travel-retail exclusives on beauty The chart (right) highlights the The influence of TREX on your purchase decision: importance of travel-retail exclusives “I would be more likely to purchase” (Beauty Category Visitors) (TREX)—and their influence on driving high rates of conversion—and how, for certain nationalities, it is a key consideration when they enter the beauty category. The global average has risen from 68% in wave 1 (October 2018) for beauty category visitors who would be more likely to purchase if TREX were Source: NPD Travel Retail available, to 69.1% in wave 4 (July 2019). Indian visitors to the beauty category are the most enamored of the prospect of a travel- retail exclusive. In fact, 88% of Indian beauty visitors in wave 4 (July 2019) say TREX would positively influence their category interaction and encourage purchase. When we look at the top-three reasons why nationalities are positively influenced by TREX, we see a consistency of “the TREX price offers good value for money”, “owning products that are not available elsewhere” and “guaranteed authenticity of the product”. The NPD Travel Retail ‘Nationality Tracker’ is a trackable shopper insight product in duty free to understand the behaviors of 25 leading nationalities. Since August 2019, the product has 90,000 respondents across four waves (22,500 collected quarterly). NPD Travel Retail will be exhibiting at the Innovation Lab at the TFWA World Exhibition in Cannes. 6 www.bwconfidential.com - Beauty Insight - September 24-October 21, 2019 #195 ermannoscervino.com | [email protected] TFWA CANNES RED VILLAGE M30 THE NEW FRAGRANCE FOR WOMAN Tech bytes • US-based tech company Seek is partnering with retailers including Overstock and Walmart to bring augmented-reality (AR) features to e-commerce sites, without requiring consumers to download a dedicated app. Customers can use the AR shopping tool to view 3D-renderings of products on their mobile phones before making a purchase. • China-based microblogging platform Weibo has started public testing for a visual- based social concept that is meant to rival Instagram and local competitor Xiaohongshu. Called Luzhou in Chinese (Oasis), it combines social-media functionalities with those of a web forum. The platform allows users to upload content and connect with those who share similar interests. • Electronics manufacturer Philips is partnering with Chinese company JD.com to improve Artificial Intelligence (AI) features in retail settings. One aim is to use natural language processing to better understand pre- and post-shopping behavior. JD.com claims its AI and machine-learning system can parse the nuances of that behavior, offering insight into improving customer experiences and optimizing product strategy. It draws on customer reviews and feedback, interactions with product pages and ads. • Brazilian retailer Lojas Americanas has launched checkout-free automated convenience stores that rely on QR-enabled entry and exits. Customers download an app to generate a QR code for store access, scan-free purchases and automatic receipts. Stores boast smart shelf sensors and overhead cameras for security. Netwatch San Francisco-based Tribe Dynamics shares exclusive data about beauty trends and brands making waves on social media Tatti Lashes boasts 100% month-over-month growth in community size While it did not rank among July’s Top 10 brands for the UK, Tatti Lashes’ $3.9m earned media value (EMV) represented a significant 35% month-over-month growth. Even more impressive, the brand doubled its community size month-over-month, scoring shout-outs from 100 unique ambassadors. Tatti Lashes’ highest earner was content aggregator Peaches & Cream (@peachesog on Facebook), which drove $597.0k EMV across eight high-impact giveaway posts. The brand also benefited from high-profile influencers, such as Jamie Grant (@jamiegenevieve), who generated $127.7k EMV via a post and video tutorial of her bridal make-up look. Tribe Dynamics is a San Francisco-based software company that helps beauty, fashion and lifestyle brands drive and measure digital earned media at scale. For more stories and rankings of top brands and products in international beauty, check out Tribe Dynamics’ July Tribe Top 10 report for the UK here. 8 www.bwconfidential.com - Beauty Insight - September 24-October 21, 2019 #195 To celebrate its 10th anniversary BW Confidential the leading publication on the international beauty industry will host THE BEAUTY PARTY During the Tax Free World Exhibition Cannes MONDAY SEPTEMBER 30 - 6.30pm Hotel Majestic Cannes by invitation only • 10 years of news • 10 years of analysis • 10 years of beauty expertise For more information please contact: [email protected] in partnership with CARE-INFUSED COLOR DEPOSITING MASKS Seven curated shades designed to refresh, enhance or play with your color…without commitment. MOROCCANOIL.COM CARE-INFUSED COLOR DEPOSITING MASKS Seven curated shades designed to refresh, enhance or play with your color…without commitment. MOROCCANOIL.COM Trending The pro-age beauty movement is #Glassskin has made a come-back maturing as more companies meet on social media. While the K-Beauty consumer demand for products inspired make-up look—a smoother, that celebrate aging. Rather than more reflective version of dewy skin— promoting “youthfulness”, brands has been on influencers’ radars since at such as Look Fabulous Forever and least 2017, new products are bringing Pause Well-Aging are designed it back to the fore. Beauty brand Tarte to complement aging skin or hair. recently launched a skin gloss glass Nearly 15,000 Instagram posts now highlighter that can be applied directly carry the hashtag #proage, with with the fingers. wellness and health an increasing focus. Witch hazel is showing up as a key ingredient in many natural-based beauty brands, said to offer pore- cleansing, moisturizing and toning benefits. Both mass and prestige brands are placing the folk-remedy ingredient front and center in toners, concealers and other products.