www.bwconfidential.com The inside view on the international beauty industry December 17, 2015 - January 6, 2016 #122

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The buzz 2 A year of market shifts News roundup he year 2015 has been a busy one in beauty, marked by a Netwatch 6 Tstring of events likely to have a lasting impact on the market. It was the year that was characterized by major acquisitions. Social media monitor These included what was described as beauty’s biggest deal of the decade: the announcement of Coty’s acquisition of 43 of Interview 7 P&G’s cosmetics and fragrance brands. Another big deal was Lise Watier ceo Pierre Plassard Swiss travel retailer Dufry’s purchase of World Duty Free, hot on the heels of its takeover of Nuance in 2014. Also significant Insight 9 was Unilever’s series of acquisitions in prestige skincare, which Trend outlook included Dermalogica, Kate Somerville Skincare, Ren and Murad. On the retail side, there was private-equity company CVC Capital Partners’ takeover of Store visit 12 German perfumery chain Douglas. Sephora Beauty TIP Workshop, It was also the year that saw beauty players take digital a lot more seriously. L’Oréal San Francisco, US teamed up with US-based General Assembly, a digital training specialist, for the creation of an online learning platform for its marketing employees, while Coty acquired digital marketing firm Beamly. In addition, LVMH appointed former apple executive Ian Rogers as its first chief digital officer. Also in 2015, indie brands continued to see strong growth (partly due to digital initiatives) and more brands—big and small—opened standalone stores. All of this came against a background of a tough economy in key developed markets, slowing growth in emerging countries, turbulence in travel retail and volatile exchange rates. In short, it was a year of much change, and one that illustrates how complex the market has become. We wish you a peaceful and prosperous New Year and we look forward to bringing you more news, commentary and analysis in 2016.

Oonagh Phillips Editor in Chief [email protected] BW Confidential’’s next electronic issue is out on January 7, 2016 News headlines daily on www.bwconfidential.com @BWCbeautynews News roundup At a glance...

n Troubled times at Avon

n Tengram Capital invests in Cos Bar The buzz n Catterton completes Steiner Leisure acquisition

n Unilever divests ethnic haircare brands

Stay informed with our daily news headlines on www.bwconfidential.com

Strategy

It has been a busy couple of weeks for Avon. Following news reports that the ailing firm is preparing to sell off its North American business as well as a minority stake in the parent company to Cerberus Capital Management, the company’s chairman received an open letter from a group of activist investors criticizing its recent strategy, management team and reported divestment plans. Avon issued a statement following the publication of the letter from Barington Capital. “We remain focused on taking strategic actions to drive sustainable, profitable growth, address changing and challenging industry dynamics, create opportunity for our representatives and enhance value for all Avon shareholders,” Avon said. “This includes the actions we have taken and continue to take to drive improved performance in the North American business.” In its letter, Barington Capital called for the company’s senior management to be replaced, criticizing current ceo Sheri McCoy as a “poor choice.” It also said it would oppose any sale of Avon’s North American activity, as well as the sale of an equity stake if terms were disadvantageous.

Chemical industry leaders DuPont and Dow Chemical have announced they are to combine in what they call a “merger of equals”, creating a joint company called DowDuPont. They then plan to spin the combined firm off into three independent, publicly traded companies specializing in agriculture, material science and specialty products respectively. DuPont’s Performance Materials business, which includes its Surlyn material used in beauty packaging, would become part of the new material science activity. The all-stock merger is expected to close in the second half of 2016, subject to regulatory approval, with the spin off scheduled to take place within two years of completion.

Tengram Capital Partners is expanding its presence in the beauty space. The private- equity firm has made an investment in US-based specialty store chain Cos Bar. The high- end retailer, which launched in 1976, has 14 stores in affluent locations offering skincare, make-up, fragrance, bath and body, haircare and men’s products as well as tools and accessories from luxury and niche beauty brands. The investment is expected to help Cos Bar grow its store footprint as well as expand its omnichannel and digital offer. Tengram’s other beauty investments include Laura Geller, Nest Fragrances, DevaCurl and This Works. n n n

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n n n US private-equity firm Catterton Partners has completed its acquisition of beauty and wellness firm Steiner Leisure. Affiliates of Catterton have now acquired all outstanding shares in Bahamas-based Steiner Leisure for approximately $925m, including assumption of debt. Steiner Leisure’s portfolio includes skincare brands Elemis and Bliss. The buzz Anglo-Dutch consumer-goods firm Unilever has sold off its Motions, Just for Me, Consort and Groom & Clean hair care and men’s grooming brands, as well as the TCB brand in Africa, to multicultural haircare specialist Strength of Nature for an undisclosed sum. The company said it remains committed to the ethnic haircare and men’s grooming categories, and believes the brands will be able to fulfil their potential under the new owner. “We will continue to focus on the specific needs of both multicultural and male consumers with our global brands,” said Unilever North America president Kees Kruythoff.

US-based flavor and fragrance company IFF has undergone a corporate rebrand, unveiling a new website, visual identity, purpose statement and tone of voice. IFF says that the new branding initiative, which is based on its 126-year history and “commitment to discovery and pioneering firsts,” specifically supports the commercial excellence pillar of its Vision 2020 business strategy. The new branding will flex to include recent acquisitions by IFF, the company said, the latest of which was cosmetics ingredients producer Lucas Meyer Cosmetics.

Germany-based Symrise has launched a mobile app for its fine fragrance genealogy tool, which it describes as a “family tree of fragrances.” The app enables users to access details of the most popular fragrances over the past 40 years. Fragrances are grouped into masculine and feminine categories and the nine fragrance families. Consumers can use the alphabetical index or direct search function to find a fragrance, and can add preferred scents to their favorites and share them via email.

BW Confidential US-based packaging firm WestRock has announced the acquisition of folded carton and 4 avenue de la Marne litho-laminated display packaging manufacturer Cenveo Packaging. 92600 Asnières sur Seine, France [email protected] Cenveo Packaging, currently owned by Cenveo Inc, has six facilities in North America Tel: +33 (0)1 74 63 49 61 Fax: +33 (0)1 53 01 09 79 and registered revenues of more than $190m over the past 12 months, WestRock said. www.bwconfidential.com The activity will be added to WestRock’s consumer packaging activity to broaden its ISSN: 2104-3302 Publisher: Nicolas Grob offer. The transaction is valued at $105m and is expected to close early in 2016, subject to Editorial Director: Oonagh Phillips [email protected] regulatory approval. Editorial Coordinator & Assistant: Katie Nichol [email protected] Contributors: Sophie Douez, Alex Wynne, Results Renata Ashcar, Mayu Saini, Raphaëlle Choël, Corinne Blanché, Naomi Marcoulet Subscriptions 1 year: electronic publication (20 issues) + US specialty beauty retailer Ulta saw a 22% rise in sales in the third quarter ended print magazine (4 issues) + daily news: €499 or US$699 October 31, to $910.7m. The sales increase was driven by double-digit traffic growth, [email protected] the company said. Comparable store sales rose 12.8%, driven by 10.6% growth in the Advertising [email protected] number of transactions and 2.2% growth in the average ticket size. BW Confidential is published by Noon Media 513 746 297 RCS Nanterre Ulta opened 45 new stores in the quarter, ending the period with 860 branches. Its Copyright © 2015. All rights reserved. e-commerce sales for the period rose 56.3% to $46.2m. Ulta is predicting a sales increase Reproduction in whole or in part without permission is strictly prohibited. of between 15% and 18% for the fourth quarter. n n n

www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 3 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL The buzz rechargeable travel spray and leather case selling for €265. rechargeable travelsprayandleathercasesellingfor€265. €165 for100mland€240200ml,withacoffretcomprising200mlfragrance,30ml comprises fivefragrancesandissettolaunchinspring2016.Thearepricedat or message.ThestorestocksAtelierCologne’sentireproductoffer. consumers canhavealeatherpouchfortravelsprayengravedwithname,initials blue storefrontandindustrialdécor.Thereisalsoanengravingworkshop,where Percassi ceoStefano Percassi. Spencer. AtKiko,hereportsdirectly to previously workedatInditexand Marks& the beautybrand’sdevelopment. Heerehas company Percassi,after11years managing Srl, theholdingcompanyforKiko’sparent named ceoandgeneralmanagerofOdissea manager. HereplacesMassimoDell’Acqua, Kiko hasappointedJanHeereasgeneral Italian budgetbeautybrandandretailer at theendofyear. corporate advisertothefirmwhenheretires over fromHirokiSuzuki,whowillbecomea this year,willassumetherole.Hetakes charge ofmarketingatPolasinceJanuary Yokote, whohasbeencorporateofficerin effective January1,2016.Yoshikazu and presidentforitsPolaIncsubsidiary, has namedanewrepresentativedirector Japanese beautyfirmPolaOrbisHoldings People France, salesgrew3%. declined 13%inNovembercomparedwiththecorrespondingprior-yearperiod.In the period,increasing42%and49%respectively.InSpain,salesofmake-uppalettes 2015, accordingtodatafrommarket-researchcompanyNPD. Sales ofmake-uppalettesinEuropedeliveredamixedperformanceNovember Data 38 RueduBac,the50m December 2015,itsthirdintheFrenchcapitalandsixthworldwide.Locatedat French fragrancebrandAtelierCologneopenedanewboutiqueinParis n News roundup Atelier Cologne also unveiled a new fragrance collection, Collection Orient, which Atelier Colognealsounveiledanewfragrancecollection,CollectionOrient,which Sales of make-up palettes in Italy and the UK witnessed double-digit growth during Sales ofmake-uppalettesinItalyandtheUKwitnesseddouble-digitgrowthduring Retail 2 (538ft n 2 ) shop features the brand’s signature Venetian ) shopfeaturesthebrand’ssignatureVenetian

publicationandprintmagazine • • • goingonintheindustryand stayingaheadofthecompetition The website -dailynews News headlinesdailyonwww.bwconfidential.com BW Confidential, theinsideviewoninternational beautyindustry

BW Confidentialisthedestination forkeepingup-to-datewith News headlinescomplementanalysis andinterviewsinourelectronic All majornewsontheindustry published everydayonourwebsite • The electronic publication-everytwo weeks DAILY NE STAY INFOR Source: NPDBeautyTrends % changeNov2015vs2014 Make-up palettesalesinEurope UK Spain Italy France Country • WS SERVICE MED WITHOUR The printmagazine -fourtimesayear % change @BWCbeautynews +42 +3 -13 +49 what’s

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L The buzz News roundup priced at €42.50, and a loose powder priced at €48.50. priced at€42.50,andaloosepowder€48.50. as wellporelesseffecttechnologytotightenandrefinepores. polymer thatcreatesasupplemeshtoensurecomfortandflexibility. that Diorsaysformsafilmadherestotheskinboosthold,withhydro-formulated the WearLockcomplex,whichcombinesawater-andsebum-resistantacrylicpolymer in mid-January2016.Thefoundationisclaimedtoprovidelong-lastingwearthanks LVMH-owned UAE andNKinStockholm,Swedenthismonth.Thefragrancesretailat€240for125ml. Lafayette HaussmanninParisaswellHarveyNicholsandBloomingdale’sDubai, October. Launchinginoneortwokeydoorseachmarket,thelinearrivesatGaleries like tuxedofabric,thecollectioninitiallyarrivedatBergdorfGoodmaninNewYork and benzoin. and whitemusks,Trench,acitrusirisfragrance,Caftan,createdwithincense scent, Caban,builtaroundpinkpepperandtonkabean,Saharienne,basedonneroli designer’s collections. of fivescentscalledLeVestiairedesParfumsinspiredbyiconicitemsfromthelate Yves SaintLaurent(L’Oréal)hasunveileditsfirstexclusivefragrancecollection,aline Launches n including virtual makeoversandintegratingtechnology intotheretailexperience. innovations inthebeautyspace aswellhostingseveralpaneldiscussionsonsubjects main show.Thetwo-dayevent fromJanuary6-7willhighlightthelatesttechnological from January6-9,2016,willhost itsinauguralBeautyTechSummitalongside Technology eventCES(Consumer TechnologyAssociation),tobeheldinLasVegas Trade shows February atSephorastores,selectedMarcJacobsboutiques and online. 2016 campaign,featuringproductsfromitsspringcollection, tolaunchin feature inprintadsandashortfilmshotbyDavidSimsforthe brand’s Marc JacobsBeautybrandfeaturingWinonaRyder.Theactresswill LVMH’s KendoBrandsislaunchingaprintanddigitalcampaign forits Communication experience in the sector, the majority of which were spent at Firmenich. experience inthesector,majorityofwhichwerespentatFirmenich. commercial activitiesinkeymarkets,thecompanysaid.Lecoeurhasover17years director. LecoeurwillleadIberchem’sglobalsalesteamandoverseetheexpansionofits The foundation is priced at €50. Dior is also launching Diorskin Forever make-up base, The foundationispricedat€50.DioralsolaunchingDiorskinForevermake-upbase, It alsocontainstheActiv-matcomplexthatcombinesmattifyingandsoft-focuspowders, Housed intall,squareheavyglassbottlesandtoppedwithblackcapsdesignedtolook Created asa“wardrobe,”theunisexcollectioncomprisesTuxedo,spicypatchouli has appointed Louis Lecoeur as global sales Fragrance creationspecialistIberchemhasappointedLouisLecoeurasglobalsales is launching a reformulated version of its Diorskin Forever foundation Dior islaunchingareformulatedversionofitsDiorskinForeverfoundation www.bwconfidential.com -December 17,2015 -January6, 2016#122 -Page5 n

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Offer valid until February 29, 2016 Lise Watier ceo Pierre Plassard International reboot Seven years after its exit from international markets, Canadian

Interview beauty brand Lise Watier is relaunching its export business. Company ceo Pierre Plassard, who joined the brand two years ago, updates BW Confidential on the brand’s strategy

Why is now the right time to relaunch export? In 2007, the brand changed ownership. Instead of focusing on international markets, which was the vision of founder Lise Watier, the new shareholders wanted to develop the brand in the US; it was not successful. We attacked a very complex, expensive market without a structured approach, so after a while the shareholders decided to pull out. Today, we have our shareholders’ full support and the means to invest internationally.

What are your plans for relaunching the international business? It’s complicated We are targeting several geographic zones. In the Philippines we should launch by to relaunch the January 2016. In Australia, we will be present before year end. Thanks to the TFWA “ World Exhibition in Cannes, we had other contacts in Southeast Asia, notably in Indonesia international business. and Vietnam, and in the Middle East, mainly Saudi Arabia, UAE, Kuwait and Iran. We You really need to hope to open all these countries by the beginning of 2017. It is not a race to grow sales. Today, business is very good in Canada, so we don’t need to go looking for revenues in convince people of international markets. Our idea is to build business in the right countries with the right your brand positioning partners, between five and 10 countries in the next five years, and slowly broaden our distribution. In Europe, we are registering our products, and we have advanced leads for and execution capacity online distribution. In five years, we hope international will represent 25% of sales.

What challenges do you face in relaunching internationally? It’s complicated to relaunch the international business, because even though we were Lise Watier ceo Pierre Plassard present before, people forget you. It’s been nearly 10 years, so the brand has lost some of its awareness internationally. The markets are more saturated with brands trying to carve ” out a place. You really need to convince people of your brand positioning and execution capacity in terms of investment and human resources.

What type of distribution channel will you target internationally? Lise Watier We will have the same type of distribution as in Canada, prestige distribution. It could be l Sales: C$45m (US$33.7m) Ulta in the US, pharmacies like Boots in the UK, traditional perfumeries in Western Europe l Sales by product category: and Russia, and department stores. We are also looking closely at e-commerce. We make-up 65%; skincare 20%; have our own e-commerce site in Canada and the US. We are studying the possibility of fragrance 15% working with pure players in certain countries that could help us to develop the brand. l Sales by distribution channel in Canada: Will you be launching your full product offer internationally? pharmacies 84% Today we have a range of 500 skus. In international markets, we will launch a smaller department stores 13% range of between 250 and 350 products in make-up, skincare and a single fragrance, e-commerce 3% Neiges. Neiges was successful in many countries before 2007, and we want to maintain it l No of points of sale: 1,000 in our portfolio. I want the brand to be the same in every country. n n n l Market share Canada: 7.4%

www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 7 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Lise Watier ceo Pierre Plassard

n n n How is your domestic business performing? This year, we are up 9% in sell-in and 10% in sell-out, while the prestige market is growing at +4-5%. This is firstly linked to our growth in make-up, for which our sales are up 11%. Make-up is our core business, and we have a strong expertise and launch four collections per year. We are also seeing strong growth in skincare, which is up nearly Interview 20%. Our skincare is growing fast thanks to our development with Canadian active ingredients, and we believe that this could resonate outside Canada. We have repositioned How do you plan to grow your skincare activity? We have plenty of room for growth in skincare, and the launches this year of La Crème “the brand from Sublime and Sublimessence serum have allowed us to grow strongly in the segment. something that At the beginning of 2016, we will launch a major product in the hydration segment, in which we are not yet truly present, with a Canadian active ingredient, Gaspésie algae. was very centered on Mrs Watier to a What is your strategy in fragrance? Our fragrance business has declined 4% because of our strategic choices; we don’t brand that is proud have the means to support the three axes in the same way, so we have invested energy of its Canadian and in make-up and skincare. In fragrance, we decided to concentrate on a single product, Neiges, which is ninth-ranked on the Canadian market. Montreal origins

Would you consider opening standalone stores? We will test the concept in 2016 in Canada with one or two stores, to see how Lise Watier ceo Pierre Plassard consumers react. We haven’t yet selected locations, but probably somewhere where we are well known, a city in Quebec, like Montreal, and a city where we are not so ” well known, like Calgary or Vancouver, to have two different approaches. We have repositioned the brand from something that was very centered on Mrs Watier to a brand that is proud of its Canadian and Montreal origins. A standalone in Quebec would also allow us to express that and in the other cities, it would give the brand more visibility, so we are working on both possibilities. n

s s The brand, which has 500 skus, plans to launch a smaller range of 250-300 references internationally

s Lise Watier has 1,000 points of sale

www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 8 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Trend outlook Tomorrow’s top-10 trends Insight

BW Confidential highlights 10 trends expected to dominate the industry in 2016 and beyond. Many products arriving on the market tap into several of these categories—food ingredients, technology and the environment are common threads transcending several areas highlighted, for example

Renewed innovation in skincare In most markets, skincare has seen a slowdown over the past few years as beauty firms concentrated more on the fast-growing make-up category. However, pockets of growth, especially in specialized segments and niches are expected to be boosted by continued innovation. “From a branding standpoint, more brands will be coming out of micro-niches,” says Brand Growth Management principal Kelly Kovack. Masks, for example, are one area that is not expected to slow down any time soon.

Ingredients from Asia Trend agency WGSN is predicting an ongoing focus on ingredients from Asia, which are gaining relevance in the West as brands seek new stories. WGSN highlights the use of traditional remedies by Japanese and South Korean brands especially. These include bee venom, which promotes collagen and elastin production, fermented products like rice, and ginseng, used by several South Korean brands like The History of Whoo and Sulwhasoo. The fermented product trend was launched by P&G-owned SK-II, whose story began at a sake factory where workers had soft hands because of contact with fermented rice, but this has now been picked up by many other brands from the region.

Personalization Consumers are seeking more meaning and less marketing in their beauty products and are looking for an experience rather than a specific product or brand. Beauty companies, especially in the startup space, are looking to tap into this in various ways. Machines for creating hydrogel- like masks at home using fruit and vegetables and collagen capsules are proliferating in Asia, while French startup Romy Paris has developed Figure, an at-home skincare formulating machine that creates targeted products. Meanwhile, Italian startup Hekaté offers an online platform for personalized product formulation. In the US, fragrance firm Mix-O-Logie (pictured) recently launched a kit made up of rollerball scents to be blended to create personalized fragrance, complete with recipe cards. Another American firm, Loli, champions the “kitchen beauty” trend, offering a monthly box filled with beauty ingredients. The web, meanwhile, is filled with DIY beauty tutorials, proving consumer interest in this segment. n n n

www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 9 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Trend outlook

n n n Seamless online/offline experiences Blending online and offline elements of service seamlessly has been an aim for beauty brands and retailers for some time, but it is a case of easier Insight said than done. Observers say that in store, technology should not be used for technology’s sake, but when it provides a real added service. Sephora has consistently been one of the leaders in this area, integrating digital elements into its stores in a relevant manner that taps into consumer desires and enhances the in-store experience (see p.12 for a visit to its latest US store concept). Kovack also highlights Paris-based niche fragrance store Nose as a good example of blending online and offline services successfully. Digital tools can be used to enhance the human experience in store, too, she says. For example with online training and digital tools, BAs have access to product information that allows them to offer more personalized consultations. Marionnaud, for example, launched Code Beauté (pictured) this year, an iPad tool that lets BAs suggest products suited to consumer tastes following a series of questions.

Ecology: no longer just a niche The environment is no longer just a niche category, and many of beauty’s biggest players, with L’Oréal at their head, have integrated Corporate Social Responsibility (CSR) policy at all levels of their business. Events like the recent COP21 summit in Paris, with which L’Oréal partnered, are bringing increased focus to the segment. Consumers are expected to be increasingly attentive to environmental concerns, says UK-based Mintel. The research firm has highlighted the growing importance of water sourcing, for example, and suggests consumers are becoming more open to using products that are less water-dependent or even waterless, with millennial consumers particularly receptive to such messages. Two in five UK consumers and one third of Italians said they would be interested in double-concentrated bath or shower products, for example, according to Mintel’s research. In beauty, this will involve more interest and innovation in wipes and dry body washes as well as botanical powders, plant waters and botanical oils as water alternatives, the research firm believes.

Small is beautiful Brands have been tapping into the on-the-go trend for some time now, offering portable products to cater to consumers’ busy lifestyles. In addition, retailers like Sephora have been increasingly adding specific areas for smaller product sizes. But one aspect that has been less of a focus until recently is waste: particularly in the make-up category, product expiry advice means that huge amounts of products are thrown away. Brands are beginning to tap into this niche, all the while offering consumers more portable solutions, which drive additional business. US-based startup TrèStiQue (pictured), founded by two former Intercos employees, is a good example. The brand’s two-in- one system of eight different products, each with integrated tools like sponges, brushes and sharpeners, means accessories and tools can be replaced as necessary, reducing waste and meaning users have fewer products to carry around. The increasing pressure consumers are under in terms of living space and free time will also push toward more mono-dose products, according to Mintel, as a means of saving space, energy and materials. n n n

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L Insight Shiseido, arebeginning totapintothesegment. n beauty productsaremainlyoffered bynicheandlocalbrands,majorinternationalcompanies, suchas materials combining nanotechnology and cosmetic properties one of its areas of focus. materials combiningnanotechnologyandcosmeticproperties oneofitsareasfocus. Messe FrankfurtwillstagethesecondeditionofitsAvantex trade eventforintelligentfabrics,with offering leisureclothinginadditiontotheircosmeticsoffer,thisisacategorywithpotential.InFebruary, company istargetingairlineswiththeoffer.WithanincreasingnumberofwellbeingbrandslikeRituals recently announcedtie-upbetweenL’OréalandUS-baseddigitaltrainingspecialistGeneralAssembly. Partnerships betweentechcompaniesandbeautyhousesmayalsobecomemorecommon,likethe easily developin-house.Coty’sacquisitionofdigitalmarketingspecialistBeamlyisacaseinpoint. Trend outlook Closer tohome to home—both in terms of growth and in their purchasing decisions. In Europe, suppliers to home—bothintermsofgrowthandtheirpurchasingdecisions.InEurope,suppliers With growthratesslowinginmanyemergingmarkets,beautycompaniesarelookingcloser Halal cosmetics larger retailers will have to better target their offer to local demographics in future. larger retailerswillhavetobettertargettheirofferlocaldemographicsinfuture. for localproducts,whileNPDglobalbeautyindustryanalystKarenGrantpredictsthateven and otherlocalingredientslikeobsidianstone.Smallerretailersalsocitegrowingdemand Soha (pictured),whichbasesitsproductsontheMediterraneanisland’sCannonaugrape what hashappenedinthefoodworld.ExamplesincludeSardinia-basedskincarebrand brands areincreasinglytappingintoconsumers’desirestobuylocalproducts,mirroring attractive asaproductionbase.Butthistrenddoesnotjustapplytosourcing:smaller say thereisreneweddemandfortheirproducts,asChinainparticularbecomeslesscost- of 13.7% for the global halal cosmetics market between 2014 and 2019. While halal of 13.7%fortheglobalhalalcosmetics marketbetween2014and2019.Whilehalal for cosmetics,thepotentialishuge: market-researchfirmTechnavioanticipatesaCAGR Malaysia, the proportion stands at 60%. Coupled with these nations’ growing appetite Malaysia, theproportionstands at60%.Coupledwiththesenations’growingappetite No longer just a niche, halal cosmetics are expected to be big business going forward No longerjustaniche,halalcosmeticsareexpectedtobebig businessgoingforward the Indian subcontinent. Some 88% of Indonesia’s population is Muslim, according to Indian subcontinent.Some88%ofIndonesia’spopulationis Muslim,accordingto as brandstapintodemandnotjustintheMiddleEast,but SoutheastAsiaandthe CIA World Factbook World CIA n acquisitions for example, in order to master capabilities they cannot acquisitions forexample,inordertomastercapabilitiestheycannot that beautycompanieswillincreasinglytapintothetechspace,via easy tobeleftbehind.BrandGrowthManagement’sKovackpredicts when itcomestokeepingupwiththelatesttechdevelopments,is Beauty brandsaregreatatcreatingandmarketingtheirproducts,but www.bwconfidential.com -December 17,2015 -January6, 2016#122 -Page11 aloe vera, which it claims moisturizes the skin while you sleep. The aloe vera,whichitclaimsmoisturizestheskinwhileyousleep.The Active (pictured),arangeofsleepwearmicro-encapsulatedwith on supermarketshelves.UK-basedMatrixAPAhaslaunchedHydra Nivea nowoffersleggingsandshortswithmicro-encapsulatedQ10 have sofarlargelyfailedtotakeoff.Thiscouldbesetchange. Cosmeto-textiles havebeenpittedforgrowthseveralyears,but Beauty textiles:categorycrossover Bringing techexpertisein-house , making it the largest Muslim population worldwide, while in , makingitthelargestMuslimpopulationworldwide,while in Store visit

Fun times in store Sephora aims to teach, inspire and play with its new US store concept

ephora US is looking to enhance the in-store beauty experience with its new concept, SSephora Beauty TIP Workshop—TIP stands for “teach, inspire, play”. The concept showcases a range of new in-store experiences combining online and offline elements that the retailer describes as the “next generation” of the Sephora store. “By fusing hands-on service and technology we’re creating a new experience that will teach and inspire, while allowing clients to play with beauty. This is just the beginning,” said Sephora Americas president and ceo Calvin McDonald. The 8,500ft2 (787m2) store on San Francisco’s Powell Street is built around The Beauty Workshop, a central workstation area where up to 12 customers can join group beauty classes either during or after store opening hours, access tutorials on iPad stations and view The Beauty Board, a shoppable gallery that offers user-generated content on a large digital screen. Each workstation is equipped with an iPad, USB port and Wi-Fi to encourage maximum interactivity. Near the street entrance, the Beauty Studio offers larger areas for makeovers including Sephora + Pantone Color IQ touchscreens with technology that has been updated to Sephora Beauty include lip color and concealer, as well as new lighting. The area is staffed by three TIP Workshop make-up artists. For skincare consultations, Sephora has introduced the Skincare Studio. l Opened: November 2015 The San Francisco store is one of the first to integrate the concept, which includes a sink l Location: San Francisco, US and four workstations offering a mini facial service and a touchscreen station to access the l Size: 8,500ft2 (787m2) Skincare IQ diagnostic tool. l Special features: Fragrance also gets the digital touch with the addition of InstaScent technology to focus on teaching, inspiration Sephora’s Fragrance IQ service. The technology allows customers to explore scent families and play with central workstation by diffusing them in the air through a nozzle. This allows shoppers to test scents before area, a larger makeover space, discovering individual fragrances with one of the store’s fragrance experts. new digital features and spaces The idea of being able to play in the store is also visible in the presence of new Hair Play to experiment with and learn Station and trend tables in each category to encourage customers to explore and try out a about a curated selection curated assortment of products. n of products

www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 12 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Store visit

s The Sephora Beauty TIP Workshop has a strong focus on digital, with iPads and color and fragrance IQ technology

s The store features Sephora’s new Skincare Studio concept

www.bwconfidential.com - December 17, 2015 - January 6, 2016 #122 - Page 13 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL BW Confidential The inside view on the international beauty industry

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