Ex-Coty Marketer Advocates Retail Reform

Mass-market outlets can be redesigned to spur sales

By Marshall Pearson, Assistant Editor

Beauty products have proven to be largely recession-proof in years past, but according to marketing consultant Michael Ferrara, the current economic environment is having a larger negative impact on the industry than expected. His solution: have mass-market outlets increase sales by redesigning beauty displays at retail outlets.

Ferrara, a notable member of the marketing community for many years, has the experience necessary to back his proposed approach. Prior to his appointment as senior vice president of U.S. marketing for Coty, he served in a variety of senior sales and marketing positions at Unilever Bestfoods and The Nielsen Company. During his 10 years at Coty, he helped its U.S. leadership team boost the company’s value from $1 billion to $4 billion, implemented new marketing strategies and developed the marketing strategy for Rimmel London’s U.S. launch. Recently, Ferrara has been consulting for Mphasize and has spoken at the CMO Summit and the Consumer Goods Annual Sales & Marketing Summit.

By using comprehensive qualitative and quantitative research gathered with the help of market research firm Information Resources Inc., Ferrara was able to identify several important traits of the average cash-strapped beauty consumer, trends in the marketing of beauty products and how the disconnect between the two drives sales downward. Department stores are, he says, leaking customers and many have experienced sales declines of up to 30%. More consumers are shopping in what he refers to as “quick trips”—a shopping excursion of approximately 15 minutes in length in which the average consumer spends roughly $22 on five items or less. Ferrara’s research has also revealed that the most-purchased items in these quick trips, second only to pharmacy goods, are beauty products. To him, these facts represent a huge opportunity for mass-market chains.

“Shoppers are visiting department stores less,” he says. “Beauty is a highly impulsive category with between 70% and 80% [of beauty products] bought on impulse. Mass retailers have window of opportunity.”

These spontaneous tendencies can only lead to increased sales if mass retailers re-think their strategy and in-store display, but whether or not this change will come about is uncertain, according to Ferrara. He has observed that the average beauty display in a mass-market retailer is disorganized, that products are not available for consumer testing and that no assistance is available to shoppers. Consumers are not provided an enjoyable environment, and he feels that this routine could be hard to overcome for many chains.

“It’s hard to change the way someone’s been doing business for many years. You have to get them out of the box they’re in,” he says.

In his speeches at the CMO Summit and the Consumer Goods Annual Sales & Marketing Summit, Ferrara offered several ideas that, if implemented, could allow many retailers to capitalize and increase their in-store success. He advocates educating consumers about the scents present in each line of fragrance, creating exciting visual elements for the in-store display, arranging products on the shelf to highlight new brands and feature a wide range of celebrity products. Ferrara feels that if marketers working for mass retail outlets implemented these changes, they would be able to identify with the average shopper on a quick trip and increase their profits.

“The in-store environment is one of the best consumer destinations to speak to her as marketer. We forget how critical it is to make a connection with her in the store,” he says. “These quick trips represent a big opportunity for retailers to drive more impulse purchases, resulting in larger baskets and improved margins.”

Despite the uncertain future for beauty products at mass retailers, Ferrara has found most chains willing to work outside the box are open to his profit-boosting ideas. In the course of his consultations, he has brought executives to focus groups specific to their store. Hearing exactly what consumers think of the beauty shopping experience has proven illuminating for retailers, he says. Mass-market retailers who work with marketers to properly implement these techniques will have success, and he predicts change will come sooner rather than later.

“I am very confident that you will see some, if not all, of the major national mass market retailers rolling out some new concepts in the next six-12 months,” he says. “For those who work collaboratively, I truly believe everyone will win—consumer, retailer and manufacturer.”

CVS/pharmacy’s Beauty 360

Ferrara’s instincts may already have proven accurate as CVS/pharmacy debuted Beauty 360 in November of 2008. Beauty 360 is a marketing concept that attempts to drive sales forward by assisting the quick trip shopper with in-store beauty professionals.

Beauty 360 will highlight both beauty and niche brands in the skin care, cosmetics, men’s grooming and fragrance categories. In addition, the in-store assistants will receive extensive training and be able to perform mini-manicures, express facials, hand massages and make-up application.

“Beauty 360 is the natural evolution of CVS/pharmacy’s leadership within the beauty category,” says Mike Bloom, senior vice president of merchandising at CVS/pharmacy. “This new concept will redefine the beauty shopping experience by providing customers with access to prestige and niche beauty brands as well as an unparalleled level of service.”

Currently there are two pilot Beauty 360 locations, one in Washington, DC and one in Mission Viejo, CA, but more are likely to launch later this year.