Marketing Makeup for Men

Makeup for men is gaining increased marketing attention worldwide. "Makup for men is a thing now" read the headline on MarketWatch last August, and it's even more of a thing in 2018.

For instance, David Beckham has a new men's grooming brand, House 99, marketed by L'Oreal. Just launched--and already its Facebook page has more than 11k followers.

MMUK Man opened the first retail store specifically for men's skin-care products only a few months ago. The five-year-old brand is growing rapidly and showing bigger brands that this is a niche worth watching.

Another startup, Ava-J, is also leveraging men's interest in skin care by marketing grooming products and looking for boutique distribution, not supermarket distribution.

Cosmetics for men are a major trend in China these days, where global brands like L'Oreal, Nivea, and Clinique are especially prized.

Watch for more major brands to launch product lines targeting men and create distribution deals to ensure that men know where they can find these new products in retail channels.

Marketing Private Brands

Private brands--also known as private-label--are created or owned by retailers and other channel intermediaries.

Supermarkets are heavily into private brands, as are many general merchandise retailers like JC Penney (which owns Arizona, shown at right). Why? Because these are exclusive to the store and, just as important, they have higher profit margins.

Twenty years ago, an article in the Harvard Business Review said:

... private-label strength generally varies with economic conditions. That is, private-label market share generally goes up when the economy is suffering and down in stronger economic periods.

Today, however, the economy is strengthening and so are private brands. For example:

• Kohl's is seeking a turnaround based on private brands such as Sonoma, Croft & Barrow, and others that are or have been mainstays of its revenue base. However, how will this resonate with shoppers seeking well-known national brands?
• JC Penney is also putting more emphasis on private brands such as St. John's Bay and Arizona as it seeks a turnaround. In 2015, private brands accounted for 52% of Penney's sales--but by 2019, the marketing goal is to have private brands contribute 70% of Penney's sales.
• Target wants shoppers to prefer its private-label food products, marketed under brands such as Market Pantry and Simply Balanced.

Private brands are here to stay. The question is, how much emphasis is too much emphasis?

Are Department Stores Dinosaurs?

The uncertain future of department stores has been discussed for more than 30 years, with the rise of specialty stores, consumer preference for lifestyle shopping centers instead of enclosed malls, and--of course--online shopping.

During the 1980s and 1990s, department stores and mass merchandisers were making significant changes behind the scenes. Point-of-sale terminals replaced cash registers, and personal computers brought data analysis to management's fingertips. Managers could see hourly sales trends instead of waiting for end-of-month numbers.

In those days, department stores like Saks and Sears still offered private-label credit cards, which in turn allowed them to see who bought what and how often. Credit was frequently a source of profits, not just an engine for supporting sales increases. (Today, nearly all store cards are operated by non-retailers). Remember, Sears founded the Discover card, using its expertise in the credit industry. Here's a case study about Sears that offers clues to some of the retail challenges of the time. And here's a quick look at how Sears evolved over the years.

The question of whether department stores are dinosaurs bound for extinction is still being asked. A real estate analysis firm recently estimated that department stores would need to shutter hundreds of branches to return to the sales-per-square-foot productivity levels of 2006. That translates into a sea of empty anchor stores all over the country. Malls are trying to update the shopping experience to bring consumers back, to go to the movies or for specialty stores that are especially in demand.

In a world where promotional pricing attracts shopper attention, department stores are joining in, and that's making waves for high-end brands. Michael Kors is going to limit the number of products it sells to department stores to avoid having its lux image affected by promo pricing.

Department stores are also making some other adjustments. Macy's is closing a few dozen stores, and Sears/Kmart is closing some stores as well. Macy's has begun rolling out "Backstage" off-price stores within stores to utilize space and attract price-conscious shoppers who might otherwise go elsewhere. Sears is leasing some of its space to other stores, such as Primark.

It's still too early to deem department stores dinosaurs.

More About the Gray (or Grey) Market

GRAY MARKET MARKETING

My recent post about Pirate Joe, a gray market retailer, was so popular that I'm following up with another post about the gray (or grey) market.

The gray market is also called the market for parallel imports because products are procured outside the regular channels--not an illegal practice. Also not a new practice.

An electronics retailer like B & H in New York City may import a branded camera or video unit without going through the manufacturer's official channel(s), for instance. In fact, that's exactly what B & H does in some cases--and it notifies customers on its website about how and why it uses a channel it calls direct import, meaning not through the manufacturer. The reason: the product is cheaper to buy and therefore can be sold at retail at a lower price than the same branded product is being sold at other retail outlets.

However, manufacturers may legitimately refuse to service such products or provide technical support if the items were not purchased from authorized retail channels. Nikon is one of many manufacturers that say so on their websites.

This is an ongoing situation in some product categories, including electronics and luxury goods. As a result, Chanel recently reduced its prices in China to avoid losing sales to non-authorized merchants who were purchasing abroad and selling at prices well below Chanel's retail prices.

Interestingly, companies like Kodak see the gray market as an opportunity to help brands protect themselves. Kodak Security Systems will help firms monitor the flow of products and defend against competition from gray market activities.