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NPD: Makeup sample subscriptions pay off for manufacturers, retailers

BY Antoinette Alexander

PORT WASHINGTON, N.Y. — Among women who subscribe to makeup sample subscription programs, 83% were influenced to buy the full-sized product, according to recent research by global information company the NPD Group.

“The idea of offering samples has been around for some time, but sample subscription programs are a fresh way for manufacturers and retailers to engage with interested consumers and monetize their sample programs, while consumers discover brands or products they may not have been aware of previously,” stated Karen Grant, VP and global beauty industry analyst, the NPD Group. “Women strive to find a makeup product that works for them, and when they do, that is the primary reason they become loyal to it.”

Most women like to self-test products without pressure, and samples give them that ability. Take home samples are the second most popular makeup shopping preference, over things like salesperson explanation and personal consultation, but retailers are finding new ways to incorporate samples into the shopping, and even purchasing, experience. One in five makeup users have received a makeup sample in the past year, primarily from retailers (17%), according to NPD’s 2014 Makeup In-Depth Consumer Report.

Women under the age of 55 years, specifically the 18- to 34-year-olds, are most likely to report receiving a makeup sample in the past year. Makeup samples strongly influence purchase decisions for about one-third of women, while more than half are somewhat influenced by these samples. The 35 to 54 age group is the most likely to be influenced by samples, indicating opportunity that goes beyond the youngest generations.

“Sample subscriptions are still relatively small in their reach, but their potential impact on the makeup industry is significant. Incorporating this method of product discovery into a marketing and sales strategy can uncover new consumers and expand on target audiences,” added Grant.
 
 

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Walgreens names Kraft Foods veteran Timothy McLevish EVP/CFO, succeeding Wade Miquelon

BY Michael Johnsen

DEERFIELD, Ill. — Walgreens on Monday announced the appointment of Timothy McLevish as EVP and CFO. He will report to president and CEO Greg Wasson, effective immediately, and lead all of Walgreens finance functions as the company prepares to move forward with the proposed second step of its strategic partnership with Alliance Boots.
 
McLevish comes to Walgreens from Kraft Foods Group, one of North America’s largest consumer packaged food and beverage companies, where he most recently served as EVP and CFO. Prior to Kraft, he served in CFO roles for Ingersoll-Rand, the diversified industrial company, and Mead Corp., a forestry products company. McLevish also served in a leadership role at Zellerbach Paper Company, where he was VP and general manager. He is a graduate of the University of Minnesota with a bachelor’s degree in accounting and economics, and also earned a master’s degree in business administration from Harvard University.
 
“We are pleased to welcome Tim to lead our financial operations into the next chapter of Walgreens ongoing transformation as we continue to accelerate our strategic growth drivers, expand globally with Alliance Boots and prepare to embark on our journey to create the first global pharmacy-led, health and wellbeing enterprise,” stated Greg Wasson, Walgreens president and CEO. “With Tim on our senior management team, Walgreens and Alliance Boots will benefit not only from his deep and rich experience in the consumer products market, but also from his experience in bringing together companies to ensure efficient, effective and profitable growth and value creation.”
 
“It is a privilege to join such an admirable company, especially at this exciting and pivotal time as Walgreens expands to become a global enterprise,” McLevish said. “I look forward to helping Greg and the team achieve the company’s important mission and carry out their remarkable vision to expand health and wellbeing across America and around the world for the benefit of customers, patients, health care partners and shareholders.” 
 
McLevish succeeds Wade Miquelon, EVP, CFO and president of international for Walgreens, who will continue as an advisor to assist the company with the transition as it considers the exercise of Step 2 of its strategic partnership with Alliance Boots. Miquelon also will move forward to pursue several new opportunities outside of the company.
 
“Wade's remarkable leadership, strategic vision and expertise played a critical role in helping Walgreens transition and transform from a 20th century American drugstore chain into a 21st century global health and wellbeing enterprise, setting the stage for a new generation of growth and value creation for all,” Wasson said.  “Wade has been a strong contributor as together we charted and pursued a bold new course for Walgreens globally. We know Wade can’t resist a new challenge, so we thank him and wish him the very best as he moves forward with the next chapter of his outstanding career.”
 
“It’s been one of the greatest privileges and pleasures of my career to help Greg and the team to bring this iconic American company to the brink of becoming a fully global health and wellbeing enterprise to serve the world,” Miquelon said.  “This truly has been an incredible journey and chance to serve. Now that we are preparing to move forward with bringing together these two iconic brands, it’s the right time for me to transition to new challenges and new opportunities. I know Tim will bring tremendous experience and insight to this exceptional company and continue to grow and develop an outstanding finance and accounting organization.”
 
Miquelon joined Walgreens in June 2008 as SVP and CFO, and was promoted to EVP in 2009. In 2012, following his leadership in establishing Walgreens strategic partnership with Alliance Boots in June of that year, Miquelon assumed an expanded and global leadership role as EVP, CFO and president, international, and joined the board of Alliance Boots. As he continued to lead Walgreens finance functions as CFO, Miquelon also served as Wasson’s senior leader in collaborating with the Alliance Boots management team to execute the new global strategic partnership.
 
Among many other achievements at Walgreens, Miquelon played a central role in launching and advancing the Walgreens-Alliance Boots strategic partnership. In March 2013, Miquelon also led the establishment of the Walgreens-Alliance Boots strategic, long-term relationship with AmerisourceBergen of Valley Forge, Penn., to streamline the distribution of pharmaceuticals and leverage global supply chain efficiencies.
 
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Cardinal Health reports $91 billion in fiscal 2014 revenue

BY Michael Johnsen

DUBLIN, Ohio — Cardinal Health on Monday reported fourth-quarter fiscal 2014 revenue of $23 billion, down 9.8%. Fourth-quarter revenue was up 12% excluding the impact of the Walgreens contract expiration, the wholesaler reported. 
 
Fiscal year 2014 revenue was $91.1 billion, down 9.9% from fiscal year 2013 revenue of $101.1 billion. 
 
"I am extremely proud of the progress we made in a year of transition for both Cardinal Health and the health care system," stated George Barrett, chairman and CEO Cardinal Health. "We made significant progress on our strategic priorities: launching the largest generic purchasing entity in the U.S. through our joint venture with CVS Caremark, expanding our position and capabilities in specialty, substantially increasing our line of consumable medical products, taking significant steps to enhance our program on physician preference items in both cardiovascular and orthopedics, enlarging our footprint in the home, and showing continued strong growth in China."
 
In fiscal year 2014, the company generated $2.5 billion in operating cash flow and returned $1.1 billion to shareholders through dividends and share buybacks.
 
Barrett continued, "We enter fiscal year 2015 well-positioned to address the needs of a rapidly changing health care system. Our fiscal year 2015 outlook for non-GAAP diluted EPS from continuing operations is $4.10 to $4.30."
 
Fourth-quarter revenue for the pharmaceutical segment decreased 12% to $20.1 billion, and segment profit decreased 5% to $377 million. The decrease in both segment revenue and profit was due to the continuing impact of the expiration of the Walgreens contract.   
 
Excluding the impact of Walgreens, fourth-quarter revenue for the pharmaceutical segment grew 13%, driven by organic sales growth, growth in the company's specialty solutions division and China. The impact of the Walgreens contract expiration on segment profit was partially offset by strong performance under generic programs.  
 
For the full year, revenue for the pharmaceutical segment decreased 12% to $80.1 billion, and segment profit increased 1% to $1.7 billion.
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