Retailers embrace ‘New General Market’
This past year goes into the books as the year drug and discount retailers fully embraced the concept of the New General Market. Realizing consumers think and shop differently — especially multicultural and millennial shoppers — retailers revamped signage and selections to meet these new demands.
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By doing so, they gained a competitive edge against department and specialty stores who have been slower to do so, according to industry expert Allan Mottus.
The beauty department arguably is the biggest category getting overhauled, especially hair and skin care. Research suggests women shop for beauty by needs rather than ethnicity. Validation of that point comes from a May 2015 report from Sundial revealing that more than 50% of women select products for skin or hair types, or beauty need. Only 7% indicated they selected products based on race.
Compounding that is the blending of America. “Moms walk into my salon with offspring hair they don’t know how to care for, such as an Asian mom with straight hair who didn’t know how to care for her daughter’s curls she inherited from her Jewish dad,” explained Cozy Fried man, who owns kid-friendly salons in Manhattan and has launched a line of hair care for kids.
As part of this movement, signage is being changed in stores, eliminating such terms as “ethnic hair care,” which were the norm for the past 30 years. In non-beauty categories, delineation between boys and girls is being eliminated. With the use of social media, retailers said they could direct messages to specific market segments, but allow them to shop how they want in stores.
“Women with thick, curly hair aren’t limited to one race,” said Richelieu Dennis, founder and CEO of Sundial Brands, adding that almost 100 million women in the United States alone claim to have textured hair. Dennis defined the New General Market as “an amalgamation of cultures, ethnicities and demographics aligned against commonalities, need states and lifestyles.”
A similar situation exists in skin care. While skin lighteners or products to address hyper-pigmentation often are thought of as purchase by black consumers, the reality is these situations exist among all women, said a buyer for a major drug chain.
Mining personal grooming routine data
It’s 7 a.m.; do you know where your customers are? According to a report on global beauty routines conducted by analytics company RealityMine, that’s the peak time for personal grooming.
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And that’s not all consumers are doing. Activities in conjunction with personal grooming in most countries include relaxing, eating a meal and accomplishing household chores. Consumers also are multi-tasking by watching TV or checking mobile devices. While most people across the globe — 80% — are on their own during their beauty routine, people in Mexico like to use products together.
RealityMine gleaned its results from a comprehensive analysis of beauty routines using panelists from the United States, Australia, France, Mexico and Russia. The findings yielded relevant information for marketers and retailers trying to understand how to maximize efforts to reach consumers around the world. With Euromonitor reporting that men spend an average of 28 minutes per day on beauty routines, and women 42 minutes, it is crucial to understand the context of when and how they do it, suggested Alice Sylvester, chief growth officer at RealityMine.
“We think understanding the element of timing is one of the most important facts a marketer can use today,” she added. And it isn’t just when they are undergoing their rituals, but also the mindset they are in. The information can be used for effective marketing messages. “People like to see themselves in communications,” she said. And with many companies expanding internationally, the data helps illuminate cultural nuances.
There’s good news for beauty companies. Based on the data, people of all nations have mostly positive emotions when engaged in grooming. Digging deeper into data, moods slump later in the day. That could be a good time for a beauty company to “own” that time by delivering an uplifting thought or suggestion to elevate the mood — anything from recommending reapplying lip color to freshening up perfume.
It isn’t a one size fits all world, noted Sylvester, who said understanding different habits can help companies target for each country.
Doing well by doing good
Two years ago when Jennifer Walsh started her line of grooming products — Pride & Glory — bearing the logos of major college teams, she knew she wanted to give back to the communities supporting her.
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Walsh had recently volunteered her time donating clothes to those impacted by Superstorm Sandy, and pledged to continue to make a difference. Now 2% of her profits from the sale of each Pride & Glory grooming item goes back to the charity of each college in her product lineup’s choice.
“What if I created a beauty brand that, at its core, was about giving back to local communities? Could this concept literally change lives through beauty? When one person uses their voice for change, they can make a real difference,” Walsh said.
She’s not alone. A study from Cone Communications revealed more than 66% of companies support causes in some form. Funding from cause marketing has more than doubled in the last 12 years in North America. In fact, the concept is forecasted to drive $1.92 billion in funding to causes in 2015, according to CauseGood, an organization that helps advise companies on the concept.
Cause marketing — defined as the marketing of a for-profit product or company, which benefits a nonprofit or supports a social cause in some way — is not new. Paul Newman illustrated the power of doing well by doing good with his Newman’s Own brand, founded in 1982, which donates 100% of after-tax profits to charitable organizations, and has raised more than $450 million for charities in its history.
Toms has provided one pair of shoes to those in need for each purchase since it was founded in 2006 — the company recently has extended into eye wear — while myriad companies allocate a percentage of certain item sales during specific months, such as sales in October benefiting breast cancer research.
What is emerging, however, is a new consumer who seeks out these brands rather than just viewing philanthropy as a nice add on. These shoppers are passionate about the companies and causes. They appreciate that they can make contributions in a frictionless manner by buying products they need anyway.
Millennials may be driving the surge, but the desire to support good causes stretches across all demographics. Research presented by Cause-Good supports the swelling approval of brands or merchants with philanthropy behind them. Ninety percent of consumers said they were likely to switch brands to one that puts money into a worthy nonprofit organization, according to a study.
“Consumers love companies that give back because it makes them feel like they are part of the cause,” said Deborah Kerner, president of Diane Terman Public Relations, who often counsels her accounts on how to pinpoint the right partner. “Not everyone has the means to contribute to the causes they would like to, but if they make a purchase where a percentage goes to a cause they are concerned about, it helps them feel like they are doing something to contribute.” People like to see corporations integrate social impact campaigns into business models, she added.
And it is becoming a business pillar. According to CauseGood, 97% of marketing executives believe cause marketing is a valid business strategy.
Cause marketing can help a brand stand out from the pack in crowded categories, while also attracting new consumers who are even willing to spend more for the products. CauseGood cites statistics that when quality and price is equivalent, social purpose is the No. 1 deciding factor for consumers globally. Forty-two percent of North American consumers said they would pay extra for products and services from companies committed to positive social and environmental impact.
The goodwill extends to retail doors, too.
Social media has helped spread marketers’ campaigns, while also allowing consumers an avenue to let others know of their support. According to the Cone Communications Social Impact Study, 88% of Americans want to know about corporate social responsibility efforts. In fact, they like to see it on product packaging or labels. More than half even read the label before buying to ensure a product is committed to positive social and environmental efforts.
Kerner, however, has a word of caution about just picking a cause without forethought. “Companies looking for causes to contribute to need to do their research. Causes might charge a fee for a company to participate and align in a charitable program, use of their name, logo, etc., and that’s the biggest mistake a company can make — the cost of participation may be more than what they can actually contribute, she warned. And, consumers do research to make sure donation claims are authentic. They don’t want to see an organization just slapped onto a brand without reason behind it.
While Toms and Paul Newman are well known for charitable efforts, following are 10 more brands and organizations that are giving back in a meaningful way. This is not a definitive list of rankings — there are no winners and losers here. These are just some snapshots of companies that are doing well by doing good.
After the 1994 Northridge earthquake in California, Howard Schiffer, an expert in childhood health, was called upon to get vitamins to victims of the after-effects of the earthquake. That encouraged him to create Vitamin Angels, which helps at-risk populations gain lifesaving vitamins and minerals. Walgreens works in tandem with Vitamin Angels, with a recent campaign raising more than $5.5 million and reaching more than 21 million children.
Beyond ushering in new natural choice options in beauty, Ido Leffler, a co-founder of Yes To, wanted to do more than just sell products. The Yes To Seed Fund was born and has provided more than 50,000 meals around the world. He then set his sights on much-needed school supplies and launched a stationery line at Target called Yoobi, which for every item purchased donates double that to a classroom in the United States. So far, sales have helped more than 1 million children.
Just as important to Sundial’s founder and CEO Richelieu Dennis’ efforts to change the way retailers merchandise beauty care, he’s equally driven to make sure the company is a good corporate partner. Not only are the items made from natural, certified organic and ethically sourced ingredients, Sundial adheres to what Dennis calls “community commerce,” a purpose-driven model that builds stronger communities and better business. Since 2011, Sundial Brands has invested approximately $5 million to support women’s empowerment efforts in three primary areas — entrepreneurship, education and equality — via community programs, procurement, foundation donations and needs-based development programs, among others.
Pantene Beautiful Lengths
When Emily Campeas went to donate her long locks to a worthy cause last year, her Internet research took her to Pantene Beautiful Lengths, where she was confident her beloved hair would go directly to cancer patients and not be sold. Pantene Beautiful Lengths works with HairUWear and the American Cancer Society to take the donations and create high-quality, real-hair wigs at no cost to women undergoing cancer treatment.
Tide Loads of Hope
Hurricane Katrina kicked off Tide’s mobile laundromat that provides residents at least some vestige of normalcy during a tumultuous time. Since that time, Tide has helped renew hope for nearly 45,000 families across the country affected by natural disasters, from tornadoes in Missouri to flooding in South Carolina. Tide helps support its efforts through sales of nostalgic Tide t-shirts.
Dove Self-Esteem Project
Over the past 10 years, Dove has been helping girls reach their full potential, overcoming issues keeping them from their best. More than 17 million have been touched so far through myriad campaigns that also have netted Dove tremendous public relations impressions.
Unilever Sustainable Living Plan
This is the blueprint for Unilever to double the size of its business, but also reduce its environmental footprint while boosting the company’s positive social impact. Among the moves are changing how raw materials are sourced, as well as operating LEED-certified facilities.
SoapBox Soaps was founded in 2010 in the college apartment kitchen of David Simnick and is now a brand found in many major chains, including Target, Whole Foods and Giant Eagle. For every item sold, SoapBox donates a bar of soap or a month of clean water to those in need.
Doing good isn’t limited to human purchases. BarkBox, a monthly dog treat subscription service, supports 3,000 rescues and shelters, as well as other animal support nonprofits.
Like Toms, Method has pioneered responsible marketing practices. The company gained shelf space in crowded household categories by adhering to responsible ingredients-sourcing, green chemistry and recycled and recyclable packaging.