Building Emotional Bonds Through Engagement Measurement

http://www.brandkeys.com/news/press/sense&scent.PRKC.pdf

The Fragrance Industry has recently acknowledged the need to learn to better measure the emotions, insights and expectations of today’s “bionic” consumers. Today, these industry targets are more visually and brand literate than ever before. Their values shift months – and sometimes years – ahead of focus group articulations and “trends” too invasive to ignore. These consumers have more gate keeping power than ever before, and more choices than gate keeping power, all of which makes it more and more difficult for business-as-usual approaches to bring the brand “magic” back to a new generation of fragrance consumers. In fairness, the industry has acknowledged the need to evolve from a functional to emotional paradigm. Most recently, an article in the June/July 2007 issue of International Cosmetic News noted that industry analysts question whether today’s fragrance marketers are really focused on building sustainable brand identities, which can’t be done in the absence of an emotional connection. Don Loftus, president and CEO of Procter and Gamble Prestige Products, noted the need for “understanding the consumer perceptions of a certain brand universe … to develop meaningful propositions.” You can’t do that in an emotional vacuum either. And while these problems are receiving greater notice, it seems that the role that consumers play at the front end of the product and brand development process continues to be somewhat less than “fundamental.”

2011 Cosmetic Brand Loyalty Rankings Released, Beauty Packaging News

http://www.beautypackaging.com/news/2011/02/15/2011_cosmetic_brand_loyalty_rankings_releas

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The "Decade of Delight" describes the key expectation of today's consumers, in the 15th annual Brand Keys Customer Loyalty Engagement Index (CLEI) survey conducted by the New York-based brand and customer loyalty and engagement consultancy (www.brandkeys.com).

For all 48 brands tracked in the Cosmetics category, attributes relating to "experience" and "authentic innovation" in products and services are exerting the strongest impact on customer decision-making, category-expectations, and engagement with brands.

While expectation levels for delight vary by category, brands in the Cosmetics category that were best at creating customer delight were: Lancome, Mary Kay, Elizabeth Arden, Clairol, L'Oreal, Aveda, and Suave.

"This evolution has been accelerating for some time. Brand value has increasingly been defined not through the narrow lens of price, but in terms of the total experience that consumers have when they interact with a given brand. This year's results demonstrate that concept has truly taken hold, showing its greatest increase in expectations in the purchase drivers centered on attributes that most strongly impact the customers' overall experience," noted Robert Passikoff, Brand Keys founder and president.

"The CLEI data is predictive of coming shifts in the consumer marketplace – 12 to 18 months before it shows up in traditional research. Given the levels of commoditization we've witnessed in product/service delivery and pricing/promotion strategies it is no surprise consumers are looking for their favorite brands to make a real difference. Consumers know the brands, know what they do, and know what they're willing to pay for them," said Passikoff. "They're looking for delight."

"Innovation is key, whether it's innovation in the products themselves, or innovation in how those products are put into the hands of consumers - from rapid delivery to product introductions – and the after-life of service and support that the consumer experiences. And, consumers want meaningful innovation that results in a higher level of experience. Satisfaction has never been more cost-of-entry; delight is the new differentiator," added Passikoff.

This year consumers' skyrocketing desire for experience and authentic innovation are exerting the strongest impact on customer decision-making and profitable engagement with the brand. Brands able to meet – even exceed – these expectations become category leaders. "This only matters, of course, if you're keeping score by counting sales and profits, and not merely tracking awareness levels," added Passikoff.

For the Brand Keys 2011 survey, 46,000 consumers, 18 to 65 years of age, drawn from the nine US Census Regions, self-selected the categories in which they are consumers, and the brands for which they are customers. Seventy-five percent (75%) were interviewed by phone, 20% via face-to-face interviews (to account for today's of the population who are cell phone-only consumers,) and the remaining consumers assessed categories and brands online.

Ten (10) new categories were added to the 2011 CLEI and included Drug Stores, E-Readers, Hair Conditioners, Movie Rentals, Online Retailers, Shampoo, Social Networking Sites, Tequila, and Tooth Whiteners, bringing the total number of categories and brands to 79 and 528 respectively.

"At a time when Cosmetic brands are struggling to differentiate themselves and find ways to profitably engage their customers, the changes this year serve as a real benchmark for marketers. Products and services that respond with a truly consumer-centric view of their category - delighting the customer - based on predictive loyalty metrics, stand to gain the most, and establish themselves as this decade's brand leaders," concluded Passikoff.

Springwise: Food and Cosmetic Innovations 'Tryvertised'

http://www.psfk.com/2011/10/springwise-food-cosmetic innovationsntryvertised.html#ixzz1biyohAgA  

October 24, 2011

Earlier this year we featured tryvertising store Sample Central which has opened in Japan and Hungary. Now extending retail-based tryvertising to food and cosmetics industries is Darling Delicious in the Netherlands, who provide a platform for companies to test their innovations with consumers before they launch on the market.

Researchers at Darling Delicious claim to search for the most luxurious, innovative, tasty and sustainably produced items, which they trial in two ways to a female market aged 25 to 55. In their trend store in Groningen, these trial products are tested in a real shop environment, and are available for purchase alongside Darling Delicious’ own range. Producers wishing to be stocked must provide a brief description of their company, the product, and the current phase of development. If they are selected by Darling Delicious, the producer will then receive access to all the consumer feedback on their product. Meanwhile, a “GooddieBox” containing new products is also sent to 200 carefully selected international recipients, at least four times a year. Producers can submit five questions to gain understanding of customers’ perception of their product, and after the trial period, Darling Delicious will help businesses analyze feedback to bring the final product to shelves.

According to the Darling Delicious website, 90 percent of new products disappear from shelves soon after their introduction. Gaining customer responses to everything from ingredients and recipes through to packaging style could provide the key to a longer shelf-life. One for luxury food and cosmetic innovators to get involved with?

Mintel - Beauty Retailing 2011: Strengths and Weaknesses

Strengths

Loyalty cards – our discussion group research highlights just how popular loyalty cards are with consumers in this market. Boots and Tesco have both ramped up the rewards on their programmes and Boots also opened its scheme to online retailers in 2010 (see profile). Other players have launched schemes more recently including Debenhams (Beauty Club card) in 2009 and Space NK in 2010. Meanwhile Superdrug is about to do the same in Spring 2011 and is particularly well placed in that it can leverage the expertise of parent company AS Watson which has around 28 million customers in various loyalty schemes around the world.

Product innovation – prevalence of global manufacturers with large R&D budgets secures a constant flow of innovation and renewal in the market. Beauty is often at the forefront of latest thinking and development in areas like science and technology, provenance and sustainability, organics, packaging, and now we are seeing blurring lines between beauty and food too.

Own brands – the skincare and cosmetics market also features many popular and often good value own brands, most particularly from Boots (eg No 7, 17, Botanics, Soltan) but also from Superdrug, The Body Shop, Neal’s Yard etc. Data from Mintel’s GNPD suggest that there was a substantial development in private label products in 2010 as well as new ‘economy’ products both of which were reacting to consumers’ increasingly price-driven choices (see Weaknesses below).

E-commerce – beauty products have been slower to take off online than many categories, but are now starting to grow fast from a low base. This market lends itself well to online purchasing as the products are small and easy to distribute to individual homes, and high margin premium lines allow the more upmarket retailers to build in free delivery to business models too. Moreover strong branding makes for easy recognition and price comparisons. These characteristics should also work well in the context of m- and f-commerce.

Luxury brands come on board - for a long time luxury stakeholders suggested that the price-led footprint of the internet coupled with the depersonalising of the experience made the web an inappropriate channel to market. But that is now changing fast as these brands recognise the importance of responding to consumer needs and expectations, and also appreciate that the combination of a trusted website and the busy lifestyle of their patrons adds up to significant sales potential. Perhaps one of the more notable achievements here is the presence of the Chanel brand at Boots.com.

Affordable treats – at the prestige end of the market beauty can still be an affordable treat, much more so than garments, leather goods or jewellery, which in these hard times many consumers have cut out altogether.

Non-discretionary core – to an extent core beauty products are deemed to be an essential purchase for many women and are quite habitual (see Internal Market Environment tracker research comments). So even though we expect 2011 to be a much tougher year for retailers this characteristic certainly provides an important measure of protection.

The Enthusiasts – our consumer target groups show that although the most enthusiastic beauty shoppers account for just one in ten adults they draw from a wide cross spectrum of by age and affluence.

Weaknesses

The Indifferent – however while 11% of adults are beauty ‘enthusiasts’, a massive 48% are really quite indifferent to beauty/grooming goods according to our consumer research. The bias here is to men and older shoppers and, although the average spend in both demographics is likely to be on the low side, the sheer scale of this target group represents a major weakness in the market but arguably also leaves a lot ‘up for grabs’.

Ageing population – given the relative apathy of older age groups, the ageing population also represent a weakness but again an opportunity too.

Intense competition – the deals/special offer culture has become deeply entrenched in beauty with Boots now blazing the trail because of its influence and sheer scale in the market.

Price-driven choices – but findings from our discussion group and omnibus survey show this is changing the way consumers value beauty products and, for very many, purchasing decisions are based largely on price rather than for example added value qualities, ingredients, claims, recommendation, provenance or efficacy.

E-commerce – importance of colour, tones, texture, scents etc presents some major albeit not insurmountable challenges to online retailers.

Squeezed disposable income – after a recovery in beauty sales in 2010 the more discretionary end of the market could suffer again in 2011 as consumer incomes are squeezed by higher inflation and wage freezes. On the other hand John Lewis reports that its middle class shoppers currently remain relatively unharmed by the austerity measures so this provides a glimmer of hope for retailers that can get their selection, prices, service and ambience right.

For more details of brand specific innovation, new launches and trends, clients should also refer to Mintel Beauty Innovation and GNPD.