Birchbox Assists in Entry to the US Beauty Market

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http://www.usnews.com/opinion/economic-intelligence/2014/10/23/rituals-beauty-products-find-success-in-the-fashion-market

One of the fastest-growing European beauty brands, Rituals Home and Body Cosmetics, founded in 2000, has launched its first two US boutiques this year in Manhattan. The Dutch company, now comprised of over 300 international stores and 450 shop-in-shops, has additionally solidified its US presence by rolling out in 18 Barneys New York stores. Its award-winning concept incorporates six core collections, which encompass beauty and grooming products for both personal and home care.

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Their targeted consumer is one who can appreciate the sophistication, and the approachable luxury of the brand. Their strategy to break into the US market began with appealing to influencers in the entertainment industry through gift bags at all major awards shows, such as the Golden Globes and the Grammys.
Other marketing strategies that have proved successful include brand partnerships with influential beauty sampling companies. The main firms, Birchbox and Glossybox, feature monthly gift boxes filled with sample sized versions of products, for a small fee to subscribers. Subscribers can then buy the full sized versions directly off of their websites. These models have proved to be the path of least resistance for new beauty brands looking to gain market share and brand awareness quickly. Ritual’s marketing strategy is focused on allowing consumers to experience the products firsthand, allowing them to develop their very own “rituals.” This strategy allows the consumer to incorporate the brand into their everyday life practices.

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Ritual is also following trends in the market, paying close attention to the increased interest in men’s grooming products. To stay on trend, they have launched a streamlined men’s collection, which has already proven successful. So what is next for this quick moving brand?! Targeting consumers in high-end department stores and through e-commerce all over the US, but most specifically on the West Coast. Also, a launch to appeal to ingredient conscious consumers through a mineral makeup collection is set for this November/December. Just in time to make it into holiday stockings!

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Seafood Expansion

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http://www.undercurrentnews.com/2014/10/13/fandicosta-rolls-out-new-brand-for-international-retail-expansion/

Fandicosta, a Spanish seafood processor is now attempting to branch out internationally. The company is currently one of the largest seafood companies in the country. They intend on expanding to other European supermarkets to start with including: Portugal, Italy, and France. Their seafood comes in a variety of packaging, hoping that potential grocers will have room for some if not all of Fandicosta products, if not all. They sell their food in bags, boxes, skin-pack, second-skin, and vacuum-packed. Future locations Fandicosta is looking to branch out to include: Germany, UK, France and the Netherlands.

 

An interesting market scheme that Fandicosta uses is pricing their items at round numbered prices. Instead of saying $3.25 they would price their food at $3.00. The company feels that customers are very conscious of every last cent they use and having a round number allows them to feel like they are having to pay any small bit extra. This change in pricing came about in leu of the economic downturn.

New pricing theories are showing that with the turn around of the economy and with new ways to make paying for things easier and more comparable by using resources on the internet gives consumers more control to  pay what they want. This is also seen with giving tips and the slogan to “round it up.” Using round numbers is becoming much more popular and therefor customers are beginning to gravitate to clean easy numbers without the added cents.

Fandicosta is already inventing new ways to expand their product lines. They have opened a new factory specifically for making pre-cooked seafood meals. The company is continuing to grow and be successful with a 14% increase in revenue since last year.

 

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Surviving the Retail Store Apocalypse

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http://www.forbes.com/sites/mckinsey/2012/05/22/seven-strategies-to-beat-the-retail-store-apocalypse/

Just the other day I was stuck in traffic on my way home from work, and decided to stop at the mall to wait it out. Upon entry, I realized that it was the first time I had stepped into a mall in at least a full year. Apparently, I was not the only one who switched almost exclusively to online shopping, as most of the mall was empty. As I began my research into this sudden shift, I discovered that the US is not the only country that has embraced the mass offerings of online retail over the traditional brick and mortar shopping experience.
Why is it that most have now shunned brick and mortar for online retailing? Is there any way for stores to maintain with the surge of e-commerce and discount retail sites, (generally offering comparable goods at considerable discounts)?

 

Empty Mall in Rhode Island
Empty Mall in Rhode Island

 

McKinsey recently detailed marketing strategies to excel at multichannel sales, skills they believe global retailers must maintain to stay afloat:
1. “Be the Authority” – By representing the best of a given product area, a retailer can subtly take a consumers side and be seen as a consumer advocate. Providing expert reviews and recommendations across all channels, including highly trained sales staff and rich engaging online content, all help increase brand loyalty.
2. “Use that Data” – With the increasing availability of data, marketers can target micro-segments in individual consumers’ patterns of purchase behavior. This enables a stronger relationship with customers, and allows retailers to cater to specific needs, utilizing limited retail space to the best of its ability.
3. “Re-Imagine the Retail Store” – Retailers must re-conceptualize the role played by their stores, turning them into more of a service hub integral to easing common online shopping issues. Clean lines, eye catching store fronts, and a limited product selection are also key to increased retail traffic.

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Apple store, Fifth Ave., NY

4. “Make it Personal” – The personal touch that is lost through e-commerce can be regained through offers such as personal shoppers across multiple channels. Neiman Marcus is currently looking to enhance their service legacy with an app that IDs customers entering the store and prompts staff to engage based on purchase history.
5. “Partner Up” – Cross retailer loyalty programs, could help create a multi-category loyalty experience, such as what Amazon has done with their Prime service.
6. “Be Unique” – To break the commodity perception, international retailers must develop unique offerings. Exclusive lines of merchandise, particularly with celebrity partnerships, have proven to be fruitful again and again.

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7. “Be First” – International retailers should focus on emerging markets where their competitors don’t have a foothold. They recommend China, India and even Africa in particular because of the rapid growing middle class, and wide access to technology.
Multichannel retailers need to focus first on nailing the digital shopping experience, as modern day consumers expect such. However, the ability to additionally turn physical stores into profit centers will prove a brand’s prosperity, at least for the time being.

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Marketing to Travelers Around the World

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http://www.marketingmag.com.au/blogs/making-the-most-of-travel-retail-57089/#.VCzBBSldWwA

When it comes to retail marketing, there are only three main areas that people most often think of: domestic, international, and online. However, an area that seems to be a strong niche for interesting products as well as necessity products is travel retail. Travel retail is a very specified area as, in most cases, it only allows marketers a short amount of time to catch the customer’s eye. Customers are on the go, coming or going to their next destination and often don’t have time to look into complex ad campaigns.

Travel retail, specifically in airports, has taken the route of attracting customers with simple and bold marketing tactics. Brand names are largely displayed in a highly visible way, to be seen from many angles and distances. Another way to attract on-the-go travelers is to use stimulating or exciting graphics that create thought and interest. These cause shoppers to want to learn more about the brand and explore what those images are representing.

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Retail in general is a sector that is rapidly changing and evolving. Travel retail is therefore an even trickier market to conquer as it is also highly specialized without much control over the customers they are presented with. Some will be coming home or from the location of the airport, while others are traveling from all over the world.

Airports are structured in a way that promotes easy flow of people. There is a constant movement of passengers arriving and departing. This allows for a high volume of potential impressions that can be made daily from just one location. The retail environment in airports is a compact one and sometimes stores are simply small kiosks. This is much different environment than most retailers are used to. Everything displayed must count, as space is limited.

Being a fast paced environment, travelers are in a different mindset. Therefore, their shopping habits will have altered. While some will be in the mindset of getting to their destination with limited viewing time, others will have plenty of time and patience to delve into a whole line of products. Another challenge to marketing retail in places such as airports are the varying backgrounds of the passengers themselves. Instead of having a certain “type” of audience that is constant, travelers can come from all over the world and view advertisements differently. Travel retail is at the height of innovation and is typically stretching the limits of what type of products they have to offer.

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Once Darling of Retail Sector Sounds Wake-up Call

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http://www.bloomberg.com/news/2014-09-23/the-rise-and-fall-of-u-k-grocer-tesco-that-owned-the-world-.html

Tesco, the large UK based grocery retailer, disclosed 9/22/14 that it had overstated it’s expected half year profit by upwards of $400 million.  With that statement four senior executives have been suspended, and a blame game begins…

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The global marketing strategy that Tesco employed 20 years ago, in a push to take it’s stores overseas through a mix of clever marketing and loyalty programs, “stood out in the corporate landscape as a fast, dynamic, innovative and market-leading company,” said Robert Gregory, global research director at Planet Retail in London.  The timing was also key, says David Arnott, principal teaching fellow in marketing & e-business at Warwick Business School, “there had been a good period of growth and people in general were happy. Tesco knew how to exploit that with clever marketing.”

However, with a constantly evolving global environment, no one can afford to remain stagnant in their marketing strategies.  Their venture into the US was considered to be misguided by then CEO Terry Leahy, and they failed to react to changes  both within consumer behaviors, and to the addition of cheaper competitors.

Enter – Phillipe Clarke in 2011, contending to the fallout of the global expansion.  Clarke closed US and Japan based stores, and focused on revamping and dropping prices at the UK stores, in an attempt to take back market share from lower priced German chains Aldi and Lidl.

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However, Tesco is said to be losing at the higher end as well, to retailers such as Waitrose and Marks & Spencer, due to extreme cost cutting.  The stores looked barren and customer service dropped, which dramatically changed consumer perception.  Clarke, recognizing cost cutting had become too extreme, put together a team spending over a billion pounds to remake stores, add products and activity centers, and focus on technology products.

A man walks past the London Stock Exchange in the City of London

However, the extra spending did nothing to help sales, and Clarke is now being replaced by Dave Lewis.  “There was certainly hubris on the part of the last management team, when it turned its focus away from being a food retailer and wanting to become Amazon,”  said Bruno Monteyne, a former Tesco executive who is now an analyst at Sanford C. Bernstein. Tesco’s share price on the London Stock Exchange, down 12% at the end of Monday’s trading day following the profit announcement, has fallen over 40% in the past year.

Lewis, starting a month early and bringing in Deloitte to streamline the transition, is intent on bringing the once titan of British corporate success back to solid footing.  Analyst Neil Saunders agrees, though adds “it will take time.”  With plummeting stock rates and attacks on both sides of the retail sector, the main question is, how much time does Tesco have?

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