Focus Cosmetic and Fragrance by jeff Clark

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The official publication of the Efficient Program Planning Sessions (EPPS)

COSMETICS AND FRAGRANCE • JULY 2006 IN THIS ISSUE Volume 2, Issue 15 Published by: ECRM, Inc. CEO Charles C. Bowlus Chief Financial Officer Mitchell Bowlus Editor, HBC/Pharmacy Melanie Klag Editor, Grocery/GM Nikki Lee Advertising Sales Manager Chris Killeen Graphic Designer Pamela Korzeniowski Market Research Min Bamfield Doug Del Zotto Intern Nicola Wilhelm Graphic Design Clark Design

Trends in the Fragrance Market Being a Category Captain Giving Women What they Want Quality Beauty Products in Beautiful Packaging

Hollywood Sells: Celebs as Branding A Secret Market – Pedicure Products Here's Looking at Hue! Taking Over – Men's Fragrances Top the Sales Chart in the Fragrance Market

13 14 17 18

Big Eyelashes & Smoky Eyes = Big Success for Color Cosmetics Reaching U.S. Hispanics through Online Marketing Fashion Jewelry in Drugstore Chains

20 22 23

TRIVIA TIDBITS • Americans spend more than $5 billion a year on cosmetics, toiletries, beauty parlors and barbershops. • Up until the late 1800s, virtually all fragrances were made from raw materials and the use of fragrance was primarily for religious, medicinal and luxury purposes.

ECRM Focus 31200 Carter Street Solon, OH 44139 www.ECRM-Online.com Phone (440) 498-0500 Fax (440) 498-0900 email to the editor: mklag@ecrm-epps.com

• Presently, 80-90% of the materials used in modern fragrances are synthetic.

Comments? Feel free to contact Melanie Klag at any of the numbers noted above.

• Women can use up to 20 different products as part of their daily routine.

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The Makeup Market Continues to Thrive

• There are both psychological and physical aspects involved in odor detection and interpretation. Odor interpretation is often tied to past experiences and odor is a powerful stimulus for memory.

• It has been estimated that as much as 50% of the cost of a bottle of perfume can be accounted for by packaging and advertising.

ECRM Focus • Volume 2, Issue 15

• Beauty aids reached a peak in imperial Rome – especially chalk for the face and a rouge called focus – and ladies required the services of slaves adept in their use. • Reaching its height in 1760, the use of cosmetics virtually disappeared with the advent of the French Revolution. • In the United States, cosmetics intended for interstate commerce are controlled under the federal Food, Drug and Cosmetic Act of 1938. • With the exception of one class of hair dyes, all color additives for cosmetics must be specifically pre-approved for use by the Food and Drug Administration. • Studies have proven that certain fragrances can reduce anxiety, improve sleep quality and better the mood of menopausal women. Sources: www.corsinet.com; www.fpinva.org; www.wen.org; www.education.yahoo.com; www.ctfa.org.

ECRM Focus, the official publication of the Efficient Program Planning Sessions (EPPS), is the definitive category information source for buyers and sellers in the consumer packaged goods industry. The purpose of ECRM Focus is to develop the understanding of categories. The magazine contains category-specific articles including category overviews of performance results, merchandising tactics, alternative strategies, growth trends and drivers, and new technologies. ECRM Focus also provides sellers with a forum to showcase their products and/or services in the Marketing Initiatives section of the magazine. Visit www.ECRM-Online.com to view current and previous issues of ECRM Focus.

DEPARTMENTS 10 Best Practices in Implementing Digital Signage & In-Store Media The 2006 Nail Care Business – It's a Natural Thing Bronzers & Concealers: Today’s Beauty Basics

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BUTKUS & BOEY SAY ... Dogs, by nature, are curious creatures and their adventures can usually lead to fun memories. On occasion, though, a dog can encounter an animal whose memory you and your pet would rather forget. A skunk’s spray is usually aimed at an animal’s face. Owners should check their dog’s eyes, nose and mouth for irritation and inflammation. If inhaled, the spray could additionally affect the pet’s throat and lungs. In most cases, flushing the eyes and affected areas with water should eliminate the irritation. If redness persists and the pet continues to rub at his or her face, a veterinarian should be contacted. A veterinarian can prescribe a soothing ointment if necessary. After tending to the physical needs of your pet, the next step would be to take care of the smell. The traditional tomato juice bath can help but it is recommended that you bathe your pet using a regular dog shampoo first. Another home remedy combines a mixture of dishwashing liquid, baking soda and hydrogen peroxide. After either bath, be sure to rinse your pet thoroughly with water. Most pet stores and veterinarian offices sell shampoos and washes made specifically for skunk sprays. These will usually work better than any home remedy. In the worst-case scenario, you may need to trim long-haired dogs, if the smell persists.

From the Editor Sales for cosmetics and fragrances have both been on an upswing lately as color cosmetics grew 3% and fragrances had a 2% sales boost in 2005. Eye makeup and bronzers helped catapult sales for cosmetics, while it was men’s premium fragrances that led the way for fragrances. Makeup is expected to continue to grow in the upcoming years as the number of females aged 11 and above (the prime makeup-wearing age group) is expected to grow to 173 million by 2010. Along with their increase in the population, teen buying power is also projected to increase to $243 billion dollars by 2007. But even beyond the up-and-coming teens, the baby boomers are also on the rise, which means goods things are to come for the antiaging segment of the cosmetics category. Baby boomers are one of the hottest demographics across all consumer packaged goods categories these days because of their high purchasing power, which is why more advertising and marketing is being targeted specifically to them. Also within the past couple of years, men have become a targeted demographic in all health and beauty care categories, and fragrances have managed to capture their interest, especially in the teen segment (with young men accounting for 45% of all body spray purchases). However, fragrances in general have hit an impasse with more and more scented body washes, lotions and spray deodorants taking consumers away from the fragrance aisle and into the personal care aisle. Therefore, the challenge will be how to lure the customers back and thus far, the answer seems to lie with premium and celebrity fragrances. In this issue of ECRM Focus, look for recent sales data, new trends and new insights into these categories. Please feel free to contact me if you are interested in contributing to any future issues of ECRM Focus or if you have any questions or comments.

Source: www.healthypet.com.

Volume 2, Issue 15 • ECRM Focus

The Makeup Market Continues to Thrive Excerpt from Makeup – U.S., February 2006, Mintel International Group

ith 90% of women, teens and tweens saying that they use makeup and the number of females aged 11 and above expected to grow from 161.2 million to 173.4 million from 2000 to 2010, population growth alone looks likely to boost makeup sales in the coming years. Growth is particularly strong among women between the ages of 45 and 64 as women in these age groups tend to put a premium on maintaining their youthful appearance. At the same time, the number of Hispanic and black females is projected to show brisk growth from 2000 to 2010. The number of black females aged 10 and above is expected to jump by nearly 18%, while the number of Hispanic females aged 10 and older is predicted to climb by more than 30%. Major manufacturers as well as niche players are doing more to court these consumers by developing makeup products in a broader range of shades, as well as signing up a wide range of spokeswomen – including celebrities such as Halle Berry and Queen Latifah. Sales of face, skin and eye makeup increased 23% between 2000 and 2005, or 9% in constant 2005 prices. The makeup market at food, drug and mass (FDM) outlets and department stores reached an estimated $6 billion in sales. In 2005, some 47% of makeup sales took place through non-FDM channels, primarily department store and specialty makeup boutiques. Makeup sold through these channels commands a significantly higher price than products sold through FDM channels and more non-traditional outlets keep adding makeup to their product roster. Spas and salons, for example, which used to specialize in selling body, hair and nail care products, are now starting to sell makeup as well, especially as a tiein to “makeovers” offered in some of these formats. Home makeup purveyors and some Internet start-ups also claim a share of non-FDM sales. While a certain population of consumers leans towards the high prices offered by top-line and luxury makeup brands, the market is also being pressured by the “bargain basement” makeup being sold through dollar stores. Although sales for this channel cannot be tabulated, the growing strength of the dollar store as an outlet for health and beauty care (HBC) products, including makeup, is being noted by manufacturers and analysts alike. FDM sales (excluding Wal-Mart) accounted for about a third of total sales, with drugstores

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leading supermarkets and mass merchandisers in sales. Drugstores have taken a more aggressive approach to cosmetic sales with better selection, marketing strategies that capture their frequent shoppers and programs that are designed to appeal to a wide group of women (better lighting for sampling, wider ethnic variety, etc.).

Eye Makeup Outpaces Other Segments Eye makeup has posted the biggest growth of the makeup segments through FDM outlets, rising by nearly 7% in current price terms between 2002 and 2004. This has been fueled by a number of new mascara introductions that promise to do everything from increasing volume to make lashes longer to accentuating eyelash curves. There also has been a trend for women to put more emphasis on eye makeup, while playing down face and lip makeup. In addition, Mintel’s consumer research found that women are more likely to buy eye makeup through the FDM channel than other makeup products. Face makeup registered modest growth of 1.7% between 2002 and 2004, while lip makeup sales fell by nearly 1%. Lip makeup was particularly hard hit between 2003 and 2004, which may be attributed to the shift in demand from lipstick to lipgloss, as well as the popularity of long-lasting products. In addition, survey respondents

show more likelihood to buy these products, rather than eye makeup, at retail outlets such as department stores. However, even with that being said, lip makeup is still a mainstay in the market. The vast majority of women and teens surveyed say that they use makeup, with lipstick and lipgloss being the most popular products, used by more than 80% of those surveyed. For younger consumers, lipgloss is the product of choice, following the current trend for shiny-looking lips. In contrast, older women show a preference for lipstick. These older consumers are the ones who are most likely to adopt particular makeup preferences and stick to them. In their quest to maintain a youthful appearance and protect their skin, women between the ages of 35 and 54 say that they are most likely to seek out products containing sunscreen and anti-aging ingredients. Given the brisk growth projected for this age group, manufacturers of products catering to this group are likely to see sales climb.

Total FDM Sales (excluding Wal-Mart) of Makeup at Current and Constant Prices, 2000-2005 Year

Sales at current prices $ Million

2000 2001 2002 2003 2004 2005

Sales at constant 2005 prices*

Index% Change

5,090 5,370 5,719 5,839 5,973 6,242

100 106 112 115 117 123

5.5 6.5 2.1 2.3 4.5

$ Million 5,751 5,900 6,185 6,174 6,152 6,242

2.6 4.8 -0.2 -0.4 1.5

FDM (excluding Wal-Mart) Sales of Makeup – Segmented by Type, 2003 and 2005

$ Million

Change 2003-05 %

848 748 666

38.0 33.5 29.8

903 831 612

38.5 35.4 26.1

6.5 11.1 -8.1

2,232

100.0

2,346

100.0

5.1

Face makeup Eye makeup Lip makeup Total

Makeup manufacturers appear likely to continue to develop products for women who are maturing, as well as for those from diverse ethnic backgrounds. Mintel’s exclusive consumer research found that more than half of the women surveyed say that they choose products that contain sunscreen and anti-aging ingredients. Both prestige and mass market cosmetics are more likely to contain ingredients such as SPF, vitamins and botanicals. Meanwhile, many manufacturers are expanding their palette of color offerings to appeal to women from a wide range of ethnicities. Mintel forecasts the makeup market to grow sales by 6% at constant 2004 prices through 2009; however, the in the short-term, face makeup is predicted to decrease 4% at constant 2004 prices through 2006. Lip products are also predicted to decline some 7% at constant 2004 prices through 2006, while eye makeup sales will remain flat through 2006.

100 103 108 107 107 109

* Adjusted for inflation using the All Items CPI. Source: Based on Information Resources, Inc. InfoScan® Reviews Information/SPINS/Mintel.

2003

Future Growth for Anti-Aging Makeup

Index % Change

2005

Data may not equal totals due to rounding. Source: Based on Information Resources, Inc. InfoScan® Reviews Information/Mintel.

FDM (excluding Wal-Mart) Sales of Eye Makeup at Current and Constant Prices, 2000-2005 Year

Sales at current prices $ Million

2000 2001 2002 2003 2004 2005

673 681 717 748 762 831

Index % Change 100 101 107 111 113 123

1.2 5.3 4.3 1.9 9.1

Sales at constant 2005 prices* $ Million 760 748 775 791 785 831

Index % Change 100 98 102 104 103 109

-1.6 3.6 2.0 -0.8 5.9

* Adjusted for inflation using the All Items CPI. Source: Based on Information Resources, Inc. InfoScan® Reviews Information/SPINS/Mintel.

Long-Lasting Products American women are increasingly pressed for time and Mintel’s exclusive consumer research shows that the largest percentage of women surveyed, or 43%, spend five minutes or less on their makeup. Nearly half apply their makeup once and do not Volume 2, Issue 15 • ECRM Focus

touch it up over the course of the day. This is likely to be contributing to the sales increases of fast-growing products that offer long-lasting capabilities. If the popularity of such products continues to grow, it has the potential to affect sales. Lip color that lasts for hours without requiring touch ups means that it has to be reapplied less frequently. That, in turn, means that consumers will not use up their lipstick as quickly, leading to longer replacement cycles.

Emphasis on Ads Advertising is critical for new product introductions and many of the major manufacturers turn to celebrities to help promote their products and appeal to a wide range of shoppers. Television and magazine ads, as well as coupons in newspaper inserts are also crucial. And department stores still lure women to try new products through in-store samples and giveaways. When considering advertising for Hispanic consumers, manufacturers will need to keep in mind that the Hispanic market itself is quite diverse, with some preferring to speak Spanish, while others opt for English. Now, almost 70% of Hispanics are under the age of 35 and two-thirds of those were born in the United States, therefore advertising that appeals to one group of Hispanics may falter with another.

Increases to Continue in the Future Total U.S. sales of makeup are predicted to increase 26% at current prices and to increase 7% at constant prices from 2005 to 2010. By comparison, from 2000 to 2005, total U.S. sales of makeup increased by 23% at current prices and increased 9% at constant 2005 prices. U.S. FDM sales of face makeup are predicted to increase 5% at current prices but are expected to decrease 11% at constant prices from 2005 to 2010. By comparison, from 2000 to 2005, U.S. FDM sales of face makeup increased by 1% at current prices but decreased 10% at constant 2005 prices. U.S. FDM sales of eye makeup are predicted to increase 28% at current prices and to increase 9% at constant prices from 2005 to 2010. By comparison, from 2000 to 2005, U.S. FDM sales of eye makeup increased by 23% at current prices and increased 9% at constant 2005 prices. U.S. FDM sales of lip makeup are predicted to decrease 5% at current prices and to decrease 19% at constant prices from 2005 to 2010. By comparison, from 2000 to 2005, U.S. FDM sales of lip makeup increased by 2% at current prices but decreased 10% at constant 2005 prices.

FDM (excluding Wal-Mart) Sales of Face Makeup at Current and Constant Prices, 2000-2005 Year

2000 2001 2002 2003 2004 2005

Sales at current prices $ Million 891 866 874 848 885 903

Index 100 97 98 95 99 101

% Change -2.8 0.9 -3.0 4.4 2.0

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1,007 951 945 897 912 903

% Change

100 95 94 89 91 90

-5.5 -0.6 -5.1 1.7 -0.9

* Adjusted for inflation using the All Items CPI. Source: Based on Information Resources, Inc. InfoScan® Reviews Information/SPINS/Mintel.

FDM (excluding Wal-Mart) Sales of Lip Makeup at Current and Constant Prices, 2000-2005 Year

2000 2001 2002 2003 2004 2005

Sales at current prices $ Million

Index

% Change

601 645 699 666 629 612

100 107 116 111 105 102

7.3 8.4 -4.7 -5.6 -2.7

Sales at constant 2005 prices* $ Million Index 679 709 756 704 648 612

100 104 111 104 95 90

% Change 4.4 6.7 -6.8 -8.0 -5.5

* Adjusted for inflation using the All Items CPI. Source: Based on Information Resources, Inc. InfoScan® Reviews Information/Mintel.

Total U.S. Forecast Sales (FDM excluding Wal-Mart) of Makeup at Current and Constant Prices, 2005-2010 Year

2005 2006 2007 2008 2009 2010

Sales at current prices $ Million

Index

% Change

6,242 6,535 6,844 7,170 7,502 7,851

100 105 110 115 120 126

4.7 4.7 4.8 4.6 4.7

* Adjusted for inflation using the All Items CPI Source: Mintel.

Sales at constant 2005 prices* $ Million Index

Sales at constant 2005 prices* $ Million Index 6,242 6,339 6,432 6,523 6,601 6,681

100 102 103 105 106 107

% Change 1.5 1.5 1.4 1.2 1.2

Arminak

Volume 2, Issue 15 â&#x20AC;˘ ECRM Focus

Trends in the Fragrance Market By Nicola Wilhelm, ECRM

ragrance sales have followed the rise and fall of the personal care market. Marketing has taken on a central role with the ever-increasing emphasis on celebrity fragrances. The star appeal is being used to reach two demographics that were lost, but have recently been found, by the fragrance market: teen and tween girls and men.

Catching the Celebrity Craze Celebrity is the overwhelming trend in the fragrance market, replacing the designer and supermodel spokespeople of the past. America’s obsessive idolization of stars has practically taken over the advertising aspect of this category. From sports to television to music, marketers are tapping into the popularity of celebrity in any way they can. Some fragrances are marketed around not just a celebrity or athlete, but a certain television show or sporting event, such as a soap opera or car racing. Rather than narrowing the attraction to the following of a particular individual, these brands are targeting a wider spectrum of fans. Media exposure beyond the fragrance can result in additional marketing. Such partnerships can blur the lines of advertising, which, in the end, can only benefit retailers.

ECRM Focus • Volume 2, Issue 15

This provides an additional element of marketing by exploiting the idea of “star treatment.” Female consumers can pamper themselves with the same products that fashion icons are using. In the same way, marketers can appeal to men who idolize a certain sports star. Wearing their cologne can then draw a connection to the feeling a man gets when watching that particular athlete or team. A certain prestige comes in wearing a star’s scent, much like carrying a certain handbag or wearing a particular athlete’s jersey. Celebrities are taking on an active role by helping to create their scents, thus strengthening the personal connection with the consumer.

Targeting Teen/Tween Girls The teen buying power is expected to reach $190 billion this year and $243 billion by 2007, which has spurred the luxury fragrance industry to reconsider this underserved demographic. Those marketers who have chosen to go after the teen and tween market recognize that they are competing for dollars these girls have previously been spending on cosmetics and fashion. If fragrance wants to compete with cosmetics, it will need to continue to reach out through advertising. This age responds to

all media, including alternative forms of marketing such as text messaging and the Internet. Fragrance releases for women were traditionally introduced at department stores and then later brought to mass retailers or drugstores. As products are created for a younger generation of teen and tween girls, marketers are reconsidering the venues. If a teen is currently purchasing her cosmetics and beauty care products at a mass merchant or drugstore, the marketers are doing what they can to reach her where she is. Fragrances created by and for young girls are launching at mass outlets, sometimes exclusively. The allure of exclusivity is not lost on the younger generation, even if the store may lack prestige. The celebrity name is often all the prestige they need. Even those products that are released in department stores can be expected to shift into mass stores at a later date and sometimes at a lower cost. Prestige lines continue to cross over into the otherwise flat mass market and young female consumers are responding.

Marketing to Men While women have always been considered the primary fragrance consumer, the sluggish market

is varying its targeted demographics in order to ignite interest and spur sales. Fragrance manufacturers are doing so by not just looking to teen girls but are now looking to males to spice up sales in the category. As a whole, the men’s personal care segment has seen steady growth in the past few years. Men are no longer ashamed of their increasing interest in personal care products and their growing desire to care for their appearance. As a result, they desire more personalized in-store service in a less intimidating format. Retailers are responding by increasing the shelf and aisle space allotted for this segment. Branding is extremely important because while certain retailers are setting these products apart, others have yet to distinguish between the products. Men need to know where to look. If they are in search of a new fragrance or a particular brand that they became aware of through advertising, it is not enough unless their in-store experience provides them with an opportunity to browse the available selection. Manufacturers are still undecided as to whether male consumers prefer selection or simplicity. Certain brands are launching related products, such as aftershave or lotion, similar to the packaging trends in the female half of this

category. Other brands are focusing their attention solely on the fragrance. Only time will tell where the male preference will lie. As with any category, brand expansion is best supported by brand loyalty. Other fragrances have gone straight to the source by releasing their products in boutique-like shops that solely target teenage girls. It is possible that the recent growth in the male personal care category may actually detract from fragrance sales. While the emphasis on appearance and fashion should promote the sale of cologne, there may be a limit to how much men truly want when it comes to fragrance. If they are now using a body wash and aftershave lotion, both with strong scents, they may not feel the need to wear an additional fragrance, especially on a daily basis. Mass retailers have emerged as the preferred venue for men’s personal care. Similar to the teen and tween market, certain brands targeted for men have found instant success and this recognition is drawing more attention. Primarily, fragrance for men is targeted to those in their late teens to mid-30s. Trends have revealed that the older generation, which tends to be set in their ways, is resistant to this focus on personal appearance. The younger men are more than

making up for it because they are creating a trend that even young boys are already following. Boys, ages 9 to 16, represent over 22 million U.S. consumers and they are spending an estimated $50 to $100 on personal care products a year. While young boys are less likely to purchase fragrances, at least at the younger ages, they are building habits that will make them prime candidates for marketing in the future. The male fragrance market is not immune to the infiltration of celebrity presence. Rather than appeal to the pampering that a female star may promote, these products and their Hollywood spokesmen are rugged and sexy. Additionally, athletes provide marketers with a crucial opportunity to reach men that may not traditionally consider buying fragrance. If the obsession men have for a particular sports team or athlete can be tapped by the cologne industry, the prediction for total sales reaching $1.64 billion by 2009 will be only the start of this category’s success. Only time will determine the next great shift in the fragrance market. As retailers meet the demands of their star-struck consumers, they should consider the growing base of male and teen consumers, who just might determine their success in the coming year. Volume 2, Issue 15 • ECRM Focus

Being a Category Captain in 2006 and Beyond By Michael Forhez, Vice President, Marketing and Industry Relations, CAS Americas

hat does it mean to be a “category captain” today and what are the responsibilities for my company when or if we attain this status? Does it mean we get to determine who goes where on the shelf, who acquires the greatest overall linear footage or who obtains the most number of facings per SKU? Does this mean my company may determine what products are worthy of placement (my own included) when a new item is introduced or when that item should be de-listed if it fails to meet trial and repeat volume expectations? What about pricing and promotion, since total category ROI cannot be understood without these numbers? And, as the seasons change and those inevitable resets come up affecting all the brands, is it my responsibility alone to ensure that the new planograms are well conceived and executed? Last, how do my – indeed, how do all – brands affect the demand cycle based on the space they are allocated and can we link our work at the shelf with our efforts in the backroom to better manage the supply chain? The answers to these and a host of new and critical questions must be built upon sound and ever-evolving analytical capabilities for understanding a new and increasing range of available data. Such analysis should be aligned with the clear objective of maximizing category ROI – based on each retailer’s strategic intentions by category, department and the store as a whole – even as it aims to serve the needs of the consumer, which must always be its primary purpose lest we forget why we are in this business in the first place. If you really want to be a category captain, then, if you want to keep this job and if you want your work to truly add value to your company and mean something to your retail partners, you may want to read on, because the road is long, time consuming, laborious and, while it can ultimately be rewarding to your brands, it also requires a level of objectivity and commitment many manufacturers have found difficult to adhere to. As a point of view, I offer that today’s category captain needs a more comprehensive and reinvented process that while taking advantage of the traditional Eights Steps enumerated in the industry’s ECR Black Book, makes provision for new information, technology and thinking. Such a process would, by mutual agreement, ensure doing the right work right, and include among other things, what I call the “Four T’s” for

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Advanced Category Management, namely: Technique, Technology, Transparency and Trust. Taken together the Four T’s would make it possible for all the players, including the captain and his competition, the retailer and the consumer, to benefit. Technique speaks to the artful utilization of all the data available to us today. This includes everything from retailer frequent shopper data (sans personal detail), syndicated information, POS scan-data, third-party trend information, factory shipments and whatever else provides visibility into category dynamics. Technique, as every experienced category manager knows, involves almost equal parts analysis and creativity. Such a blending allows for taking risks to test various shelf constructs, adjacencies, cross-category and department positioning, etc., providing the opportunity for breakthroughs in retailing and manufacturer support. Technology, which has come a long way in 15 years, means going far beyond the planograms and decision support systems imagined in the ’90s. Collecting data, cleansing, sorting and normalizing it are just starting points and prerequisites in order to really take advantage of all of the latest technology at our disposal. The hardware and software available today make possible a level of sophisticated analysis only dreamed of when category management came into vogue back in the late ’80s. In today’s world, the sheer processing power of multi-CPU servers combined with the appropriate applications that enable complex business process, allow for efficient “what-if” testing and continuous, close to realtime monitoring, giving greater depth of insight and value to this work by providing more timely and concrete action items.. Transparency handles the fact that no category is static by nature. Whether driven by seasonal influences, by promotion programs

specifically designed to “spike” a brand’s volume, or by a combination of these and other factors, as category managers we need to prepare our partners – inside and outside our companies – to ensure that enough product is in the pipeline, that it arrives at the right store in the right quantity and, if it has been configured in some manner specific to a particular retailer, that is done so with all the specifications agreed upon. Transparency means that what happens on the shelf and the backroom are synchronized to avoid the “bullwhip” affect that continues to plague our industry through the persistent issue of out-of or overstocks. Trust, which we explore through our “collaborative” discussions every day, is the glue that holds it all together. Not a simple matter, it means sharing all available information and planning for mutual advantage. It means that, with very few exceptions, no manufacturer has complete control over the shelf but must consider what is on his flank as well. It means that the retailer sees that role as one of real partnership. It also means that a retailer sees the relationship broader than just between retailer and category captain. Input from other manufacturers operating within the category should be considered in a systematic fashion as well! Trust binds the parties and means putting skin in the game when the time comes for resource allocation in both constructing the category plan as well as seeing it through. In sum, while the work of category management has, and can continue, to rationalize an often unwieldy product assortment among competing manufacturers, it is time for everyone – supplier and retailer alike – to consider how a reimagined and more advanced process can serve the ultimate beneficiary of everyone’s efforts. More commonly, we know this beneficiary as the consumer.

Michael Forhez, vice president of marketing and industry relations for CAS Americas, has 20-plus years experience in advancing enterprise marketing software solutions for CPG companies and their retail partners. Mr. Forhez has extensive work experience with industry-leading companies such as Kraft and Unilever. He also sits on the Grocery Manufacturer Association’s (GMA) Associate Member Council and serves on the Board of Advisors for the Trade Promotion Management Association.

AD nu world

Giving Women What They Want-

      Article contributed by Pantina Cosmetics

ith so many beauty brands out there, how can one brand stand out and capture the attention of such a discerning customer? In 2005 alone, there were more than 100 new brands fighting for space on retailers’ floors and walls. Many have tried to morph into makeup artist brands, celebrity-endorsed brands and, of course, licensing brands. It is no surprise that beauty can produce a healthy margin and many companies are looking to set themselves apart. So where do you start? In a focus group conducted by an undisclosed research firm over the summer of 2005, four groups of 12 beauty-obsessed women (ages 18 to 35) were brought together to discuss their likes and dislikes. In today’s over-assorted beauty world, women are proving that packaging is king. They want to be able to pull out their lipstick in public and have everyone gaze over at the beautiful case. Many brands today are finally understanding that packaging is of the utmost importance. That is probably why many indie brands have taken front and center when it comes to packaging – women love the ability to have a product in their purse that pulls double duty as an accessory and stands apart from the competition. Women are savvy enough to know that they do not necessarily have to pay through the nose to get a beautiful, quality product. They know

ECRM Focus • Volume 2, Issue 15

they can go to a local drugstore and get a great lipgloss or eye shadow – except they still desire more for the packaging. Women were asked specifically about mass brands and they talked about how at times they were embarrassed to pull out a lipstick from their bag in public – they felt the product looked cheap and that companies skimp on the appearance even though the formulas are good. Women also tend to talk about their favorite products with their girlfriends and will have the tendency to make a purchase if the recommendation comes from a trusted source. The women that were in the focus group also talked about how they tend to value the opinions of beauty editor’s from top beauty and fashion magazines. Even now, women do not believe they should pay upwards of $20 for a lipstick or gloss just because of the packaging offered by other prestige brands at department stores. The groups also raved about multitasking products. Women have been multitasking for ages and now they expect their beauty products to pull double duty as well. These women told us that they are always pressed for time; I mean who has time to get ready anymore? Of course that does not mean that they go sans-makeup, but they do need the convenience of using a product that works just as hard as they do – like palettes that include lip color, blush, eye shadows and include an applicator. A shimmer powder that is encased with a brush for easy application,

portable and non-messy! The group agreed that they gravitate towards double-ended and unique products that have more than one purpose. It is no wonder that businesses everywhere are looking to accommodate the needs of today’s busy woman. From nail salon openings at airports for a quick manicure to the latest kitchen gadget that cuts time out of the cooking process – businesses are looking for ways to bring convenience to the consumer. Beauty companies are now starting to get it and the trend shows no signs of slowing down. So, what do women want in their beauty products? Well, based on what we heard from the focus groups, they are looking for quality formulas in sleek packaging that pulls double duty and doesn’t break the bank. Sound like too much? Not if you are one of today’s overachieving women. Investing in some research whether qualitative or quantitative is a great way to spend your money wisely. Go shopping and scout your customer, see what she is buying. Do your homework. Companies looking to enter the beauty industry, or even companies that are already in, should be mindful of what the needs of the enduser are. We can try and spin new concepts, create edgy advertising campaigns, but if at the end of the day you are not appealing to your demographic, you may as well toss your money out the window.

“Take your makeup cues from your favorite celebrity,” “How to get hot celebrity hairstyles,” “Beauty lines inspired by your favorite celebrities,” “Discover what the celebrities use.” These call-outs from magazine covers and inside editorial headlines make obvious the star-crazy state of affairs in which we live. If Miss Hollywood is wearing it, using it, driving it or drinking it, then it must be good – and the trend-conscious consumer must have it. In a world of increasing media clutter, the topical allure of the celebrity user helps a product stand out in the crowd. This is why companies are relying more and more on the power of public relations (PR) to create buzz for their brand by letting the world know every time they get their products into the hot hands of Hollywood. Celebrity product placement differs from celebrity endorsements, where there is pay for play and a high-profile person uses the product or service and endorses it in advertising. Remember the feelgood factor of seeing American’s favorite father, Bill Cosby, sharing Jell-O with the kids? Or looking at the “Everyman” mug of Joe DiMaggio as he pitched the Mr. Coffee Maker? In the days before the Internet, Reality TV and TIVO, these commercials and advertisements perhaps carried more weight and credibility. Today, consumers know lots of money is changing hands and they are tuning out. The average person is exposed to thousand of advertising messages a day. Public relations may be seen as more reliable because it uses third-party endorsements where other people are talking about your product. In advertising, you’re talking about yourself.

Celebrities Reign Over Retail When Her Majesty, Queen Charlotte of England expressed a preference for Josiah Wedgwood’s wares, he was dubbed “Potter to Her Majesty” and Wedgwood became, well, Wedgwood. Wedgwood parlayed this celebrity praise into pounds, selling his pottery to every commoner wanting to feel like royalty. This was in the 18th century. In the 20th century, Lindsay Lohan says “I won’t leave home without fake lashes” (InStyle, June 2006) and women rush the aisles of the local drugstore. An example of celebrity influence gone awry: In 1934, Clarke Gable turned out to be bare-chested beneath his dress shirt in the film “It Happened One Night.” Legend has it that sales of men’s undershirts immediately plummeted. So, how to pass along your product to that elusive star or starlet? And how to know they use it? And then, how to let everyone else know that they use it? It’s not brain surgery but it does require some creativity, ingenuity and most certainly, follow through.

Those With Everything, Get More They’re called “swag bags” and everyone wants in. At the burgeoning number of awards shows that happen every year, guests are showered with products – clothes, jewelry, cell phones, beauty

products, etc. It can cost money to participate and often you “audition” your product for acceptance into the bags with more prestige. The Oscar bag of 2006 had products with a value of over $100,000. There is also the growing phenomenon of the pre-party and something called “The Pampering Suite.” Here, celebs, wanna-be celebs and the celeb’s coterie are manicured, pedicured, massaged and made-up, all compliments of a company wanting to say their product was on the face, hands, feet or body of someone famous. Again, there is often a fee associated. Celebrity gifting has become a business within itself and some companies are developing departments that are focused solely on achieving successful celebrity placements.

How to Put Hollywood to Work The cost of gifting a celebrity, sending a press release and phoning the media is a fraction of what it would cost to launch a major ad campaign. This kind of grassroots PR is efficient and effective. Today, many magazines devote pages and pages to detailing the preferences of the stars. In every issue of InStyle magazine is a section called “Guilty Pleasures” in which celebrities reveal their favorite midnight snack or beauty binge or junk food. Witness, too, the many weeklies devoted to following Hollywood’s every move: People, US Weekly, InTouch Weekly, Life & Style, OK, Star, etc. Editors are eager to hear celeb scoop and it is as easy as picking up the phone or sending a pithy email to pique their interest. If a company’s product has been included in a swell gift bag and a list of stars received it, it is worth a phone call. Better yet, if there is a story associated with it (a manicurist used a certain color on a certain celeb for a specific event and the celeb “loved it!”) that is PR gold. The more detail the better. Consumers look to celebrities for style guidance. They emulate their look and do it by picking up the products stars are said to use. These bits of gossip translate into sales.

Only in Hollwood In the June 6, 2006 edition of the Los Angeles Times, there was a story about a boutique described by its owner as a “general store for the rich.” This store, Kitson, has developed a reputation as being a preferred shopping destination for many Hollywood celebrities, including Lindsay Lohan, Madonna and Reese Witherspoon. The owner has allegedly tipped off paparazzi every time a notable walks through his door and this has made the boutique, according to US Weekly “L.A.’s hippest hot spot.” Now, according to the LA Times article, the owner has become an investor in a new venture: Sunset Photo and News LLC, a paparazzi agency and the owner of another

Hollywood Sells: Celebs as Branding Tools By Anne Moratto, American International Industries

agency is quoted as saying “He is working all the angles.” Only in Hollywood.

And “Action!” Tapping into the connection between celebrity and sales may be just a box of product away. Contact hair and makeup artists who work on films and in television. Offer support and send off shampoos, lotions, makeup, tanning products, razors – anything and everything that might make its way into their kit. Initiate a relationship with agencies that represent stylists – they are “prepping” the personalities, telling them what to wear and ultimately the gatekeepers to what is and what will be on trend. In addition, look to work with up-and-coming fashion designers who have not yet crossed the celebrity threshold but are on the cutting edge. Hollywood with its ever-changing, fickle appetite is constantly searching for the next hottest look, style and icon to worship. New designers are hungry for publicity and recognition, and looking to link themselves up with the glitterati known as Young Hollywood. Learn the power of the celebrity and give a brand more than just 15 minutes of fame. Volume 2, Issue 15 • ECRM Focus

A Secret Market – Pedicure Products Article contributed by IMPA

present or an accessory of a bathroom decoration. Consumers search for foot files or pumice stones especially before or during the summer, after the time in which feet are in heavy boots that do not allow skin to breathe properly. So manicure sets should meet the expectations concerning efficiency at that time: immediate youth effect. That means the result of healthy, beautiful skin and nails, free from any disorders, bacteria and dirt.

ody and face care cosmetics have been the most popular products in the cosmetics category. Or at the very least, they are the most accessible ones thanks to the efficient distributions actions and the advertising campaigns of their biggest producers. Everybody knows the names of the biggest brands that provide skin treatment items. And although a majority of customers have already chosen their favorite cosmetics, there is still a huge number of those who are still searching for the innovations, especially for them. What they are looking for are innovations and ideas that will meet their expectations concerning the whole body treatment and the beauty effect – in one product and at one time.

Where Do Consumers Search for the Perfect Pedicure Product?

What Do Consumers Choose From? Why Foot Care Treatment? Among the whole range of body care products, pedicure items have begun to be more and more popular. It does not concern only the “color effect makers” such as nail polish, nail decoration jewelry etc. Customers search for the best way to treat their hands and feet in the best, the healthiest and the most hygienic way. After all: • An average person makes from 8,000 to 10,000 steps per day. • Feet are the mirror to your health state. Problems with feet can be the first signal of health disorders like diabetes, for example. • Lack of proper feet treatment is the cause of problems with them. • The feet‘s skin is 50 times thicker than the skin of the rest of body. • Feet disorders concern women four times more than men (high heels) • An average woman spends from five to 10 hours per day on their feet.

ECRM Focus • Volume 2, Issue 15

There is a wide range of products to choose from. Pedicure products include creams, balms, salts, nail polish and nail removers, hardeners, strengtheners, whiteners, etc. But every beauty expert would advise to keep feet in a good shape first, by: • Washing feet in warm water every day. • Observing any changes on the feet’s skin. Check for cuts, sores, blisters, redness, calluses, etc. Do not ignore them. • Putting lotion on the dry skin of your feet. It is important not to put lotion between your toes. • Getting rid of ugly hard calluses. Nail polish is a waste of money if feet do not receive the proper treatment. So there is also a wide range of pedicure sets and instruments, brushes, files, foot files and pumice to keep feet healthy.

What Do Customers Require? The cheaper and the more efficient – the better. Pedicure items should be small and light. It is more interesting if it is colorful and can be treated as a

It seems that the perfect pedicure is possible thanks only to the spa treatment in a professional beauty salon where the experts will take care of body. But that is not true! For example, perfect feet treatment can be done in the home spa – by using the right cosmetics – the ones that are already available on the market. After all, the beauty experts use them as well. How to provide your customers with such products? Contact the producers. The same ones who provide beauty salons because it is the best guarantee of the checked quality that the customer is after and that is quality checked by the professionals. As far as the transport convenience is concerned, it is worth to mention the European Union-based companies. What is more, especially that the new member countries seem to offer products of quality as good (or sometimes even better) as their Western European competitors. Those who show their products during the international trade fairs are the best examples of it.

The Feet Treat Secret Although there is a wide range of the pedicure products, the customers search for those of the best quality at the most reasonable price. Their purpose in any pedicure treatment is the immediate youth effect. Once it is found, it will be kept by the user as the beauty feet secret. This will be the distributor’s success secret as well.

ECRM-Online

www.

.com

ECRM-Online, used in conjunction with Efficient Program Planning Sessions (EPPS), can help buyers and sellers increase sales and profitability, while significantly reducing supply chain expense and time.

Marketing Activity is a customized, secure area of the website which allows retailers and manufacturers to review EPPS product selections and meeting notes.

Efficient Merchandising System (EMS) helps retailers develop and present merchandising programs to stores, which can assist with the processing of orders by store or chain.

Product Library allows manufacturers to view and edit product information while retailers can search the database for product specifications and high resolution color photos.

ECRM Focus Magazine Online

is ECRMâ&#x20AC;&#x2122;s category-specific publication focused on developing the understanding of categories, their growth engines and trends.

New/Promotional Items posted by manufacturers are available Diversity Portal for retailers to review throughout the year.

allows retailers to search minority- or womenowned businesses, complete with company profiles and contact information.

Collaborative Planning allows manufacturers to suggest ad blocks and programs to retail partners. In turn, retailers can use manufacturersâ&#x20AC;&#x2122; suggestions to plan advertising, new item distribution and promotions.

Broker Portal outlines ECRMâ&#x20AC;&#x2122;s broker policy, including contact information of brokers by region or category.

The International Business Resources and Help Site is for

Category Development is the definitive source of category information, including category reviews, sales and ad trends, demographics, and more.

international trade practices. Find U.S. government documents, banking and credit information, labeling and packaging specifications, and regulatory requirements.

Ad Comparisons is a comprehensive database of circular advertising and FSIs from more than 120 retail chains in 65 markets across the United States and Canada.

Get Started Today ... Visit www.ECRM-Online.com.

ECRM Career Center

is a resource for both job seekers and employers, connecting the most progressive companies with qualified career-minded individuals.

Store Brand Portal allows retailers to search private label manufacturers by category. Find web profiles, contact information and customized address books which can be used to request bids from manufacturers.

Contact Cathy Artino, Client Services Manager, 440.498.0500, cartino@ecrm-epps.com.

Focus Puzzler

The answers to this puzzle can be found throughout this issue or visit www.ECRM-Online.com/ECRM_Focus.

Across

Down

1. Some tinted moisturizers combine these three steps in one: moisturizer, ___ and foundation.

2. The need for ingredients, such as enzymes, amino acids and peptides, will be propelled by the growth of ___ skin care products and high value additives.

8. ___ ___ posted the largest growth of the makeup segments through FDM outlets. 11. Color-___ is widely used by professional makeup artists to disguise more visible imperfections such as under-eye circles, blemishes, scars and birthmarks.

3. ___ is competing for teen money previously spent on cosmetics and fashion. 4. The driving force of jewelry sales is ___.

12. ___ color-correction cosmetics hide bluish skin discolorations such as dark under-eye circles and bruises.

5. Bronzing powder offers a natural tan glow without the damaging effects of the sun - primarily premature ___, fine lines and the risk of skin cancer.

14. Due, in part, to magazines featuring false versions and volumizing mascara, last year’s fashion emphasized thick ___.

6. The four T’s of advanced category management are Technique, ___, Transparency and Trust.

15. When cosmetics double as accessories, brands recognize that ___ is what allows them to stand apart from the competition.

7. Celebrity product placement differs from celebrity ___. (hint: plural word)

16. Presentation, ___ and service of your jewelry display are imperative to the salability.

9. The preference for natural products will drive the demand for active and ___-derived ingredients.

17. ___ retailers are the preferred venue for men’s personal care products.

10. Pampering suites and ___ ___ allow manufacturers to introduce celebrities to new products.

18. In 2005 alone, there were more than a ___ new brands fighting for space on retailers’ floors and walls. 19. Of the women and teens surveyed that use makeup, ___ was the most popular product.

ECRM Focus • Volume 2, Issue 15

12. When purchasing pedicure products, consumers are in search of the “___ effect.” 13. The ___ category is the fastest-growing segment in color cosmetics.

Here’s Looking at Hue! Article contributed by L’Oréal Paris

hen it comes to color cosmetics, some women fly under the radar, choosing to go natural, often lacking the confidence to embrace real color. On the flipside, many women want their makeup to be as bold and dynamic as their inner spirit. This season, it’s the color lover that wins with new cosmetics in bold shades and textures for creating unprecedented, high intensity cosmetic statements. From eyes to lips, color is everywhere and the bolder the better. On fashion runways and the pages of the hippest magazines, everyone is celebrating the fun and excitement of color cosmetics, showcasing dramatic eyes and bold lips worn like the hottest fashion accessories. So women are now putting down the red pumps and putting on their red lips! The biggest brands in beauty are introducing complete new color collections at mass that give more options to women who love color. Featuring new technology with stronger color payoff, color is going where it’s never gone before. Now women can be their own makeup artists and experiment with shades and textures that can take any makeup look from blah to brilliant. So who should jump on the color trend? Every woman who wants to make a style statement. Especially exciting this season is that this color trend is truly for every woman. No matter your customer’s complexion or ethnicity, cosmetics with intense pigments that dazzle on even the darkest skin tones can be found. Now, women with darker complexions get more color impact with shades that will really stand out and complement ethnic skin tones. Many women think that they cannot pull color off. When it comes to color cosmetics, it is all about confidence – in wearing it and in applying it. But fear not! There’s an inner makeup artist in all of us – it just takes imagination and the right tools. Below are some tips to help your customers find their inner maquillage Matisse.

The Eyes The eyes aren’t just a window to the soul, they’re the ticket to the ultimate color statement and provide the most opportunity for the color lover. Start by thinking of your eyelids as a blank artist’s canvas. They’re just waiting to be painted with shadow. The on-trend shadows are high pigment colors from cool blues to bright pinks to dynamic greens. These shadows come in different textures – matte and shimmer – but the soft sparkle of shimmer shadow pops brilliantly on all skin tones and really softens the look. Cosmetic companies are making it easier for the consumer with duos and quads of complementary shades, taking the guesswork out of color selection. Black mascara, the most popular option of all the lash definers, is the best frame for a madeup eye. And now, new formulas offering superior technology are available that allow for the darkest shade of black possible. From blackest black to carbon black, it’s never been blacker! When it comes to mascara, there are a multitude of formula options. First, the customer needs to identify her lash needs – volumizing, lengthening, curling or waterproof. Want it all? Choose a multifunction formula, but mascara is the absolute finishing touch to any eye look and

makes a real difference when it comes to accentuating color.

The Lips These days, it’s all about lips – the fuller and more luscious the better – and there’s no better way to draw attention to them than with colors that accentuate shape or add volume. Juicy lipglosses with loads of shine and a splash of color are a foolproof way to complete a dynamic color look. If your customer is a lipstick lover, make sure to help her choose one that is ultra-moisturizing so that it will look lush and won’t settle into fine lines. Women need to be aware to wear shades rich in texture that complement their shadow selection.

The Face Advances in makeup technology are certainly not limited to color cosmetics. Foundation formulas continue to improve making it possible for women of any complexion to conceal imperfections and even skin tone without looking “made up.” Foundations with sheer, blendable formulas go on smoothly and won’t settle into fine lines or

wrinkles. The wearability is unlike ever before. For women with darker complexions, look for foundations that use violet perles to illuminate darker skin, not mask it. Women with a dynamic color look, should keep blush soft and natural. Be sure to allow customer’s to find a shade that’s low shimmer and that mimics the flush of a natural cheek. And while blush may take a backseat in the color story, bronzers and illuminators are center stage for their ability to give any complexion a sunkissed glow. Bronzing powders for the face create warmth and depth to subtly accentuate a rich color palette without overdoing it. Shimmer highlighters along cheek, brow and collar bones can add subtle accents for added allure. Radiant, glowing skin is the perfect way to show off a new, high intensity color look. It is important to stock plenty of makeup options for your customer to choose from. Color is “In” and should be highlighted in the cosmetics aisle. From eye to lips to face, new color options abound, so this season, get hip and indulge the color lover in us all. Volume 2, Issue 15 • ECRM Focus

Taking Over — Men’s Fragrances Top the Sales Chart in the Fragrance Market

Excerpt from Cosmetics and Toiletries in the USA, May 2006, Euromonitor International

ECRM Focus • Volume 2, Issue 15

ales of fragrances grew by 2% in 2005, matching the 2% growth rate recorded in 2004. Total fragrance sales benefited from strong sales of premium women’s fragrances during the Christmas 2005 season. New celebrity fragrances helped boost demand for premium women’s fragrances. Premium men’s fragrances took the lead in 2005, with current value growth of 5%. New product launches in 2005, accompanied by extensive advertising efforts, drove growth in premium women’s and men’s fragrances in that year.

Premium women’s fragrances grew by 2% in value sales terms. Both mass men’s and mass women’s fragrances saw sales decreases in 2005, due to a lack of new product innovation. The increased availability of premium fragrances in mass market channels such as drugstores and supercenters have continued to reduce demand for mass fragrances, which hold less allure for consumers. Fashion trends emphasizing feminine and stronger, sexier scents undermined sales of mass unisex fragrances in 2005.

feature gifts, which had previously been limited to department stores. For consumers that do not need sales assistance, drugstores, discounters and Internet retailers provide a lower-priced alternative to department stores for purchases of premium fragrances.

Celebrity Fragrances Aid Premium Women’s Fragrances

Premium Men’s Fragrances Grow Value sales of premium men’s fragrances grew by 5% in 2005 following a 1% increase in 2004. Sales growth in 2005 was driven by an influx of new products that were heavily supported by advertising. Meanwhile, the increased availability of premium men’s fragrance brands in mass retail outlets has led to declining sales of mass fragrances in the same channels. When consumers in mass retailers were given the choice between premium men’s fragrances and mass men’s fragrances, many chose to purchase the premium fragrance for reasons of prestige and price. Shoppers at mass outlets can purchase the prestige and allure associated with premium fragrances at a price lower than that offered by department stores. Mass men’s fragrances saw sales decrease by 1% in current value terms in 2005. Likewise, mass women’s fragrances experienced a decline in sales of 1% in 2005. Mass market men’s and women’s fragrances, with their limited product innovation, found it impossible to compete with the new products rolled out by premium manufacturers. Consumers have continued to purchase more of their premium fragrances in mass market channels instead of in traditional department stores. Discounters now sell premium fragrances, often months after their introduction, at lower prices. Some of the premium fragrances even arrived packaged with a gift bag and tissue paper in an effort to entice consumers who would otherwise purchase fragrances at department stores or specialty stores in order to obtain free gift wrapping. Premium fragrances found in drugstores and mass merchandisers now even

The explosion in new celebrity fragrance launches helped grow sales of premium women’s fragrances in 2005, which proved to be another great year for celebrity fragrances after performing strongly in 2004. Young women are the predominant target for these celebrity fragrances. The use of celebrities to endorse fragrances allows manufacturers to tap into youth’s desires to connect with their idols. Celebrity fragrances are doing well because Americans currently have a love affair with celebrities. Magazines from InStyle to Us Weekly to People show consumers how celebrities dress, live and entertain, and many Americans want to emulate them. Many shoppers have invited these celebrities (actresses and singers) into their closets as well. Jennifer Lopez (JLO by Jennifer Lopez and Sweetface), Gwen Stefani (L.A.M.B.), Beyoncé Knowles (House of Dereon), Bono (Edun) and Ryan Seacrest (The R Line) all have their own fashion lines.

Unisex Scents in Continued Decline Premium unisex fragrances experienced a 2% sales increase in 2005 due to the successful launch of the latest brand extension of a proven unisex fragrance. Unisex fragrances have faced declining sales in recent years after notable success in the mid-1990s. Though there is some stable demand for these products from women who find the lighter unisex scents useful for office wear, trend-driven usage has largely ceased. In fashion and in fragrances, women have started to embrace a more feminine and sexy style, favoring musky fragrances over cool “green” ones. Premium unisex products faced cannibalization by stronger, more complicated and more gender-specific fragrances

during the review period. That said, premium unisex scents have experienced a small comeback due to the 2004 introduction of already successful brand extensions. Sales of mass unisex fragrances have not done as well, declining by 7% in 2005. While the sharp decline in sales of mass unisex products may seem to be a dramatic reversal, such products constitute a very small niche and tend to have limited distribution. The performance of individual products can therefore have a significant effect on sales. Mass market unisex scents, which are primarily copies of well-known prestige products, have suffered declining sales.

Forecast Performance Over the forecast period, fragrance sales are predicted to decline by 4% in constant value terms, due partly to product saturation. There is likely to be continued competition from other areas of the cosmetics and toiletries market, such as bath and shower products and skin care. Competition of this sort is likely to affect demand for mass products more. The increased incorporation of fragrances into other cosmetics and toiletries products is expected to reduce demand for fragrances among both men and women in the forecast period. Product maturity, combined with increased competition from skin care and bath and shower products, is predicted to lead to a decline in sales. Interest in multifunctional skin care products is expected to remain strong among women. Though the scent does not last as long as with fragrances, the use of a scented shower gel and body lotion provides women with a touch of fragrance without the need to apply a separate product. Sales of premium women’s fragrances are predicted to grow by only 1% in constant value terms between 2005 and 2010, while mass women’s fragrances are predicted to fall by 27%. Premium women’s fragrances are expected to show a slight increase between 2005 and 2010 as manufacturers are expected to try to increase overall fragrance usage in two ways. Advertising spending by fragrance manufacturers is expected to increase in the forecast period. Additionally, it is expected that manufacturers will seek to persuade women to apply their fragrance more often throughout the day by introducing more portable fragrance formats, such as rollerballs and solid perfume compacts.

Volume 2, Issue 15 • ECRM Focus

Big Eyelashes and Smoky Eyes = Big Success in Color Cosmetics Excerpt from Cosmetics and Toiletries in the USA, May 2006, Euromonitor International

ales of color cosmetics grew by 3% in 2005. Fashion trends emphasized the “mod” look of the 1960s, featuring big eyelashes and dark eyeliner. As a result, eye makeup showed the strongest growth in 2005. Eyelashes were crucial to the fashion story with magazines featuring false eyelashes and volumizing mascara. The dark, smoky eye continued to be popular. The False Eyelash Look Aids Mascaras and Eye Makeup Sales Eye makeup showed good growth in 2005, with a value sales increase of 7%. Sales of eye makeup also benefited from fashion trends emphasizing full lashes, smoky eyes and a defined eye. Celebrities such as Madonna, Oprah and Jennifer Lopez popularized false eyelashes. Madonna wore custom-made, diamond encrusted mink lashes in her music videos. Lash extensions, which act as hair extensions for eyelashes and last for four to six weeks, also became popular in 2005. Manufacturers promoted volumizing mascaras as a way for consumers to obtain the look of false eyelashes without the hassle of false eyelash application. Strong sales of volumizing mascara drove eye makeup growth in 2005. Mascara is very important for American women, with many saying that this is the one makeup item that they’d want on a stranded island. Women like mascara because it opens up the eye area, making eyes look bigger.

of collagen or hyaluronic acid injections. As women get older, their lips tend to get thinner and wrinkled. Injections and lip plumpers offer the promise of younger looking lips. Despite strong demand for lip plumpers, value sales of lip products declined by 1% in 2005 due to a decline in sales of lipsticks. Lipsticks did not perform as well in 2005 due to an absence of product innovation. The introduction of transfer-resistant technology in 2001 had led to strong growth rates in 2001 and 2002. The PermaTone technology was claimed to create lasting lip color that is resistant to talking, eating greasy foods and kissing for up to eight hours, while offering moisturization through a clear, protective, moisturizing topcoat. The moisturizing feature of the topcoat was designed to address the drawbacks of earlier transfer-resistant lipsticks – lip dryness. Continued consumer demand for these higher priced long-wear lipsticks had continued through 2003, with consumers losing interest in 2004 and 2005.

Facial Makeup Shows Moderate Growth Lip Plumpers See Success In addition to seeking out big eyelashes, consumers also clamored for big lips. Lip plumpers were big in 2005 as women continued to desire Angelina Jolie’s full, pouty lips without the pain

ECRM Focus • Volume 2, Issue 15

Facial makeup sales grew by 3% in 2005 in current value terms. Sales of foundation grew slightly in 2005, aided by numerous product launches. While many women like the skin tone enhancing features of foundation, they don’t like its heavy feel or that it can go into fine lines.

U.S. women increasingly want a natural look and a lightweight, comfortable feel. As a result, mineral-based foundations have been increasing in popularity because they are usually loose powders (with no fillers or oils). Foundations are also competing with tinted moisturizers which combine three steps in one: moisturizer, sunscreen and foundation. Bronzers which are included in blushers/bronzers/highlighters performed well in 2005. Women are now using bronzers on a yearly basis to give themselves a hint of color instead of just using them in the summer months. The introduction of more subtle formulas as well as an expansion in shades has aided sales.

Foundations Offer Skin Tone Matching and Anti-Aging Benefits Manufacturers were busy launching new foundations in 2004 and 2005 in an attempt to reach women who were dissatisfied with foundation. Consumers have traditionally found it difficult to match certain skin tones when choosing foundations. To remedy this situation, manufacturers introduced several new products that claimed to better match skin tones in 2004. In response to consumer dissatisfaction with foundations, companies introduced new products featuring a mistake-proof, natural, matching-tone look.

Miller Zell pick up from Skin/Bath pg 7

Reaching U.S. Hispanics through Online Marketing By David Nehdar, Director, Sales & Marketing, MAG Corporation

As companies plan their strategies to increase top and bottom lines, most will certainly agree that obtaining a new consumer is a good thing. And, all will definitely agree that obtaining that new consumer who belongs to a group that has larger household sizes than the norm, whose average age is relatively young and willing to try new products and whose buying power is increasing at a faster pace than others is most certainly a great thing. If you haven’t guessed it, this consumer belongs to the evermore important group of U.S. Hispanics. As the U.S. Hispanic population continues to soar, companies are rapidly realizing that this group of eager and loyal consumers is here to, not only stay, but to grow incrementally in size and in purchasing power. In fact, by the year 2010, U.S. Hispanics will represent about 15% of the U.S. population and possess approximately $938 billion in disposable income. Is this important to your business? It should be. How, then, can U.S. manufacturers effectively reach this essential consumer group? What challenges face manufacturers and what factors should be considered in implementing marketing strategies? One of the best and effective ways to reach U.S. Hispanics is to utilize the Internet. As we all know, the Internet has increasingly grown to be one of, if not, the main source of global communication today. In the United States, there are more than 14 million Hispanic Internet users and growth among U.S. Hispanic usage outpaces that of the general U.S. market by approximately 30%. In effect, this is more than the combined users of Mexico, Spain, Argentina and Chile. Moreover, according to eMarketer David Hallerman, “as more and more Hispanic

ECRM Focus • Volume 2, Issue 15

consumers go online, marketers using Internet advertising can better target them and measure their actions, compared with what is allowed by traditional ad media.” This, combined with the fact that U.S. Hispanics spend 10% more time per usage day and view 15% more pages per usage day than their non-Hispanic counterparts, strongly suggests that the Internet certainly must be considered as an integral part of any marketing strategy. Once a company has decided to pursue online marketing, they face several challenges in deciding how to package and communicate their message. One of the first things they must determine is who they want to reach. Marketing to a Puerto Rican in Miami can be very different than marketing to a Mexican in Houston. Each ethnicity possesses different customs, attitudes, behaviors and experiences. Companies should study these differences and understand them before designing their campaigns. Moreover, there are 22 different countries of origin and two languages (Spanish and Portuguese) to be taken into consideration. According to the iHispanic Marketing Group, by far the largest ethnicity in the United States, approximately two-thirds is Mexican, followed by Puerto Rican at 9% and Cuban at 4%. This, however, will vary greatly by geographic region so companies must also determine where they want to focus their publicity. Another challenge is to determine in which language a company wants to advertise. According to the Hispanic Monitor, approximately two-thirds of U.S. Hispanics state they get more information about a product when it is advertised in Spanish than when it is advertised in English. In addition, nearly 80% state that there should be ads or commercials directed specifically to Hispanic concerns. Therefore, companies would be remiss if they didn’t consider an integrated campaign using the Spanish language (Portuguese if directed towards Brazilians). Once a company has done their due diligence and determined a strategy taking into consideration who, where and in what language, the iHispanic Marketing Group recommends they should then carefully consider the following 10 factors to build a solid starting point.

Have a realistic objective strategy – Don’t always compare U.S. Hispanics with nonHispanics as they are unique and respond in distinct ways.

Be committed to the market – Your company must be in it for the long term; measure results at 12 months out and adjust campaigns appropriately.

Pre-targeting the Hispanic market needs readiness assessment – Need to have advice from outside specialists as well as covering your frontand back-end processes.

Company must set aside enough resources – Must provide sufficient people, time, money and systems.

Determine if website will be in Spanish or English – Depends on level of content and messages on whether page needs to be fully translated or just bilingual information added.

Research webpage imagery – To increase conversions, companies must research creative imagery and appropriate messages.

Paid programs are usually more cost effective in initiating a campaign – Cost-per-click campaigns can run very expensive.

Anticipate additional marketing efforts – Translation of keywords, phrases or pages in their entirety may require additional efforts.

Test and measure results, and make adjustments – Analyze your efforts and make changes until your company has reached maximum efficiency.

The Hispanic market is not a “one-size-fitsall” – Your company must take into account the differences among each ethnic group and design its campaign accordingly. In conclusion, U.S. Hispanics represent an incredible opportunity for any company willing and able to invest the time to design an effective online marketing campaign. The campaigns must possess a realistic and well-planned, long-term strategy with the proper resources allocated. If done right, be prepared to receive a share of the multibillion dollars of purchasing power that this consumer group has to offer. Buena Suerte!

Fashion Jewelry in Drugstore Chains – Are You Missing Out? By Dusty Cook, The 1928 Jewelry Company

ashion jewelry is an important part of retail business, a great way to expand impulse sales and to create a new customer base. An enticing display of fashion jewelry in the window, visible from the street or advertising in a weekly circular will draw a customer that may not have had a necessity to stop on a given day. Jewelry is a year-round business with annual sales of an estimated $8.3 billion with $1.5 billion coming from drugstores as stated in Accessories Magazine. Fashion jewelry becomes even more important when gas prices are high and the economy is slow. “A person may not be able to buy a new outfit but they can afford new accessories to freshen up a look,” says Jerry Bernie, vice president, The 1928 Jewelry Company.

How to Capitalize How and where jewelry is displayed is a major factor in the success of jewelry sales. Make sure your jewelry is displayed properly and on vendorsupplied fixtures. Presentation, maintenance and service of your jewelry display is imperative to the salability. Many vendors can hire service representatives that will merchandise the permanent fixture. Another option is a promotional unit where product comes in loaded on the display and counter ready. Just because an item is inexpensive does not make it more sellable than a higher priced item. Provide your customers with quality merchandise at a competitive price and they will continue to shop your store. Choose irresistible looks and attractive brands and you will earn the purchase of the impulse buyer. Keep the jewelry in high traffic areas where the jewelry has customer exposure while also being in close viewing range of employees. Jewelry should have a permanent location in the store. This will let your customers know where they can find the jewelry every time they shop. Keep your jewelry fresh, as old merchandise will dramatically decrease your sales and customer interest. Make sure you are providing your customers with quality, trend and season appropriate merchandise, this will keep them coming back to see what is new. Adding jewelry to your store will enhance the look and quality image of your sales floor. The driving force of jewelry sales is advertising. Consumer awareness will help build and maintain a strong customer base. Offering a percentage off or a special purchase will bring in

the consumer and help the retailer sell through their inventory. This is how the department stores keep the customers coming back and new merchandise flowing into the store. Working with trustworthy, service-oriented jewelry vendors can help make your jewelry business a success. Jewelry that is branded or that has name recognition will help increase your jewelry sales as well as expand your customer base. If a customer knows they can go to their local drugstore for the same merchandise as the larger department stores, they will shop where the prices are the best and where the location is the most convenient. Use your jewelry vendors as a tool to the business. Vendors should be aware of your demographics and what product and pricing works best for your area. In today’s busy world, “one-stop shopping” is an important factor to the consumer.

Fall 2006 Fashion Trends Color, color and more color: For fall, blue is the new pink. Blues run a color range from light to dark and opaque to transparent. Blue works well with warm berry tones, grays and browns. Paprika is a deep rich Indian red that has a powerful presence for fall. Paprika works well with warm browns, rust tones and goldenrod. Jet is always a strong color for the holiday season. You will see the use of jet metals mixed with jet, siam and sapphire using crystals and faceted beads. We are currently seeing the jewelry trend turn to the smaller more delicate silhouettes

using pearls and antique metal finishes. Bracelets and necklaces have become just as important as a basic pair of earrings. Layers of necklaces and bracelets worn in multiples have been the summer trend and will continue into the fall. Basics are a year-round business. Included in this subcategory are the staples gold, silver, pearl and jet. Drugstores have gotten fashion savvy with their jewelry selection. They are aware of the need for basics and the need for the color and fashion that follow the trends of the season. It is important to see the need for both categories when carrying jewelry.

Recap: Important Tips to Remember Consistent sales have been increased as many retailers have learned that adding fashion jewelry to their mix have given consumers more reasons to come into the store. Fashion jewelry will provide additional sales and aid in your stores general décor. Jewelry can be a profitable venture for the drugstore chains. Keep in mind location, product assortment and vendors – all of which are important in making your jewelry department a success. Trends change with the season. Be sure to entice your customers with the latest looks and they will continue to shop your jewelry section. Providing your customer with the right product at the right price will maximize your jewelry sales and keep your customers coming back. Volume 2, Issue 15 • ECRM Focus

An in-depth category analysis

BY MIN BAMFIELD

Fresh Colors – Recent Market Trends in U.S. Cosmetics When we think of the $6 billion U.S. cosmetics market, we think of high maturity (90% of women and teens and tweens have reported that they use makeup, according to Mintel, Makeup – U.S., February 2006), high consolidation (the top three companies account for about 80% of the market), as well as new and exciting technology and products. While all those market characteristics have certainly made cosmetics one of the most stable in the health and beauty care (HBC) sector, it is nevertheless not immune to the changes in the general economic environment. In addition, the landscape of U.S. cosmetics has continuously been reshaped by a constantly changing market environment including mergers and acquisitions, the entrance of foreign retailers, more non-traditional channels selling cosmetic products, as well as increasingly fickle consumers. As consumers are learning and becoming more experienced shoppers, the downside is that they have turned out to be less loyal to brands or retail channels (as sources have indicated: “consumers are becoming more and more uncertain and will flirt from brand to brand until they find the best one for them,” GCI, April 2006; “… Americans also proved they had little loyalty to one store over another as they hopped from department to specialty stores to drugstores,” SPC, September 2005) and, in the meantime, their demand and expectations have grown tremendously. Interestingly, consumers are insatiable, as they always want more and more. In the cosmetics market, new colors and effects alone are not enough to get consumers’ attention anymore. Cosmetics consumers are always seeking for more value, more benefits and more immediate effects: • “Consumers are becoming increasingly aware of the functions of specific ingredients, boosting sales for makeup brands that publicize their techniques” (Forbes, Feb. 8, 2006); • “Consumers feel they get more for their money with cosmetics that perform multiple functions” (GCI, November 2005); • “The problem is that even such established brands … may be regarded as aging by today’s fickle

ECRM Focus • Volume 2, Issue 15

consumers, especially those constantly in search of novelty or better results” (Forbes, Feb. 8, 2006). In addition, there is also something else that consumers are looking for – to feel good. According to Soap (April 2006), “demands of this nowsingle market are not only that their products make us look good but also that they help us feel good,” while “they must also provide rapid, noticeable benefits to a fickle, moneyed worldwide populace.” Besides feeling good (which can be related to many factors from safe ingredients to health and wellness to environmental safety), today’s consumers also have many other inner needs (including desires for flexibility, food and drink, to be good, exclusivity, self expression, desires for others and depth, according to a presentation at 2006 In-Cosmetics). What makes today’s consumer market significantly different from yesterday is the fact that it has become increasingly difficult to reach out to consumers as “such previous marketplace touchstones as demographics and lifestyles are fading in the face of what some are calling the multifaced consumers of today,” (GCI, April 2006). This industry has a tough job to do – reconnecting with its consumers. Luckily, over the years, the cosmetics industry has certainly learned how to best understand its consumers and their needs, and most importantly, how to adjust itself to meet such needs through the process of redefining itself, from the use of innovative ingredients and the offering of new functionality, to its crossover to other health and beauty sectors, most notably skin care, sun care, pharma and nutrition. According to Kline & Company (“Innovation in Personal Care – Challenges Facing Raw Material Suppliers and Their Customers,” a presentation at InCosmetics, April 2006), “there continues to be increasing convergence with pharma and nutrition sectors that has lead to new personal care categories … ” such as nutricosmetics, nutraceuticals and cosmeceuticals, all of which have definitely brought new meaning to cosmetics. The reward, as a result, seems to be rather encouraging for the industry. Despite such overwhelming challenges last year as hurricanes, soaring oil prices, as well as the rising cost of raw ingredients for cosmetics products and

packaging (“Corporate Insight: Cosmetics round up for the half year ending October 2005,” www.in-cosmetics.com), U.S. cosmetics had a successful year in 2005, after a disappointing 2004 (a 0.4% dollar decline at constant 2005 prices, compared to 2003, -0.2%; 2002, +4.8%; and 2001, +2.6%, according to Mintel, Makeup – U.S., February 2006; 1.8% dollar growth, weaker than previous years, 2003, +3.2% and 2002, +2.2, according to Datamonitor, United States – Make-Up, December 2005), as a result of unfavorable economic conditions and a lack of new product introductions, according to Mintel’s report (Makeup – U.S., February 2006): • According to Mintel (Makeup – U.S., February 2006), U.S. sales of makeup through all channels had experienced a dollar growth of 1.5% at constant 2005 prices and a dollar growth of 4.5% at current prices, with eye makeup seeing the most significant dollar gain (+9.1% at current prices and +5.9% at constant prices), compared to facial (+2.0% at current prices and -0.9% at constant prices) and lip (-2.7% at current prices, -5.5% at constant prices). • Datamonitor (United States – Make-Up, December 2005) estimated the value growth of U.S. cosmetics in 2005 to be 2.5%., better than 2004, with its volume growth (+1.2%) continued to be low. It is important to note, however, although the majority of the cosmetics sales went through mass channels (according to ACNielsen data for the 52 weeks ending April 22, 2006, total food, drug and mass (FDM) cosmetics sales including Wal-Mart have surpassed the $3 billion sales through department stores: FDM without WalMart, $2.61 billion; Wal-Mart, $1.28 billion), it is the department stores that have seen more dynamic growth, according to reports: • According to Mintel (Makeup – U.S., February 2006), “in 2005, some 47% of makeup sales took place through non-FDM channels, primarily department stores and specialty makeup boutiques … [and] department store growth is progressing at a faster pace than that of mass market outlets.”

Dollar Sales, Unit Sales and Percent Changes (2003-2006) for Cosmetics Categories Total U.S. – FDM (excluding Wal-Mart) for the 52 weeks ending April 22, 2006 Dollar Sales

% Chg

04/22/06

04/26/03

04/24/04

04/23/05

04/22/06

-2.7 0.3 -5.3 -1.6 -7.6 4.6 -12.0

-2.0 2.6 -2.0 -6.0 -7.1 6.1 -15.1

UPC-Coded Products Only Total Cosmetics Eye Makeup Facial Makeup Lipsticks Nail Care Remaining Talc & Dusting Pwd.

2,612,456,929 828,398,910 744,844,051 565,093,721 270,432,286 178,188,022 25,499,940

-0.9 2.6 0.5 -6.5 -3.4 3.7 -7.9

4.2 10.5 4.5 -2.2 -1.9 7.7 2.1

Unit Sales 04/22/06 585,822,309 181,311,295 112,360,883 135,000,229 115,028,481 34,985,423 7,135,998

% Chg

04/26/03 04/24/04 04/23/05 04/22/06 -4.2 -1.0 -5.5 -2.8 -9.4 4.5 -13.7

-4.3 0.2 -3.5 -7.1 -8.2 3.5 -14.5

-0.8 2.2 0.2 -3.5 -3.4 3.3 -8.6

-0.5 5.0 0.5 -5.2 -5.2 5.9 -2.5

Source: ACNielsen Strategic Planner.

• According to an NPD press release (April 13 2006), makeup experienced a 6% increase in sales at U.S. department stores to hit the $3 billion mark in 2005, the biggest growth in prestige beauty, compared to 3% for fragrance and 2% for skin care products, with the eye segment leading the growth (+10%), followed by the face segment (+5%) and the lip category (+1%), and these three segments together account for nearly 95% of all cosmetics spent in department stores. One significant trend in the prestige sector, according to NPD, is the increasing popularity of the artist and alternative brands, which “have taken over substantial ground,” accounting for 29% of this market, compared to these brands’ 3% market share in 1997, resulting in almost one out of every three dollars spent on prestige makeup products going to an artist and alternative brand. Surprisingly, while cosmetics sales growth through department stores in 2005 was stronger than that of 2003 (+4%), it was weaker compared to the 6.7% in 2004 (based on NPD data). However, the future looks bright for prestige cosmetics as Forbes (Feb. 8, 2006) has indicated that more consumers are “in search of higher-quality new products and more exclusivity,” as “makeup becomes less expensive, better and more accessible,” and dwindling market share further pushes manufacturers into the luxury segment. Happily, the mass sector of U.S. cosmetics has experienced a rebound in sales in 2005, after three years of dollar losses (2003, -2.7%; 2004, 2.0%; 2005, -0.9%), through FDM (excluding Wal-Mart), according to ACNielsen for the 52 weeks ending April 22, 2006. Growth has returned to the overall cosmetics sales in FDM (excluding Wal-Mart), which has yielded a pleasant dollar sales gain of 4.2%, reaching a total of $2.61 billion, in spite of the still flat unit sales (-0.5%). Such a positive market change can be felt in every cosmetics category, since all of them (eye, facial, lip, nail, remaining, talc and dusting

powder) have experienced the strongest dollar sales since the period ending in April 2003, except for lipsticks, although its current performance of a 2.2% dollar loss and the 5.2% unit loss was better than its two previous periods. The eye makeup segment is the main driver in the mass sector just as in the overall market, with its total dollar growth in the double-digits (+10.5%), and all three of its segments having achieved solid growth (dollar sales: eyebrow and eye liner, +11.3%; eye shadows, +9.7%; mascara, +10.4%), according to the same ACNielsen data. Double-digit dollar growth has also occurred in two of the five facial makeup segments, blushers (+10.7%), face powder (+10.8%), compared to foundation liquid (+3.0%), concealers (+0.4%), and foundation cream and powder (-0.9%). The negative side is two of the main categories, nail care and lipsticks, have continued to struggle particularly in unit sales, as both experienced further decline than last year (with their current unit declines exceeding the previous period). In comparison, Information Resources, Inc. (IRI) data (52 weeks ending April 16, 2006, through FDM excluding Wal-Mart) is less optimistic and has shown some disagreement with ACNielsen in some areas: • Dollar growth in eye, facial and lip were considerably weaker compared to ACNielsen data, although eye, nail and lip have improved in dollar sales from our last report almost a year ago (IRI data for the 52 weeks ending May 15, 2005): eye (current, +8.6%, +3.7%; previous, +4.4%, +3.4%), nail (current, -1.2%, -6.4%, previous, -2.5%, -2.0%), lip (current, -3.4%, -6.5%; previous, -3.9%, -1.8%) and facial (current, +2.0%, -0.6%; previous, +3.5%, +2.2%). • Contrary to the results from ACNielsen, the facial segment saw less dollar growth (current, +2.0%; previous, +3.5%) and stagnant unit growth (current, -0.6%; previous, +2.2%) in Volume 2, Issue 15 • ECRM Focus

Dollar Sales, Unit Sales and Percent Changes for Cosmetics Categories Total U.S. – FDM (excluding Wal-Mart) for the 52 weeks ending April 16, 2006 Cosmetics – PL Breakout by Type Dollar Sales Category – Cosmetics – Eye Eyebrow Makeup Eye Liner Eye Shadow Mascara Category – Cosmetics – Facial Blush Body Accessory Bronzer Concealer Foundation Makeup Combo Makeup Remover (Lotion/Gel) Makeup Remover Implements Powder Category – Cosmetics – Nail Artificial Nails and Accessories Nail Accessories/Implements Nail Polish Nail Polish Accessories Nail Polish Removers Nail Treatment Category – Cosmetics – Lip Lip Combo Lipgloss Lip Liner Lip Treatment Lipstick

Dollar Sales % Chg YAgo

$852,855,600 $40,832,590 $203,877,700 $197,482,400 $407,012,700 $916,553,000 $101,815,700 $12,956,090 $28,535,150 $79,737,840 $437,281,400 $28,575,570 $29,779,870 $27,220,490 $170,650,800 $560,788,500 $81,009,390 $150,585,400 $235,937,100 $27,254,730 $48,185,100 $17,816,830 $604,207,900 $2,875,222 $172,702,500 $45,928,980 $22,248,700 $360,452,500

the current period than the 52 weeks ending May 15, 2005.

Unit Sales % Chg Unit Sales YAgo

8.6 5.1 10.9 6.4 8.4 2.0 7.5 -26.7 18.3 1.3 -1.5 -17.6 14.2 3.6 12.2 -1.2 0.6 4.5 -3.3 -13.2 -7.0 12.9 -3.4 46.9 -2.8 0.2 37.1 -6.1

184,089,400 13,364,440 48,766,720 44,618,520 76,916,740 143,170,700 18,617,670 2,301,683 4,341,877 14,667,240 56,345,180 4,606,306 6,107,703 9,482,434 26,700,600 202,900,500 17,251,460 62,615,050 83,458,890 6,071,323 30,532,400 2,971,410 138,725,900 736,346 47,508,930 13,298,070 4,162,135 73,020,380

3.7 -4.3 7.3 0.3 4.9 -0.6 1.5 -34.6 21.0 2.3 -5.0 -15.0 10.8 6.2 6.4 -6.4 -6.0 -3.4 -6.3 -18.5 -11.1 4.4 -6.5 115.5 -7.9 -4.0 24.1 -7.9

Wal-Mart has certainly been a strong force in mass cosmetics retail, since it alone accounts for close to one-third of the total FDM sales (based on ACNielsen data) and was “about 12-15% of total makeup sales,” according to Mintel report (Makeup – U.S., February 2006). However, according to ACNielsen (52 weeks ending April 22, 2006), Wal-Mart is still behind drugstores in cosmetics’ dollar sales ($1.28 billion vs. $1.53 billion), unit sales (319.62 million vs. 333.5 million) and growth (Wal-Mart, +2.0% in dollar sales and -0.3% in unit sales; drug channel, +6.5% in dollar sales and +1.0% in unit sales). Both ACNielsen and IRI data have indicated that the drug channel has the strongest cosmetics category in FDM, consistent with Mintel’s finding. Mintel (Makeup – U.S., February 2006) has attributed drug channel’s success in this category to its taking a more aggressive approach to cosmetics sales and better selection. The drug channel’s success with cosmetics also has a lot to do with its efforts in pushing forward its own private label products, with its PL cosmetics sales (including PL eye, PL facial, PL nail and PL lip) reaching $58.06 million (IRI data week ending April 16, 2006), compared to WalMart (ACNielsen data ending April 22, 2006, $19.25 million) and the food channel (ACNielsen data ending April 22, 2006, $11.24 million; IRI data week ending April 16, 2006, $16.47 million). When examining the IRI data, it is clear that the food channel has only a very limited number of established PL cosmetics categories including: PL makeup remover implements ($1.62 million; +15.9%; -1.3%), PL nail accessories/implements ($5.66 million; +1.7%, +2.6%), PL nail polish removers ($9.08 million; -5.9%, -8.9%) and therefore, has certainly

Source: Information Resources, Inc.

Dollar Sales, Unit Sales and Percent Changes for Cosmetics Categories Total U.S. FDM (excluding Wal-Mart) for the 52 weeks ending April 22, 2006

UPC-Coded Products Only Total Cosmetics Cosmetics – Eye Makeup Cosmetics – Facial Makeup Cosmetics – Lipsticks Cosmetics – Nail Care Cosmetics – Remaining Cosmetics – Talc & Dusting Pwd.

FDM Dollar

Unit

Food Dollar

Unit

04/22/06

4.2 10.5 4.5 -2.2 -1.9 7.7 2.1

-0.5 5 0.5 -5.2 -5.2 5.9 -2.5

1.8 7.0 1.1 -3.4 -2.7 4.5 0.2

-1.6 3.7 -1.3 -6.4 -4.9 3.8 -4.5

Drug Dollar 04/22/06

04/22/06

6.5 12.6 7.0 1.2 -0.8 10.8 3.1

1.0 6.3 1.7 -1.7 -5.7 8.5 -1.6

*Food including $2 million and over in sales, excluding supercenters; drug including $1 million and over in sales. Source: ACNielsen Strategic Planner, ACNielsen Wal-Mart Channel.

ECRM Focus • Volume 2, Issue 15

Unit

Wal-Mart Dollar

Unit

04/22/06 04/22/06 2.0 9.32 3.11 -4.27 -4.68 -13.82 11.81

-0.3 6.12 -0.67 -4.54 -5.55 0.27 11.37

missed some good opportunities, considering that both ACNielsen and IRI data have shown that consumers’ interest in many PL cosmetics categories have grown significantly: • According to ACNielsen ScanTrack, total FDM (excluding Wal-Mart) PL cosmetics experienced 36.5% dollar gain, 2.2% unit sales gain, 52 weeks ending Dec. 31, 2005, compared to this category’s overall 3.6% dollar gain and 0.1% unit gain for the same 52 week period. There has been very impressive growth in all PL cosmetics categories except for talc and dusting powder (-10.1%): PL eye makeup (+402.7%), PL facial makeup (+617.5%), PL lipsticks (+265.6%), PL nail care (+6.5%) and PL cosmetics remaining (+73.9%);

constant prices) and lip (-5% at current prices, -19% at constant prices). • According to Datamonitor’s (United States – Make-Up, December 2005) prediction, the compound annual growth rate (CAGR) of the makeup market value in the period 2005-2010 will be 3.6%, and the CAGR of the market volume will be 1.5%, with growth for each of the coming years to 2010 expected to be stronger (2006, +3.4% value and +1.4% volume; 2007, +3.6% and +1.5% volume; 2008, +3.9% value and +1.5% volume; 2009, +3.5% value and 1.5% volume; 2010, +3.5% value and +1.5% volume) than the years from 2001 to 2005, except for the volume growth of 2003 (+3.2% value and +2.3% volume).

The drug channel’s success with cosmetics also has a lot to do with its efforts in pushing forward its own private label.

• According to IRI, most of the PL cosmetics subcategories, through FDM (excluding Wal-Mart) for the 52 weeks ending April 16, 2006, have far exceeded their subcategories’ growth, including all four eye segments (PL eyebrow makeup, +647.3%; PL eye liner, +420.1%; PL eye shadow, +140.0%; PL mascara, +1,152.8%), six of the eight facial segments (PL blush, +149.9%; PL body accessory, +58.5%; PL concealer, +479.5%; PL foundation, +58.5%; PL makeup remover lotion/gel, +72.7%; PL powder, +204.8%; but not PL bronzer, +3.6%; and PL makeup remover implements, -1.0%), three of the six nail segments (PL nail polish, +107.3%; PL nail polish remover, -6.6%; PL nail treatment, +36.4%; but not PL artificial nails and accessories, -37.8%; PL nail accessories/implements, +2.6%; PL nail polish accessories, -99.2%) and three lip segments (PL lip gloss, +180.5%; PL lip liner, +224.9%; PL lipsticks, +112.1%). Sure enough, 2005 was a rejuvenating year for cosmetics, but with facing continued challenges (the need for continued innovation, consumers’ skepticism of health information and health claims, intensified competition among retail channels, increasingly limited growth opportunity in the U.S. market), will such growth be able to continue? Major research companies seem to be very optimistic in their forecasts for 2006 and years ahead: • Mintel (Makeup – U.S., February 2006) has forecasted that U.S. sales of makeup through all channels will see an average annual dollar growth rate of 4.7% at current prices from 2006 to 2010 (2006, +4.7%; 2007, +4.7%; 2008, +4.8%; 2009, +4.6%; 2010, +4.7%), although it shows that sales at constant 2005 prices will decline from the 1.5% growth for 2005, 2006 and 2007 to 1.4% in 2008 and 1.2% in 2009 and 2010. From 2005 to 2010, U.S. FDM will see the most significant dollar gain from eye makeup (+28% at current prices and +9% at constant prices), compared to facial (+5% at current prices and -11% at Volume 2, Issue 15 • ECRM Focus

10 Best Practices in Implementing Digital Signage & In-Store Media By Craig Apatov, EVP, Chief Marketing & Client Strategy Officer, MillerZell; Stuart Kirkpatrick, President & CEO, DDC | Digital Display & Communication; and John Wilkins, Senior Director Strategic Marketing, MillerZell, Inc.

In-store communications historically have been characterized by static signage and displays. Other technology-based media have entered the scene, however, and at the same time the effectiveness of television advertising is eroding. There is a need for a more energetic and flexible way of communicating brand identity and purchase drivers in the store in “the last three feet” in front of the shelf, kiosk or fixture. In-store digital media addresses this challenge and is a powerful strategy that gives retailers and brands the ability to leverage a vibrant delivery of sight, sound and motion to target shoppers with compelling, captivating messages at the precise moment they are making a purchase decision. Messages can be delivered at the product, brand or category level. They can come through multiscreen displays for an entire cosmetics department or through stand-alone screens integrated into a single brand’s nail or fragrance display. Digital media, whether by the name “electronic media,” “digital signage” or “dynamic signage,” is no longer the stuff of dreams or science fiction. Widespread applications are in place and continue to grow in industries such as

ECRM Focus • Volume 2, Issue 15

banking. A number of retailers have demonstrated significant sales lifts and are increasing their investment in in-store digital messaging. When one considers that 70 to 80% of purchase decisions are made in the store, the importance of this medium (especially when deployed with more traditional printed media) becomes clear. Several factors have supported the growth of in-store digital signage. High-quality display units are more affordable. Software has greater ease of use and reliability. Data travels quickly over existing networks. Stand-alone digital kiosks can be managed with plug-and-play flash drives. Yet, in-store digital and electronic messaging still has tremendous growth potential. This is a crucial time for retailers and manufacturers who have not yet adopted the strategy to take a much closer look. Experienced providers have gone through the learning curve of designing and implementing in-store digital media systems. This includes learnings about the mix of digital and traditional printed signage, as well as about the management of in-store digital media systems. Many early technical challenges have been overcome through

widespread availability of broadband connections, as well as content software improvements. There are still many considerations in making an investment in digital signage and communications a success. No one consideration is difficult, but the discipline of addressing all of them is crucial. Both strategic and tactical, they represent integrated elements that must be satisfied to yield the highest possible return on investment (ROI). Following is a list of 10 learnings and best practices that are crucial to success and optimized ROI for brands and retailers alike in the adoption of in-store digital media as an important component of a total communications strategy.

Digital in-store signage must be part of a holistic approach to consumer and shopper communications. In-store digital signage is an important part of total shopper communications – it is not a stand-alone strategy. It is just as important to ensure that digital messages, images and words are consistent with comprehensive brand, distribution and pricing strategy as it is to ensure that print and television messages are consistent. In-store digital signage is

an unprecedented tool that can deliver the right message at the crucial point of purchase decision. This is not to say that in-store images should be a carbon copy of print or television messages, but the tone and tenor of messages and images must be consistent with a comprehensive strategy, and due consideration should be given to the way in which different media interact and complement one another.

Define your objectives. In-store digital signage is meant to attain specific business objectives such as sell-throughs and margin optimization – digital signage is not the business objective itself. What do you expect from this medium? Category awareness such as reminding the shopper of sun exposure and SPF benefits of certain lip color manufacturers?

protection during winter. Do NOT expect in-store digital signage to solve problems it is not designed for such as a suboptimal color pallet, stock-outs or inappropriate product distribution in a particular market or season.

Choose the right partner – invest in reliability, flexibility and scalability. In an arena where there are still many startups, choose an experienced partner who knows the full range of elements that are required for a successful program. Ask questions about the provider’s experience, staff and references. This helps you avoid being someone’s learning experience. Make certain that the partner you choose truly understands shopper behavior and retail as well as the technology.

seasonally and in different retail channels – and who knows how to help you keep content fresh, on brand and on strategy. That partner must understand the realities of retail and how digital messaging truly fits your brands, categories and retail environment.

Maintain perspective. Digital signage is a tool that can drive incremental sales – it is not an objective. The objective is the profitable sale of goods and services. Avoid the “we’ll get to that later” attitude that can appear in a rush to deploy a program. Also avoid knee-jerk reactions to a competitor’s deployment of an instore digital program. As powerful as this vibrant medium is, it must be planned and measured carefully.

A successful implementation requires collaboration with a partner who understands your business needs, timing and purchase drivers – seasonally and in different retail channels – and who knows how to help you keep content fresh, on brand and on strategy. Choose a company whose objectives are not skewed by a single-product focus such as one type of screen or network configuration. You can better avoid being stuck with proprietary technology solutions from a short-lived company and you can select a partner who focuses on the success of your business, not, for example, just on the sale of a network approach when a stand-alone solution might be the best choice, or vice-versa. Drawing shoppers to a specific brand or freestanding kiosk? Promotion? Trial? Adoption? Cross-selling fragrance and eye color? It is critical to define objectives and measurements and it is important to adopt a long-term outlook when doing so.

Content and strategy must benefit three core constituents: consumer (shopper), supplier ad retailer. Clearly the shopper must benefit through inspiration and navigation to the product/s she needs and desires (within her timeframe). At the same time, brand and category messages should complement one another. An individual brand strategy that succeeds at the expense of the overall retail category will have a short life. It is critical for suppliers and retailers to collaborate to maximize sales returns for both and to deliver shopper expectations.

DO expect digital in-store signage to energize communications when it is most important – in the selling environment. Do anticipate that a category strategy can lift sales in an entire department, for example, by reminding the shopper of comprehensive beauty messages or SPF attributes during summer or hydration

Develop a plan: Determine what you want to accomplish, a timeframe and a way to measure results. Include a pilot period as well as multiple content configurations and messages that are compared to each other. Metrics are critical. Will you measure sales lift in an entire category, brand, product or cross-sell with another category? Without measurements you are sure never to know whether you have succeeded or failed. Make certain that all stakeholders are involved. This includes suppliers, category buyers, product development, store operations, IT and your digital signage partner. Plan communications first and then find the technology that is appropriate for your needs.

Plan for freshness and seek a partner who understands your business. Digital signage is alive and dynamic – just as seasons and products are. It is also only as good as the content and the timing of delivery, so plan in advance to keep content fresh and relevant. This is not a one-time purchase of a set of fixtures. A successful implementation requires collaboration with a partner who understands your business needs, timing and purchase drivers –

Pilot first. Test your plans and strategies, especially regarding content and the mix of digital and traditional in-store media and then move forward on a greater scale. One of the greatest attributes of in-store digital messaging is its flexibility – it inherently allows you to test content and delivery strategies. The effectiveness of three different images and messages, for example, can be compared across different stores across regions to select the most powerful delivery. Thanks to powerful content management software, the winning message in this scenario could then be deployed across all stores and regions instantly. At the same time, pilot tests might reveal that purchaser’s of some categories respond better to messages delivered on the weekend, at a certain time of day or in Spanish.

Be wary of pure in-house deployment. Even if you have excellent in-house IT, design and marketing talent, your team may not have digital signage experience. These crucial stakeholders should be on the strategy team, but do you want to be your own guinea pig? * * * Digital in-store messaging is an ultra-powerful medium. As a strategic addition to traditional instore printed communications, it can improve the shopper’s experience and can drive incremental sales for retailers and manufacturers alike by first improving in-store navigation, delivering important information and delivering aspirational messages. Like all things powerful, it requires careful planning, commitment and selection of the right partner. Volume 2, Issue 15 • ECRM Focus

The 2006 Nail Care Business – It’s a Natural Thing!

Article contributed by Pacific World Corporation

ECRM Focus • Volume 2, Issue 15

U.S. mass market retailers are enjoying much welcomed sales growth from the nail care category while surprisingly, the nail salon business has taken a downturn. Nails Magazine 2005-2006 Big Book reports that after three years of steady growth, nail salon dollar volume fell 6% over this past year from $6.84 billion to $6.43 billion and an additional 6% drop is projected for 2006. The same economic influencers such as gas prices, rising interest rates and natural disasters affect both businesses but the nail salon market has been further burdened by declines in the numbers of salons and active technicians. Also, the heightened media coverage of unsanitary conditions that cause serious nail infections has created growing concerns about safety: enough so as to invite legislative action. In contrast, U.S. mass market retailers scanned over $923 million in nail products, up 3.6% from last year. Packaged Facts contends that “busy lifestyles coupled with work pressures and tighter budgets leave little time and money for many consumers to spend on luxurious personal care activities giving rise to the increased demand for convenient, yet decadent at-home products.” U.S. retailers and their vendors are very well positioned to capitalize on the current consumer mindset and the expanding nail care trends. The prevailing trend – “natural!” In general, women prefer a casual everyday style in dress, makeup and nails. Take some time to leaf through the latest fashion and celebrity magazines and you will see that the vast majority of nails are short and natural looking. French manicures are also more natural in color tones, shorter in length and squoval (squared-oval) in shape. Albeit fewer in number, the polish looks are subtle cream and nude with a spattering of reds and pinks. The data validates these observed trends. The nail polish subcategory extends its streak to five consecutive years of declining sales. Conversely, this desire to strike the most natural appearance bodes well for nail treatments and implements. Paradoxically, the artificial nail business also benefits. Women don’t mind faking it as long as it looks real! And the artificial nail companies have made significant strides in the look, feel and application of the products. Increased consumer awareness and satisfaction are evident in the numbers. Despite space/SKU reductions, this subcategory grew 7.2% to $154 million. The latest period, which captures the spring resets, shows a 16% increase and 38% of the sales are from new items. The key attributes for artificial nail purchase decisions are fit, duration of wear and the look of the nails. The leading artificial brands offer beautiful natural-looking nails that are easier to apply and last longer. As the nails are shorter, the nail kits now include tabs and suction cup tools that aid in the application process. Product technologies such as flat and high arched nail options, as well as flexible nail bases enhance the fit and feel. In terms of look, the most popular nails present a classic, natural French manicure look, which represents 37% of

total subcategory sales, increasing at a 28% rate. Two other artificial product types are developing notable sales figures. A longstanding highlight is the nail art segment, which spans a wide range of ages. At a 12% dollar share, nail art topped the charts in the recent month, up 54%. The larger kits commanding higher rings are driving the increase. The big surprise in this subcategory is artificial toe nail products! That’s right; women who slip on their open-toed shoes and flip flops after a long winter of neglect have discovered a quick fix. Combined with the common malaise of nail infections, this segment has risen to a 7% share of total dollars. During AprilAugust, the share reached 12% and the ceiling is still unknown. Tagging on the heels of this success, the nail treatment subcategory reversed a softening trend: the sales came in at $137 million, up 4.2%. These products are found across the entire cosmetic wall but the bulk of the sales are concentrated within the pegged section of the nail care/miscellaneous nail department. Consumers who want both beauty and health have been conditioned to shop the treatment section. The confluence of several trends provides a promising outlook for this business. First, the fashionable natural look requires a regimen that includes many beauty enhancing nail treatment products. Additionally, the rise of nail infections and fungus issues draws more consumers to the wall in search of fast remedies. And the aging population will continue to seek solutions for weakening and brittle nails. Again, the data supports these trends. Strengtheners are at 25% of the total sales and building momentum, up 3% for 52 weeks and up 12% for 13 weeks. The antifungal segment has sustained its progress, up 8%. The beauty/health products like cuticle oils, up 18%, and treatment-formulated French manicure kits, up 17% are gaining popularity. In addition to the national brands, an important part of the mix within nail treatments is the variety of salon products boldly touting higher retail prices. The debut of salon products several years ago quickly elevated dollar sales and ultimately the increases proved challenging to anniversary with a void of new items in the ensuing years. Fortunately, successful new items from both national and salon brands are now reinvigorating the nail treatment subcategory. Complementing the nail treatment steps of the beauty regimen, nail implements and beauty tools continue to be the workhorses of the cosmetic wall, unmatched in the return on invested inventory. Sales have ascended to $368 million, an increase of 6.7%. This subcategory not only offers products that address nail care needs but also beauty tools for brows, lashes and hair. While hand/nail

implements combined for the majority of sales (47% share), up 4%, tweezers and eyelash curlers rank second representing 28% of the business and sales grew 11%. Foot implements total 16% of the dollar sales and are trending positive, up 6%. Hair scissors are 5% of the category and increased by 8%, and finally miscellaneous products (nose hair trimmers, blackhead removers, etc.) own the balance of the sales (4% share) and dollars have grown by 5%. Home manicure kits are up 26%, an additional testament to the increase in at-home nail care regimens. The majority of brands are sharing the success. The product assortment has been very stable over time, so significant innovation has not been an integral piece of the current achievements. Implement sales seem to persistently grow at such a steady pace on their own merit that the question often comes up, “what are the consumers doing with all of these implements?” We could only use the post 9/11-airport security confiscation factor for so long! So in order to rise above the competition, retailers need to focus on a clearly defined pricing strategy and a smart promotional schedule. Case study analyses have shown that some practices don’t work well. First, the urge to become “Implements ‘R’ Us” with too many brands blurring the price points certainly does not appeal to the already confused consumers and, ultimately, the sales mostly dissect the brand shares. Second, deep discounted and overly frequent promotions may increase turns, but overall this practice results in unnecessary margin compression. A subcategory that has seen a flurry of promotions in an effort to revive sales is nail polish.

respective franchise cosmetic fixtures against the polishes merchandised in the nail care/miscellaneous nail section. A migration to the miscellaneous nail section has been occurring for several years. Franchised cosmetic polishes represent $137 million and are declining, -23%, while miscellaneous nail section polishes sold $128 million and are growing at a clip of 14%. As all polish brands strive to latch on to the latest trends, a few opportunities stand out. First, it’s no secret that holiday and occasions are prime periods for nail polish promotions. Also, the Hispanic population is the largest and fastest growing ethnic group. The Gallup Study reports that Hispanic women spend the most time on their nails and enjoy experimenting with the colors in an effort to achieve individualized looks. Last, it’s been said that color polish is the gateway product for teens to move toward more usage of cosmetics. Although this may still hold true as many teens enjoy trying new trendy colors, the Simmons Market Research Bureau 2005 study found that 63% of teens still prefer the natural look. Nail polish remains a key component of overall nail care – it just requires close scrutiny, flexibility and some tough decisions during the spring and fall reviews. Overall, nail care is an increasingly important business for mass market retailers and they will continue to be challenged by alternative channels and formats. Not yet mentioned, giant companies in the door-to-door business representing billions of dollars in sales are introducing more new nail care items every year.

In addition to the national brands, an important part of the mix within nail treatments is the variety of salon products boldly touting higher retail prices. The debut of these products several years ago quickly elevated dollar sales and ultimately the increases proved challenging to anniversary with a void of new items in the ensuing years. Even though polish still has the highest penetration rate compared to other nail care products, mass retail sales continue to wane, off 2.4% for the last year, leveling out at $265 million. Nail polish actually topped the list of all nail care products sold in nail salons. According to Nails Magazine 2004-2005 Big Book, 98% of consumers bought nail polish and 52% of salon owners chose polish as their bestselling item. It’s no wonder salon brands are doing well in the mass retail arena. Within mass retail, it’s interesting to compare the polishes merchandised within their

In the midst of the nail salon lull, mass retailers can prepare for an influx of savvy sophisticated consumers looking for the latest trends offered through at-home nail products. These women are educated and are hungry for more information. They demand quality and are willing to pay for products that provide the ultimate natural look of beauty. And they are choosey about the right kind of shopping experience. In general, the economic conditions, the aging population, hectic paced lifestyles, the focus on wellbeing and the connection to the Internet all present opportunities to those retailers that sincerely understand the varied consumers needs attached to each of these dynamics and they all have favorable implications for nail care. Source: All figures cited from ACNielsen, Food, Drug, and Mass (including Homescan Wal-Mart Panel data) for the period ended April 29, 2006 unless otherwise noted.

Volume 2, Issue 15 • ECRM Focus

Nu-World ad

In this day and age it seems as though many of today’s beauty products are tomorrow’s beauty fads. Products enter the market with the promise of a whole new you, but quickly disappear when newer and so-called “advanced” products surface. The one exception to the rule: bronzers and concealers. Bronzers and color-correcting concealers are no longer simply accessories to a makeup bag – they have become beauty basics. Over time, women of all ages have been asked, “What is your beauty staple and the one thing that you cannot leave the house without?” With the evolution of makeup and beauty trends, this answer has joined the usual response of “mascara” to “bronzer – so I have a healthy-looking glow!” and “concealer – to hide my imperfections!” Year after year, season after season, these makeup tools fix everything from pale, dull-looking skin to dark under-eye circles and the unsightly red blemish that pops up at the most inconvenient time.

Bronzers & Concealers: Today’s Beauty Basics Article contributed by Physicians Formula Cosmetics

ECRM Focus • Volume 2, Issue 15

In 2006, the color cosmetic category grew to a $542 million industry (year to date). Impressively, the bronzer category is the fastest-growing segment in color cosmetics. Bronzers now reflect an approximately $50 million segment in the industry with more than a 50% growth in the past year. The reason for this influx within the bronzer category is simple. Women are looking to achieve a healthy-looking glow year-round. One reason is that, more and more, women are striving to achieve the sun-kissed look of Hollywood’s bronzed beauties. As the images of A-list actresses appear on television and movie screens, more women strive to imitate that healthy, bronzed glow. Perhaps one of the most sought after reasons to use a bronzing powder is to get a natural tan glow without the damaging effects of the sun – primarily premature wrinkles, fine lines and the risk of skin cancer. Consumers are getting smarter when it comes to sun safety. Using bronzers and

bronzing powders are a natural and safe alternative to tanning beds and sun-worshipping. Bronzers are now used as daily, year-round makeup tools to naturally enhance skin tone without the harmful rays of the sun – one can use a bronzer to warm up winter-paled skin and get a healthy looking glow regardless of skin tone. Even if already blessed with medium to dark skin, bronzers help to even out skin tone and add definition. According to Ingrid Jackel-Marken, senior vice president of marketing at Physicians Formula, “Bronzers have become the new powder. Essentially, bronzers are powders with deeper, richer pigmentation. Bronzers come in a variety of finishes from matte to shimmer. For the most natural-looking, tan glow, opt for a matte finish. For more drama, add some bronzing shimmer.” Technological advances within the bronzing category have caused an increase in availability of bronzer colors and textures that cater to all skin types. Everyone can benefit from using a bronzer but with the increasing variety and almost overwhelming selection of bronzers, how is a consumer supposed to figure out which bronzer is best? How do you help your customer choose what color is best for them? What works the best, multi-toned or onecolored? How do women choose a bronzer that is dark or light? What is more flattering, a shimmery bronzer or matte? Celebrity makeup artist Matin, who’s clients include starlettes such as Angelina Jolie, Gwyneth Paltrow, Julianne Moore, Katie Holmes, Liv Tyler, Rebecca Romijn, Renee Zellweger and Salma Hayek, helps answer some frequently asked bronzing queries and divulges a few of his favorite tips on how to achieve a healthy glowing complexion year round.

These are great tips for retailers to share with their consumers.

How do you choose the right bronzer for a specific skin tone?

It is important for people to choose a bronzer that is close to their own skin tone. Many immediately go for darker shades, with the hope that it will recreate a dark and deep tanned look. However, this mistake will only result in a dirty, unnatural looking tan. For a natural sun-kissed look, choose a light bronzer for paler-toned skin, a medium tone for olive skin and dark shade for Matin’s Tip: Remember, darker-toned skin. it’s not just about the Choose a lighter, cheeks, so use a bronzer more subtle bronzer on high parts of the face shade in the winter to mimic the effect of months, to keep the sun-kissed skin. look natural and light.

Which is better to use a multicolor palette or a one-color bronzer?

Both are great to achieve a healthy glow. However, a multicolored palette is best used when you want a more natural subtle hint of color. The sun naturally provides a wide variety of tones on the skin.

How can one apply bronzer so it looks natural?

For a natural-looking tan, brush a powdered bronzer on the high points of the face, where the sun naturally hits stronger such as cheeks, the bridge of the nose and the top of the forehead. Also, don’t forget to apply some on the neck and under the chin too – a natural tan doesn’t stop at the face. Bronzers can even give the illusion of a slimmer face, by brushing the powder just below the jaw line!

Are there certain times when you would use a matte bronzer over a shimmery one? Shimmery bronzers are a great way to add a little glam to a look. But beware that shimmer can actually magnify bumps and wrinkles when worn. Shimmery products should be used as an accent, rather than an overall bronzing base.

Matin’s Tip: Bronzers will highlight rather than hide skin imperfections of the face, so be sure to use a color-correcting concealer before applying bronzer, to make your summer glowing skin look flawless.

Which of your celebrity clientele use bronzers?

Bronzers are big in Hollywood year-round. Both Ashlee Simpson and Mandy Moore are bronzer obsessed. I use bronzers on both to help keep

that healthy sun-kissed glow. I dust a little bronzer on Ashlee’s forehead to keep her bronzed look natural and subtle.

C o l o r - C o r r e c t i n g C o n c e a l e r s Concealers remain a strong category in the industry. Some women forego foundation altogether opting to use just a concealer and powder for their everyday beauty regimen. Concealers help to hide any minor skin imperfections for a flawless-looking complexion; however, there are color-correcting concealers that are designed to target specific minor skin imperfections for a more natural-looking finish. There is one simple formula that is the key to success with color-correction: Opposite colors tone each other down. Most consumers don’t realize that there really isn’t a need for excessive makeup when playing the “cover-up” game. Instead of applying a thick layer of foundation, neutralize imperfections first and watch them visually disappear! According to Jackel-Marken, “color-correction is the basic principle of neutralizing one color by applying the opposite color. This started with the color spectrum on which each color has its opposite, for example, green is opposite red and yellow is opposite blue.” Color-correction is widely used by professional makeup artists to disguise more visible imperfections such as dark, under-eye circles, reddish blemishes, scars, birthmarks and bruising. ”Instead of applying layers of foundation on one of these annoying random imperfections, you can now neutralize them first,” advises Matin. “Once neutralized, light imperfections visually disappear, requiring less makeup to help cover it up.” For consumers that are having trouble choosing a concealer, Matin recommends using the following color-correcting concealers for certain circumstances: Yellow – Hides bluish skin discolorations such as dark under-eye circles and bruises. Apply a light layer of yellow concealer over the bluish imperfection, such as dark under-eye circles and watch it virtually disappear. Then apply your foundation or a flesh-tone concealer for a flawless finish. Green – Disguises reddish skin imperfections such has blemishes, scars or overall redness. Apply a light layer of green over the reddish imperfection then follow with your foundation or flesh-tone concealer. Bronzers and color-correcting concealers are no longer viewed simply as additions to a beauty routine but instead have proved to be beauty basics – the must-have items that everyday women, celebrities and makeup artists alike swear by for a beautiful, flawless finish. Volume 2, Issue 15 • ECRM Focus

AD TRACK

BY MEENA GHAZIASGAR

A tool for identifying ad trends

Baby Boomers – a Key Group to Target for Cosmetics Baby boomers currently represent the largest segment of the U.S. population and their wants and needs truly affect the market. The aging-adverse baby boomers are likely to be a key group to focus on in the cosmetics category for several reasons. They are already spending more on personal care, especially on skin care products, so it follows that they will be willing to spend money on cosmetics

that promise to give them a youthful glow. The strongest areas for growth will likely be in facial makeup, with an emphasis on foundations and concealors that fight wrinkles. ECRM’s Ad Comparisons can be a helpful tool to compare ad placements across various categories and channels to figure out what’s hot in the cosmetics category. Looking at the bar graph,

Breakdown of Makeup Category (past 12 months)

Cosmetics Advertising by Subcategory

which breaks down the cosmetics advertising by subcategory, lip products were advertised the most, followed by eye makeup, with face makeup coming in third. Looking at the pie chart for the cosmetics category breakdown, lip, eye and face makeup were the big leaders again. It remains to be seen if ads for face makeup will surpass ads for eye or lip makeup.

Breakdown of Nail Category (past 12 months)

Fragrance Ads by Month

Charts were generated with ECRM Efficient Ad Comparisons data using the following search criteria: Retailers: drug channel, grocery channel, mass channel; Categories Fragrance, Cosmetics, Makeup, Nail; Time Period: 12 months; Pages: front, middle, back. More information can be found at www.ECRM-Online.com or by contacting Meena Ghaziasgar at mghaziasgar@ecrm-epps.com or (440) 498.0500, ext. 1241.

ECRM Focus • Volume 2, Issue 15

WHAT’S NEW WHAT’S NOW

BY NICOLA WILHELM

A quick look into the latest category trends Sampling is a way for cosmetics and fragrance brands to promote products by personally touching the customer. Be it through a product launch or part of a gift with purchase promotion, insiders predict that samples will become an even larger part of the personal care category marketing.

As the baby boomers turn 60, cosmetics brands are adapting their products and marketing to reach this financially powerful demographic. With new formulas, color palletes and adapters designed specificially

An ever-broadening consumer base has helped push the cosmeceutical segment to more than $13.3 billion, a 7% increase, according to MarketResearch. No longer a “female-only” category for baby boomers, cosmeceuticals are now appealing to men and young adults. The segment is expected to reach unprecedented growth in the future, predicting an increase of 29.4% by 2010. Apparel and personal beauty websites have posted a remarkable double-digit increase in visits according to Nielsen/NetRatings. With growth reaching 33%, retailers must consider this ever-increasing option for selling and purchasing products. Cosmetics and beauty sites also led the list of visits ranked by time, with some visits nearly reaching the one hour mark.

for aging skin, manufacturers are relying on these lines to boost sales.

The lack of product innovation in the nail polish category has spurred an interest in natural-looking nails. As consumers begin to focus on nail health rather than appearance, retailers are recognizing the potential of at-home treatments. By 2008, retail sales of nail treatments are expected to hit $130.6 million.

According to a survey, 26% of shoppers are willing to pay a little more in exchange for good service and advice when purchasing cosmetics. With drugstores offering exclusive product lines and onsite beauty advisors, the transition from purchasing cosmetics at a department store has become more widely accepted by shoppers who prefer high-end products and service. Shifting away from the cooler and more fleeting scents, the new trends are predicting a “fragrance warming.” These new products are warm, in the sense, that they have longer lasting accords and do not evaporate as quickly. Ingredients include tropical fruits, such as mango and guava, or the sensual scents of vanilla and musk.

Convenience stores and dollar stores are hoping that they can lure cosmetics consumers with value, as opposed to the greater selection and variety offered by larger retailers. Supermarkets, facing a similar dilemma, have lost 20 points in health and beauty care market share. Hoping to regain these profits, many supermarkets are expanding their cosmetics departments or adding pharmacies, if space allows. Sources: www.cosmeticsnews.com; Consumer Products Buyer, Fall and Spring 2005; Cosmetic Packaging & Design; DSN Retailing Today; Drug Store News; www.internetretailer.com; www.fragrance.org.

Volume 2, Issue 15 • ECRM Focus

JUST THE FACTS STATS

BY DOUG DEL ZOTTO

A snapshot of category statistics and market research

Youth, Celebrity and Fragrance ACNielsen data for fragrance sales over the past four 52-week periods shows that dollar sales of women’s selections rebounded strongly after years of decline while men’s selections abruptly turned from years of substantial losses to a recent double-digit gain. Gift sets have also shown double-digit growth. The popularity of celebrity launches and inexpensive colognes aimed at the youth market helped to propel sales to new heights, particularly in unit volume. ACNielsen data excludes Wal-Mart sales.

Fragrance Dollar Sales for the 52-Week Periods Ending April 26, 2003 Through April 22, 2006 Total U.S. – FDM (excluding Wal-Mart) Subcategories Cologne & Perfume – Women’s Women’s Gift Sets & Skin Care Packages Cologne/Lotion – Men’s Children’s Cologne & Gift Sets

Dollar Sales 04/26/03 296,265,660 170,280,628 152,533,808 9,122,928

04/24/04 285,429,456 164,391,816 140,739,406 13,257,561

04/23/05 287,087,557 181,322,315 129,620,023 15,835,166

$ Percent Change vs. Year Ago 04/22/06 309,841,862 201,944,270 144,033,625 20,075,385

04/26/03 04/24/04 04/23/05 04/22/06 -9.1 -3.7 0.6 7.9 -13.8 -3.5 10.3 11.4 -2.2 -7.7 -7.9 11.1 4.7 45.3 19.4 26.8

Source: ACNielsen Strategic Planner.

Celebrity launches are the fastest growing segment of the global fragrance industry (Fortune, Nov. 14, 2005). Household & Personal Products Industry (April 2006) claimed that the recent fragrance sales increase is actually due to celebrity-inspired scents and their attraction to younger consumers. Some brands are also receiving sales boosts by employing celebrity spokesmodels. Sales of women’s products comprise almost 75% of the total dollar sales of ACNielsen fragrance subcategories and Chain Drug Review (March 27, 2006) attributed celebrity category-linked sales to 26% of women’s purchases. Celebrity appeal is not without a disadvantage. A younger consumer has a tendency to switch brands as a celebrity’s popularity changes or a new celebrity grabs public attention (Cosmetics International, Feb. 10, 2006). This can contribute to the growing number of new perfumes, estimated at 350 (Advertising Age, March 27, 2006), that enter the market every year. According to NPD Group research (published in Business Wire, April 13, 2006), this high volume of launches appears to be shortening the product lifecycle. In the past, a new fragrance launch could generate substantial sales for two to five years; however, present sales typically drop to insignificance within one year. This encourages the introduction of more new product launches that further undermine brand loyalty (The Times, Jan. 2, 2006). Manufacturers have been devising a greater number of slightly altered versions of the originals, also known as “flankers,” in order to extend product life (Global Cosmetic Industry, October 2005). A greater number of celebrity launches are planned for 2006 (Fortune, Nov. 14, 2006). Over the 52-week period ending April 22, 2006, sales of men’s fragrances increased radically. ACNielsen data for dollar sales shows an abrupt change from a 7.9% annual loss to an 11.1% gain. Unit sales show an even higher contrast during the same period, an 11.4% loss rose to a 39.7% gain. Unit sales, at just under 15 million, are by far the highest of the last five annual periods. Men’s fragrance data has been skewed by sales of inexpensive products targeted toward teenage boys. Tom Pirovano, ACNielsen Retailing Services, reported that sales of one specific cologne rose 622%

Fragrance Unit Sales for the 52-Week Periods Ending April 26, 2003 through April 22, 2006 Total U.S. – FDM (excluding Wal-Mart) Subcategories Cologne & Perfume – Women’s Women’s Gift Sets & Skin Care Packages Cologne/Lotion – Men’s Children’s Cologne & Gift Sets Source: ACNielsen Strategic Planner.

ECRM Focus • Volume 2, Issue 15

Dollar Sales 04/26/03 33,221,935 19,635,988 12,391,718 1,689,962

04/24/04 30,354,460 18,728,925 12,075,206 2,775,952

04/23/05 30,151,262 19,117,622 10,700,248 2,479,381

$ Percent Change vs. Year Ago 04/22/06 33,841,442 20,850,496 14,951,937 3,317,596

04/26/03 04/24/04 04/23/05 04/22/06 -11.0 -8.6 -0.7 12.2 -13.5 -4.6 2.1 9.1 6.6 -2.6 -11.4 39.7 -8.1 64.3 -10.7 33.8

to over $20 million of retail sales in the latest annual period. Unit sales reached over 5 million. The next closest-selling cologne accounted for $7.3 million of retail sales. Tom Pirovano further stated that heavy purchases of inexpensive offerings have similarly been accounting for a greater sales portion of children’s cologne and gift sets. Advertising campaigns have been highly successful in reaching the teenage male market. Presently, up to 45% of body spray purchases are made by young men. Previously, most fragrance purchases were made for them by women (Chain Drug Review, March 27, 2006). Euromonitor data shows moderate growth of men’s fragrances. Perhaps, today’s users of inexpensive colognes will boost future sales of more upscale offerings. Euromonitor data (published in Household & Personal Products Industry, April 2006) shows

U.S. Fragrance Retail Sales for 2005 Sales ($ Billions) Fragrances Premium Premium Men’s Premium Women’s Premium Unisex Mass Mass Men’s Mass Women’s Mass Unisex

6,202.7 4,856.5 1,345.7 3,476.0 34.8 1,346.2 428.4 909.7 8.0

Enquiring Minds Want to Know Fragrance deals can provide sweet incentives for celebrities. Celebrities commonly collect between 5% and 10% of all sales in exchange for identity association with the product (Fortune, Nov. 14, 2005). Some celebrities take an active role in the development of the fragrance that bears their name while others are recruited for a less active role as spokesmodel for an existing brand. An expanded 2005 roster of celebrity offerings may have led some to believe that saturation is beginning to occur but sales have not faltered. The largest jump occurred last year; 2005 sales increased to $150 million (NPD Group, published in Business Wire, April 13, 2006), a 58% gain over 2004 record sales of $94.9 million (NPD Beauty, published in The New York Times, June 30, 2005). Although celebrities provide the advantage of a ready-made image for a line of products that is less expensive than building an entirely new brand (Advertising Age, March 27, 2006), disadvantages are still considerable. According to Fortune (Nov. 14, 2005), marketing costs can bleed operating margins to as low as 5%, leaving manufacturers to recognize profits only when consumers buy a second bottle or a brand extension. Sources: Advertising Age, March 27, 2006; Business Wire, April 13, 2006; Fortune, Nov. 14, 2005; The New York Times, June 30, 2005.

% Change 2004/2005 3.1 4.2 3.1 4.7 2.1 -0.9 -1.2 -0.8 -7.0

Source: Euromonitor International

that combined fragrance sales at all U.S. outlets greatly exceeds that reported by ACNielsen for monitored channels. Overall fragrance sales increased by 3.1% from 2004 to 2005 to $6.2 billion. Premium women’s products led sales growth at 4.7%. Floral scents comprised the bulk of women’s sales; a movement toward women wearing a variety of scents was also identified (Household & Personal Products Industry, April 2006). Mass unisex sales showed the most sales decrease, -7.0%. Unisex products have had more success outside of the United States than domestically (Global Cosmetic Industry, April 2006), where gender segmentation has become more dominant (MMR, Nov. 14, 2005).

Celebrity Fragrance Sales, 2000 Through 2005

Year

Sales (Millions of Dollars)

2005 2004 2003 2002 2001 2000

$150.0 $94.9 $83.2 $65.0 $46.1 $45.3

Source: NPD Beauty (published in The New York Times, June 30, 2005 and Business Wire, April 13, 2006).

Sources: Advertising Age, March 27, 2006; Business Wire, April 13, 2006; Chain Drug Review, March 27, 2006; Cosmetics International, Feb. 10, 2006; Fortune, Nov. 14, 2005; Global Cosmetic Industry, October 2005 and April 2006; Household & Personal Products Industry, April 2006; MMR, Nov. 14, 2005; The Times (London, England), Jan. 2, 2006.

Volume 2, Issue 15 • ECRM Focus

JUST THE FACTS STATS A snapshot of category statistics and market research

Nails and Cosmetic Accessories Overcoming Low Expectations ACNielsen subcategory data for nail products and cosmetic accessories shows that overall dollar sales are trending toward a turnaround after years of decline.

Nail Products and Cosmetic Accessory Dollar Sales for the 52-Week Periods Ending April 26, 2003 Through April 22, 2006 Total U.S. – FDM (excluding Wal-Mart) Subcategories 04/22/06 False Nail and Nail Decoration Manicuring Needs Cosmetic and Nail Grooming Accessory Cosmetics – Noncotton Aplctrs/Puffs/Etc Cosmetics – Applicator Brushes

Dollar Sales 04/26/03

04/24/04

04/23/05

04/22/06

97,351,998 68,154,952 241,655,497 28,025,390 15,902,612

88,181,888 72,915,015 238,720,285 25,535,365 18,647,186

84,430,117 69,575,191 246,685,168 23,320,823 21,626,966

85,611,144 72,659,446 257,905,509 22,191,806 23,626,381

Source: ACNielsen Strategic Planner.

Increasing mass sales of nail products have countered some research expectations for 2006. Sales were anticipated to continue to fall or to remain flat due to the proliferation of low-priced services offered through nail salons (NPD Group, Euromonitor, both published in Global Cosmetic Industry, March 2006) and a present fashion movement away from long nails (Packaged Facts, published in Chain Drug Review, March 27, 2006). In the meantime, not only has the number of salons and active nail technicians declined (Bobit Business Media, published in Global Cosmetic Industry, March 2006) but consumers seem to be trending toward the purchase of shorter artificial nails and new pedicure products (Chain Drug Review, March 27, 2006). False nail and decoration product dollar sales climbed out of ongoing losses to a gain of 1.4% during the annual period ending April 22, 2006. Manicuring needs and cosmetic and nail grooming accessories fared even better, realizing a 4.4% and 4.5% increase, respectively. In cosmetics, applicator brushes almost reached double-digit growth for a third straight period, while sales of non-cotton applicators continued to contract for the fourth straight period. Sources: Chain Drug Review, March 27, 2006; Global Cosmetic Industry, March 2006.

ECRM Focus • Volume 2, Issue 15

$ Percent Change vs. Year Ago 04/26/03 04/24/04 -5.6 0.8 -0.3 -5.8 -4.5

-9.4 7.0 -1.2 -8.9 17.3

04/23/05 -4.3 -4.6 3.3 -8.7 16.0

1.4 4.4 4.5 -4.8 9.2

2006 ECRM Event Calendar EPPS

DATES

Convenience/Front End/Checkstand

LOCATION

1/8 - 1/11

The Westin Los Angeles-Los Angeles, CA

NCA/ECRM – EPPS Candy Marketplace – Halloween & Christmas

1/16 – 1/20

The Westin Los Angeles-Los Angeles, CA

Pharmacy

1/22 – 1/26

The Westin Los Angeles-Los Angeles, CA

Vitamin, Diet & Sports Nutrition

1/29 – 2/1

The Westin Los Angeles-Los Angeles, CA

Cosmetics, Fragrance & Bath

2/5 – 2/9

The Boston Park Plaza Hotel & Tower-Boston, MA

Global/European Beauty Care

2/26 – 3/1

Fairmont Monte Carlo-Monte Carlo, Monaco

3/5 – 3/9

The Boston Park Plaza Hotel & Tower-Boston, MA

Cough & Cold, Analgesics & Digestives Contract Manufacturing/Packaging for Beauty & Personal Care

3/12 – 3/15

The Westin Crown Center-Kansas City, MO

European Grocery & Health & Beauty Care

3/19 – 3/22

The Westin Warsaw-Warsaw, Poland

Photo & Electronics

3/26 – 3/29

Crowne Plaza Hotel Atlanta-Ravinia-Atlanta, GA

Store Brand Foods

4/2 – 4/5

Scottsdale Plaza Resort-Scottsdale, AZ

Dollar Stores/Value Health & Beauty Care & General Merchandise

4/2 – 4/5

Renaissance Cleveland Hotel-Cleveland, OH

Private Label Health & Beauty Care

5/7 – 5/10

Renaissance Cleveland Hotel-Cleveland, OH

Home Health Care

5/21 – 5/24

Renaissance Nashville Hotel, Nashville, TN

International Health & Beauty Care

5/21 – 5/24

Sheraton Bal Harbour Beach Resort-Bal Harbour, FL

Pharmacy Services, Technology & Automation

5/22 – 5/25

Renaissance Nashville Hotel, Nashville, TN

Institutional, Mail Order & Managed Care Pharmacy

6/11 – 6/13

Renaissance Cleveland Hotel-Cleveland, OH

Skin/Bath

6/11 – 6/14

Fairmont Turnberry Isle Resort & Club-Aventura, FL

Health Plan & PBM

6/13 – 6/15

Renaissance Cleveland Hotel-Cleveland, OH

Hair Care

6/14 – 6/17

Fairmont Turnberry Isle Resort & Club-Aventura, FL

NCA/ECRM – EPPS Candy Marketplace – Valentine’s Day & Easter

7/9 – 7/12

Renaissance Cleveland Hotel-Cleveland, OH

Sun Care*

7/16 – 7/19

Marriott Harbor Beach Resort & Spa-Fort Lauderdale, FL

Cosmetics & Fragrance

7/18 – 7/21

Marriott Harbor Beach Resort & Spa-Fort Lauderdale, FL

Household/Pet Products

7/23 – 7/26

The Phoenician-Scottsdale, AZ

Housewares, Auto, Hardware & Seasonal General Merchandise

7/24 – 7/27

The Phoenician-Scottsdale, AZ

Contract Sourcing Pharmaceuticals – OTC Meds – Vitamins

7/30 – 8/2

The Phoenician-Scottsdale, AZ

Snack, Beverage & Grocery Emerging Growth Channels

8/6 – 8/9

Renaissance Schaumburg Hotel-Schaumburg, IL

Personal Care, Baby & Oral Care

8/13 – 8/16

The Phoenician-Scottsdale, AZ

Health Care

8/15 – 8/18

The Phoenician-Scottsdale, AZ

Hispanic & International Foods

8/20 – 8/23

Renaissance Houston Hotel-Houston, TX

Hispanic Marketing

8/23

Renaissance Houston Hotel-Houston, TX

Hispanic Non-Foods

8/23– 8/25

Renaissance Houston Hotel-Houston, TX

Diet, Nutrition & Vitamin

8/27 – 8/30

Renaissance Schaumburg Hotel-Schaumburg, IL

ECRM MarketFocus Marketing Services

8/27 – 8/30

The Boston Park Plaza Hotel & Tower-Boston, MA

School & Office Supplies

9/17 – 9/21

The Boston Park Plaza Hotel & Tower-Boston, MA

Specialty Pharmacy

9/25 – 9/27

Crowne Plaza Hotel Atlanta-Ravinia-Atlanta, GA

Candy Annual Planning

9/25 – 9/28

Renaissance Waverly Hotel-Atlanta, GA

Global/European Packaging & Printing

10/4 – 10/6

Radisson SAS Hotel Cologne-Cologne, Germany

Global/European Household/Beauty/Vitamin/Health

10/22 – 10/25

Crowne Plaza Hotel Nottingham-Nottingham, England

ECRM MarketFocus Store Planning & Procurement (Not-for-Resale)

11/5 – 11/7

Renaissance Cleveland Hotel-Cleveland, OH

Italian Wine

11/5 –11/7

Grand Hotel Rimini-Rimini, Italy

ECRM MarketFocus In-Store Merchandising Services

11/7 –11/9

Renaissance Cleveland Hotel-Cleveland, OH

Italian Food

11/7 –11/9

Grand Hotel Rimini-Rimini, Italy

Natural & Organic Foods

11/7 – 11/10

Doral Tesoro Hotel & Golf Club-Fort Worth, TX

Halloween, Christmas, Arts & Crafts, Party & Toys

11/12 – 11/15

The Boston Park Plaza Hotel & Tower-Boston, MA

*Sun Care retailers stay 2 days for meetings

www.ECRM-Online.com • 440.498.0500

Dates and locations are subject to change.

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

MARKETING INITIATIVES This section contains product information and photos from leading and niche manufacturers in the Cosmetics & Fragrance categories. Marketing Initiatives, as well as hot, new items are featured on the following pages. Although not all manufacturers are represented here, this comprehensive section will give you an exciting overview of the tremendous range of products that exist in these dynamic and profitable categories.

Donnamax, Inc. Consumers are fortunate to have an overwhelming number of options when it comes to buying health and beauty care products. Sometimes the routine of buying basic necessities becomes just that – a routine. In order to break that, Donnamax has introduced a line of nail implements that is fun, functional and funky. Introducing a full range of nail items by Pandora™. It’s Pandora™ revealed. Pandora™ promises to make the ordinary, extraordinary. Consider it an extreme makeover for your hands, your feet and your cosmetic bag. As with all Donnamax products, the Pandora™ line of nail files, emery boards, foot buffers and much more, delivers a perfect balance between quality, variety and most importantly eye-catching packaging that is attractive, informative and clean. For additional information, please contact rosemery@donnamax.com or visit www.donnamax.com.

Allegro Mfg, Inc. Allegro Mfg Inc. is a dynamic fashion house providing consumer product solutions across an array of fast-paced categories. Based in Los Angeles for more than 35 years, Allegro now trades in more than 20 countries and maintains facilities in London, Paris, Mexico City, Toronto, Sydney, Manila and Shenzhen. Lead by experienced designers with a wealth of industry knowledge, Allegro’s product development and textile design teams are constantly creating collections to meet the needs of our diverse customer base. While strengthening its position as the dominant global supplier of cosmetic bags over the past four years, Allegro has also become a leading supplier of diaper bags, camera bags, lunch bags, small travel accessories and sports bags! Allegro has been producing in wholly-owned facilities in Asia for over 30 years. The majority of production is undertaken at state-of-the-art factories in China; however, to limit its dependence on one region, Allegro continues to utilize more than 1,000 skilled employees at its ISO-9002 facility in Manila. Proactive vendor management, cutting-edge products, collection exclusivity and the most competitive pricing in the marketplace are just some of the advantages Allegro brings to you! We appreciate your continued support and look forward to working with you in 2006!

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Mary Kate and Ashley Cosmetics High Profile, Fashion Forward and Stylish, Mary Kate and Ashley Cosmetics are featured monthly in multiple page advertising in Elle Girl and Teen Vogue magazines. Publicity in both print and electronic media creates ongoing excitement and demand at store level for this special brand. marykateandashley.com, with tens of thousands of visitors is exclusively devoted to the brand, featuring the newest introductions in cosmetics and other areas of interest. This exciting line features trendy collections of sparkling shimmering shades for eyes, lips, cheeks, face and body. Quality enhanced, attractively priced and sophisticated packaging ensures higher than average turns. Continuous bonus offerings drive sales. Product selections include fast turning, value added Sunlit Bronze Illuminating Collection with a double bonus brush and coordinating Lip/Eye Gloss. Illuminating Lips features high fashion slim line Lip Color with a bonus Clear Mega Gloss Tube packaged for maximum impact at point of sale. Merchandising options include an elegant in line wall display with “call to the wall” stylish images of Mary Kate and Ashley. Interactive merchandising for ease of product selection drives sales at store level. Other high impact displays offer innovative ways to showcase the latest product offerings and shade breaks.

Mary Kate and Ashley Cosmetics Mary Kate and Ashley Holiday Kits Fun to feature and value added, Mary Kate and Ashley holiday kits are a sure-fire way to guarantee stellar sales results. Among the #1 selection for family gift giving, these cool holiday gifts combine coveted color cosmetics with must-have accessories. Holiday Kits have been developed as the perfect “glam gift” for our youngest customer. 2006 kits include deluxe selections with multiple cosmetic products and premium gifts. The assortment includes Vintage Glam, Sparkle & Shine and Diamond Sparkle collections. High annual sell through has made the Mary Kate and Ashley Holiday program a phenomenal success story.

Diamond Cosmetics G.N.P. Nail Treatments Diamond Cosmetics, manufacturer of G.N.P. nail treatments, now offers their top-selling nail products at remarkable prices for retail sales. Salons have used Diamond’s nail treatments for over 15 years. Why? Because they are priced right and, more importantly, because they work! The G.N.P. treatment line consists of 10 Day Nail Strengthener, a professional-strength nail strengthener, containing calcium, aloe and garlic. This product helps grow strong nails in 10 days. Ultimate Nail Hardener is enriched with vitamins, protein and fluoride, which hardens nails in the growing process. 90 Second Polish Dryer is a non-yellowing, fast-drying topcoat that dries polish in 90 seconds to a high gloss shine. To polish it off, G.N.P. now offers three French Manicure Easy Kits: Peach, Beige and Pink, and the USA Manicure Easy Kit with a natural blush shade. Each kit includes two bottles of polish and tip guides. Diamond’s private label division customizes products and packaging based on customer’s needs. For more information, please contact Diamond Cosmetics at (954) 572-3462 or visit www.diamondcosmetics.com.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Anisa International Inc. Anisa International has built the only large-scale American-owned brush factory in China. It is a state-of-the-art facility, blending traditional Korean brush-making expertise, Chinese manufacturing efficiency and U.S. capital, management, design and quality control. You deal with an American company with offices across the U.S. and Hong Kong. Clients come to Anisa International for a creative partnership, inspiration and the added confidence that only direct control of the manufacturing process can bring. AI is not only a leading manufacturer of cosmetic brushes for the cosmetic industry (including such companies as Smashbox, Bobbi Brown, Elizabeth Arden, Merle Norman and many more), but is also providing makeup artist quality products to major retailers across the United States. Anisa International is proud to launch its own line of Accent Pour Vous Cosmetic Accessories at the ECRM EPPS event and looks forward to meeting with all attending retailers to discuss how AI can benefit your business – whether it is through a creative partnership in developing private label programs or via our exciting new line of Accent Pour Vous brushes and accessories. For more information, contact Anisa International 3423 Piedmont Rd. NE, Suite 530, Atlanta, GA 30305, by phone (404) 869-6475, fax (404) 869-6476, email info@anisa.com or visit www.anisa.com.

PUIG Fragrance & Personal Care USA, Inc. The largest couture and cosmetics maker in Spain, PUIG Beauty and Fashion Group, will continue to expand its fragrance presence into the U.S. market. In 2006, PUIG Fragrances & Personal Care USA, Inc. is continuing to focus on building a relevant and profitable business in the U.S. market via wellknown international brands targeting the mass market fragrance consumer. Following the 2004 huge success of Spirit Antonio Banderas for Men and the subsequent 2005 success of Spirit Antonio Banderas for Women, PUIG F&PC USA will continue to capitalize on the growth of prestige/celebrity fragrances in the mass market with more introductions. In the summer of 2006, PUIG F&PC USA will introduce Antonio by Antonio Banderas targeted to a more mature male consumer. The new men’s fragrance will be supported by $12 million dollars in marketing support. Also, via a licensing agreement with Mattel, PUIG F&PC will continue developing a line of Barbie fragrances providing younger consumers and tweens a viable alternative to the current fragrance brands marketed to their demographic.

e.l.f. Cosmetics e.l.f. Cosmetics is a revolutionary new beauty company that is melding the appeal and functionality of department store cosmetics with a price point everyone can afford. Since its launch in June 2004, e.l.f. Cosmetics has been well received by retailers and the press alike. This new product with a revolutionary approach has been featured in over 40 national magazines in the past few months, making it one of the most talked about new brands. e.l.f. Cosmetics has also been featured on TV segments such as Sony’s “Life & Style” and E! Entertainment’s “Fashion Police.” It has become a regular among celebrities such as “Desperate Housewife” Eva Longoria, Ashlee Simpson, Hillary Duff, Maggie Gyllenhaal and Taryn Manning. Our goal is to educate our consumer about makeup, makeup application and letting her be hers.E.L.F.! To view our entire portfolio, please visit www.eyeslipsface.com. To view a recap of our press clippings, please visit www.eyeslipsface.com/buzz.asp.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Jane & Company, LLC Jane delivers quality, fashion and value through the introduction of hundreds of exceptional new items since its relaunch in 2004. During the past two years, Jane has continuously delivered on its promise of providing high-quality, great value products for women of all ages. Jane continues this momentum with the launch of several significant new products and an upscale new communication strategy. Jane’s new advertising campaign reflects the sophistication of product shade stories and quality offerings while highlighting Jane’s fashion-forward, global appeal and attitude. The campaign will be in such fashion-forward magazines as Allure, Glamour, Lucky, Jane and Elle Canada. Following the success of spring’s new products, (Shimmering Bronzers are in retailers’ top 20 selling items with 15+ turns), Jane continues to launch sophisticated, innovative products with technologically superior R&D at mass prices. Fall 2006 launches include: 1) Tinted SPF 30 Moisturizer perfects skin tone and texture, protects against sun and aging, without looking made up, 2) Oil-Free Gel Bronzer light diffusing elements provide a healthy-looking glow, 3) EyeZing Doubles feature customer-preferred color combinations of top EyeZing shadows, 4) MaxLip≈ Lip Plumper naturally increases appearance of lip volume and diminishes unattractive wrinkles by increasing circulation, and 5) Liquid Lip moisturizes keeping lips soft and supple in a variety of luscious colors. For sales information, call (888) 350-8633.

Jane & Company, LLC Shimmering Bronzers – Jane new Shimmering Bronzers launched in spring 2006 and have seen tremendous success at the wall. These four SKUs have consistently, since launch, remained in the top 10% of the bestselling items for retailers and have maintained 15+ turns at mass and drug! Shimmering Bronzers have light diffusing properties that add a luminous glow to skin. The oil-free shimmering powder has multiple shades to give highlight and dimension to skin. The four color combinations were created to provide the best assortment for all skin tones. The sleek package offers great color visibility and gives the consumer the benefit of a convenient brush and mirror all-in-one. In addition to the upscale packaging and fabulous fashion, Jane continues to bring to market high-quality products at a great value! Nearly Foundation – Tinted Moisturizer SPF 30 – Jane’s new Nearly Foundation is a moisturizer for face that provides sheer coverage without adding a foundation look. This lightweight formula perfects skin tone and texture without heavy made up. Nearly Foundation provides SPF 30 protection and is oilfree, fragrance-free and allergy tested. Three different shades are available to flatter varied complexions. This product is Nearly Perfect for summer, sports and active women of all ages. Jane delivers quality, fashion and value. For sales information, call (888) 350-8633.

Palladio Beauty Group Palladio Beauty Group, the manufacturer of “PALLADIO, Herbal and Vitamin Enriched Cosmetics,” the leading brand in the beauty supply class of trade introduces two new brands for the retail class of trade. “BE CHIC” a line of high-quality cosmetics targeted towards women of all ages and skin tones. Formulated with department store quality in mind, this multicultural line includes lipstick, lipgloss, retractable eye and lip liner pencils, liquid eyeliner, mascara, eye shadow, blush and bronzer. The merchandising system is consumer friendly and inviting, while being easy for the retailer to merchandise and maintain. The brand is marketed at a MSRP of $2.99. “SHINE OFF” oil absorbing blotting tissues are perfect for alleviating oiliness from the face. After absorbing the oil from the skin’s surface, the tissue leaves a fine trace of powder that gives the skin a fresh feeling and a no-shine appearance. The convenient purse-size package makes any time touch ups a cinch. Available in three shades: Nude, Natural and Warm Beige. These carded items can be merchandised on a clip strip or shelf sorter (available.) Shine Off blotting tissues are an ideal addition to add incremental sales to your department.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Added Extras, LLC Added Extras, LLC specializes in children’s, teen and ladies cosmetics, personal care and related accessories for all of your beauty needs. We are one of the country’s leading manufacturers with a fully staffed, privately-owned office in Shanghai, China that oversees all direct import programs and QC. Our componentry, flavor and fragrance are second to none, surpassed only by outstanding quality and pricing. Our proudest accomplishment is the fact that in the last year our customer base has grown by 42%. The current selection of licenses held by the company are truly dynamite. Whether it be Popsicle© for frozen desserts, Pepsi© for beverages, Push Pop© and Bottle Pop© for candy, or Barcode Kitties© and Trollz©, not to mention Disney© – for the best in a character lineup, we have it! We are eagerly looking forward to seeing you at the ECRM EPPS event.

S.F. & B. Colormates Corp. Colormates Cosmetics – Your Best GMROII Brand The Colormates cosmetics brand has proven to be a leading profit producing program and the best GMROII performer in the color cosmetic arena. Competing against such brands as Cover Girl, Maybelline and Wet ‘n Wild, the Colormates brand outperformed the national brands in gross profit dollars/margins, unit turns and GMROII analysis from an everyday wall planogram program in 2005. The proof was in the numbers! The Colormates Value Pack program introduced in 1998 and the launch of a complete $1.00 retail program of full size value cosmetic products in 2001 offers the consumer the best value available in the color cosmetic category. The Colormates program is by far the most easily managed color cosmetic brand in the marketplace (only three item/shade changes in the last eight years). Keep It Simple! The Colormates motto is “our items go through the register.” In addition, we prided ourselves on over a 99.5% on time and complete shipment serviceability on all orders in 2005. To simplify and maximize profits in you cosmetic department, join the growing list of retailers stocking a full line Colormates Cosmetic program. To find out more about the Colormates success story, please contact our sales and marketing office at (941) 923-1347 or rdplummer1@aol.com, attention Bob Plummer.

Earth Therapeutics Earth Therapeutics is nationally advertised, with strong brand recognition! Our philosophy is therapeutic wellbeing for the mind, body and spirit. Earth Therapeutics is about functional body care – body care that is focused on providing solutions! Earth Therapeutics is a successful and popular accessories and implements program for cleaning, grooming and massage. Our treatments work holistically – calming and realigning mind and body. Discover Earth Therapeutics, wellbeing for the mind, body and spirit! For further information, please contact Susan Frey, national sales manager, at (618) 654-7840.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Del Labs Sally Hansen is the #1 nail care destination brand! Sally Hansen continues to lead the nail care category by offering innovative and technologically advanced products in a comprehensive line to solve nail care problems in the formulations and delivery systems that meet consumers’ needs and preferences. From nail treatments that strengthen, grow and fortify nails to an assortment of nail enamel lines that offer consumers color plus nail treatment benefits, hand and foot care products to exfoliate, moisturize and restore skin’s suppleness and elasticity to the Sally Hansen La Cross complete line of nail, foot and grooming implements. When it comes to nail care, Sally Hansen is the #1 brand women know and have trusted for over 40 years!

Shira Accessories LTD Shira Accessories, Ltd continues to develop new fixtures and displays to better show consumers a product story at point-of-sale. The displays are simple and clean and representative of the products on display. The adjacent photo is an example of such a display. Half are toe rings and half are ankle bracelets. The display cards clearly depict a sketch of how the product is to be worn. This helps create a self service multiple sale by showing and telling the customer that both products go together and therefore usually purchased at the same time. Shira Accessories,Ltd is constantly developing new two- and three-piece sets; necklaces, earrings, bracelets, hair accessories, watches and multiple earring sets. All have carefully designed cards with clear information visible on the front regarding important details of the product; genuine shell, lead free, cubic zirconium, etc. This informs and educates the customer making them aware of how the item purchased was designed to be worn. Our goal is to make “self-service” shopping in your stores as easy as possible for your customer, making sure they leave satisfied with their purchase.

1928 Jewelry Company Circa 1900 – A 1928 Company 1928 has been in business since 1969 and remains privately owned and family managed. The 1928 Jewelry Company is based in Burbank, CA with a manufacturing facility onsite. 1928 prides itself on quality, service, integrity and true craftsmanship, with fair and reasonable pricing. Our line is vintage inspired, feminine and timeless. The 1928 line caters to fashion conscience woman that make fashion jewelry a part of everyday life. Our price points range from $5.99-$14.99 retail. All programs and styles can be customized for your particular clientele needs. The Circa 1900 line includes earrings, necklaces and bracelets. 1928 uses different metal finishes as gold, silver, brass, copper, jet, gold ox and rose gold. The styles use glass, acrylic, crystals, beads, hand painted enamels and mother of pearl. New designs are introduced monthly. This helps 1928 maintain its place as a trendsetter in the fashion jewelry industry.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Erkul Cosmetics Erkul Cosmetics/Golden Rose has been exporting its products to approximately 60 countries since 1983. (Among the products (color cosmetics) are powders, foundations, lipsticks, lipglosses, eye and lip pencils, mascaras, nail polishes, concealers, eye shadows, makeup and wet towel wipes, bath/shower gels, perfumes and deodorants and deo roll-on kinds) The factory is located in an area of about 50,000 sqm where production is performed by highly qualified staff of more than 400 people utilizing modern technology in every step of the production. Further information: All our products are dermatologically tested. We sell our products at EXW, Istanbul. Please be informed that we have been exporting our products to approximately 60 countries and our prices are pretty competitive; I believe you would surely agree once you are exposed to our products in the markets. We do accept bank transfers/cash payments. As for the delivery terms, we are quite fast even though we do not keep things at stock. Any production normally takes about 10 days to 2 weeks, depending on the availability of raw materials. We do have certificates from the Ministry of Health mentioning the conformity.

Crystallite Enterprises Crystallite is a leading manufacturer and supplier of Austrian Crystal Gifts and Jewelry. The appeal of crystal is timeless and our products have been proven sellers in the mass market for 20 years. We offer a wide array of prepacks and point-of-purchase displays to meet the needs of all types of retailers. Crystallite products create consumer excitement and impulse sales while utilizing only minimal space requirements. We offer competitive pricing, custom programs and displays, and a strong commitment to product excellence and top-quality customer service. Our Austrian Crystal Window Drops, Phone Dangles and Post Earrings are among our bestselling programs designed to offer our retailer partners with a unique and exciting product line with price points between $4.49 and $9.99. New for 2006, our Dangle Jewelry line features Swarovski Austrian Crystal and Pearls with hypoallergenic findings, all assembled in the United States. For additional information, please contact Allison Baeza, sales and marketing director, at (707) 765-0500, ext. 218 or email at alli_crystallite@sbcglobal.net.

Caboodles Division of Plano Molding Company Have Caboodles … will travel! Caboodles newest product offering is a line of stylish, soft-sided totes that are great on-the-go organization. These companions are ideal for travel ‘cause they’re loaded with pockets, pouches, zippers, a removable bag, and a touch-up mirror. These bags are designed to hold everything you need whether you’re traveling across town or across the world ~ these chic bags will take you there. We know being organized is the key to your success, and as always, Caboodles fulfills your every organizational need with our line of retro plastic organizers, our trendy train cases, our fashionable ultimate organizers, the coolest Crystal Clear acrylic line and now our stylish Caboodles Total Totes. Even our Caboodles heavenly bath & body collection comes in cute reusable containers making them completely versatile yet the bath product inside makes them completely playful! Caboodles is the complete ‘she’ brand and our Caboodles ‘C’ logo always stands for the ultimate in function, fashion, quality and affordability. Come ‘C’ us at www.caboodles.com! For additional information, please contact Ernie Lippman, vice president of sales and marketing, at (800) 451-2122, ext. 9496.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Sentinel Consumer Products Sentinel Consumer Products, Inc. has been a pioneer in the health and beauty care industry since 1905. Our century-old success story is built on a foundation of quality and value, and our groundbreaking use of color has solidified our position as leaders and innovators. Our unique product line offers consumers colorful options in five different categories: cosmetic care, cotton swabs, cosmetic fluffs, first aid and foot care. All of our more than 500 items are fresh and up-to-date, and all bear the colorful hallmark that sets our products apart at first glance. With manufacturing and distribution centers strategically located in Ohio, Utah and Alabama, we maximize efficiency and reduce shipping lead times to a minimum. Sentinel’s latest addition – Xfo™ is a multipurpose exfoliation pad containing a soft 100% cotton textured surface. Used alone or with a favorite lotion or astringent, Xfo™ is now the most costeffective approach to exfoliating the skin. The unique Xfo™ “cotton scrubbers” are available in four sizes: 80-ct. rounds, 80-ct. squares, 60-ct. jumbo rounds and 60-ct. giant squares. Contact Sentinel today! 7750 Tyler Blvd., Mentor, Ohio 44060, phone (440) 974-8144, fax (440) 255-5741, email scp@sentinelconsumer.com or visit our website at www.sentinelconsumer.com.

A.J. Siris Products Sicara cosmetic accessories features top quality brushes, puffs, sponges, implements and mirrors in feminine upscale packaging with reliable A.J. Siris shipping and service. Our newest items are two beautiful cosmetic brush sets. The large set features five full-size brushes in the most popular styles in a black and clear zippered case. The smaller set contains five travel size brushes in a foldover case. Both sets are packaged in a clear vinyl pouch, which can hang on a hook or stand on shelf. Look for our complete line of Sicara accessories and cosmetic/travel bags. Consolidating these programs with one vendor provides packaging continuity, category management, inventory and order processing efficiencies. Contact A.J. Siris now for full color Sicara brochures at (800) 526-5300, fax (973) 684-3251 or email ajsiris@aol.com.

Pacific World Corporation No need to make an appointment – Nailene™ brings a salon perfect French Manicure home with Hard & Healthy™ French Manicure Kit and Multi-Pack in fresh new shades that compliment all skin tones. Hard & Healthy™ French Manicure Kits and Multi-Packs include chip-resistant polish specially formulated to strengthen thin, weak nails and ensure long wear. Revlon® Fit & Pretty™ offers a safe alternative to other nail applications – and is also a great way to break your nail-biting habit. Featuring a pliable base that uniquely molds to the nail bed and cuticle for optimal comfort, while retaining an acrylic-like hardness at the tip to prevent chipping, Fit & Pretty’s™ short, natural shape will have everyone fooled. Flaunt your toes this summer season with Dazzle Toez – faux nails for your toes. The complete Dazzle Toez kit includes nail glue and 24 nails in 12 sizes allowing for the perfect fit – it even includes sizes for teeny, tiny toes! Application is easy – just glue and go for an instant salon perfect pedicure. Dazzle Toez are available in two shades – Pink French Toenail and Beige French with Flower. Dazzling!

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Tweezerman International For over 25 years, Tweezerman Personal Care tools have been the choice of makeup artists, models and celebrities. Last year, the company joined forces with cutlery giant, Zwilling J.A. Henckels to become Tweezerman International, and as a member of the Zwilling J.A. Henckels Group, positioned itself as the #1 premium personal care tool supplier in the world. With an extensive line of award-winning tweezers, manicure, pedicure, facial and unique beauty tools, Tweezerman offers the premier “best” brand in a good-better-best merchandising strategy with upscale packaging, eye-catching displays, promotional support and acclaimed “free sharpening” guarantee. As the most featured implement line in leading beauty and fashion magazines, Tweezerman supports the brand with national advertising in well known publications including Allure, InStyle, Good Housekeeping, plus teen segment magazines. In addition to receiving recognition for innovative products, Tweezerman has been recognized for its many social responsibility efforts. One notable example is the company’s annual educational and charitable campaign on behalf of Breast Cancer Awareness through the sale of Tweezerman’s Limited Edition Pink Ribbon Tweezer. Based in Port Washington, N.Y., Tweezerman’s commitment to quality, customer support and service continues to be the cornerstone of their corporate concern. For further information, call (800) 645-3340.

Dana Classic Fragrances, Inc. Celebrating an incredible 73-year history, Dana Classic Fragrances, Inc. is the second largest mass fragrance company in the world. Dana manufactures, sells and distributes some 50 brands worldwide, including Chantilly, Tabu, Love’s Baby Soft, English Leather, British Sterling, Canoe, Heaven Sent, NaVy and Toujours Moi. These legendary brands have shown unprecedented brand leadership throughout their history and continue to excite consumers worldwide with their classic scents and timeless appeal. “Classic cool” Love’s Baby Soft continues to land in the hands of today’s hottest teen celebs. Celebs range from pop phenomenon Hilary Duff to Desperate Housewives star Andrea Bowen. Love’s has been spotted at the hottest teen events like The Teen Choice and Nickelodeon Kid’s Choice Awards. Complementing the women’s fragrance line, Dana men’s brands have a distinctive heritage, with its iconic wooden cap, English Leather has consistently been one of the top ten fragrance brands in the mass market. Never out of style with celebs, MTV’s Cribs recently featured Livan Hernadez’s (Florida Marlins, 1997 World Series MVP) home vanity showcasing English Leather as one of his “it” fragrances. Classic and authentically masculine, this successful men’s brand is on-trend with its new collection of deodorants and body sprays.

L’Oreal USA Consumer Products Division Age Perfect Skin-Supporting and Hydrating Makeup SPF 12, a L’Oréal Paris beauty breakthrough, combines skin care and cosmetics technology in one foundation specifically formulated for the needs of women 50+. With the help of Marine Collagen and Dermo-Peptides, Age Perfect Skin-Supporting and Hydrating Makeup SPF 12 actively supports mature skin by restoring elasticity and resiliency, making skin appear younger and more toned. The formula’s intense moisturizers, vitamins B5 and E and SPF 12 also keep skin moisturized, conditioned and protected. Age Perfect Skin-Supporting and Hydrating Makeup SPF 12 is ideal for mature skin because of its lightweight, soufflé formula featuring patented elastomer technology that won’t settle into fine lines and wrinkles. It blends away imperfections and brightens skin tone with light-perfecting pigments and brightening botanical. In 12 shades, Age Perfect Skin-Supporting and Hydrating Makeup SPF 12 also includes a skin-perfecting foundation brush – a first for the mass market – that works with the contours of the face and blends naturally for flawless application and a radiant finish. Available August 2006 at chain, drug and mass market retail outlets at a suggested retail price of $16.59.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Beauty 21 Cosmetics/ARISSA Studios For over 20 years, Beauty 21 Cosmetics, Inc. has been dedicated to bringing high-quality cosmetics to consumers with low pricing in mind. LA COLORS retails from $1.00-$2.00, giving the consumer an opportunity to have high-quality cosmetics at a reasonable price. Available in open stock or carded packaging, we carry all categories, from face to nail, designed to meet a women’s every cosmetic need. LA COLORS is nationally distributed to over 14,000 doors. With ARISSA STUDIOS, we offer department store cosmetics at mass retail prices. ARISSA STUDIOS is designed with soft touch componentry and upscale packaging, appealing to today’s savvy consumer who loves to look and feel prestigious and elegant. With the introduction of hot, new, trendy promotional items, presented on elegant, eye-catching black acrylic displays, ARISSA STUDIOS is sure to draw in the consumer and keep her coming back for more. ARISSA STUDIOS has always been individually packaged in its own retail box, however, due to an overwhelming demand, we are also offering this beautiful prestigious line as a carded line. ARISSA STUDIOS has been seen in many top fashion/beauty magazines, such as Allure, Elle, Marie Claire and Shop Etc. ARISSA STUDIOS is made in the USA.

CRL Marketing, Inc. CRL Marketing, Inc. is a revolutionary cosmetics manufacturer, integrating top-quality products with eye-catching colors, packaging and affordable pricing. Targeting the Y Generation, CRL Marketing’s Jesse’s Girl, Sizzle and Yakity Yak brands offer an exciting array of products in the latest and most fashionable colors that satisfy the needs of today’s working women and their inner weekend warriors. With products including cream and pressed eye shadows in uniquely designed “eye compacts,” a full 24 shade line of nail enamel, moisturizing lip oils creatively packaged with flower blossoms, and their bestselling Eye Dust, offered in 21 vibrant and alluring colors, CRL marketing has been successfully winning the hearts of women in the 18 to 35-year-old demographic. Teamed with select mass market retail chains, CRL Marketing has set a standard of quality and excellence with their products and competitive price points. Be it with their sexy, yet subtle, Liquid Glass Lip Gloss, Shimmer n’ Shine roll-on eye shadow, quality cosmetic brushes or the fulfilled promise of a new world of color for today’s modern woman, the brands of CRL Marketing are a surefire hit catered directly to your needs. For more information, please contact Jesse Lawrence at (919) 693-9620.

Paris Presents Beautiful nails are now a style “must-have.” Fast-paced lives create a growing demand for nail care products that let women do their own nails easily. That’s where the “nail divas,” Ms. Manicure™ and Ms. Pedicure™ from Paris Presents, Inc. come in. Designed for on the go, both lines offer highquality nail tools and “all you need” solution sets – great for hand-to-toe quick repairs or complete manicures and pedicures. Both lines also answer consumer demand for fashion, fun, function and affordability – bringing department store cachet and image to the mass channel. Ms. Manicure and Ms. Pedicure bring freshness to the nail category by understanding that nail care implements are fashion items, just like nail polish. The Ms. lines stand out in the category with innovations like non-slip, ergonomic grips for ultra-easy use and precision blades for perfect results. Each item comes with step-by-step instructions and helpful tips and hints written in a savvy, girlfriend tone that keeps consumers running back for more. All these benefits add up to incremental purchases and impulse gift shopping – which equals increased profitable sales for retailers! Don’t “MS.” out! Call Jeff Nitzkin at (847) 263-5500!

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

SFI Specialty Fragrances, Inc. Specialty Fragrances is an affiliate company of Perfumes Etc. Ltd. We are distributors of prestige, masstige (mass market value) fragrances and alternate designer fragrances. Our customers include prestige stores, drugstore chains, mass retailers, specialty stores, deep discount stores and dollar stores. We have offices and affiliated companies worldwide. Our masstige line includes world famous products of Arome Concept France, Alta Moda, Jean Louis and Shirley May. The retail prices range from $1.99 to $9.99. In brand name fragrances, we represent prestigious companies such as LCI, Elizabeth Arden and Riviera Concepts in the secondary markets. Our global presence gives us the capability to handle and deliver any size of order to anywhere in the world. We market some of the most popular alternate fragrances that include ‘American Impressions’ and the ‘FIL (Fragrance Impressions Ltd.)’ range. These products are sold in many large chains all over North America. One of the services we provide to our chain store customers is designing individual planograms that encompass prestige, semi-prestige and masstige fragrances. We do drop shipments for many wellknown Internet companies. Our IT system allows live access to these companies to our inventories. Please visit our website, www.specialtyfragrances.com, for more information.

Illusions International Inc. The Allure program has been designed to maximize sales in a drugstore environment. Historically costume jewelry has been a difficult category for drugstores. This is changing with the arrival of the Allure program. It’s profitable and consumer safe with all jewelry being lead free. The Allure brand offers the best opportunity to build a successful program in the new billion dollar category. Your customers are offered a great selection of the most important core classic and fashion SKUs between $5.99-$9.99 retail. Allure is marketed with the pictured display. The exclusive space saver display and floor stand are an innovative, high-impact merchandising system that increases traffic to section categories and drives sales. They have been designed to maximize your sales per square foot Allure, A Proven Program to Drive Incremental Sales and Profits. Contact Robert Pal at (416) 934-5170, ext. 23 or rpal@illusionsinternational.com.

The Bonne Bell Company The Bonne Bell Company®, the first and favorite cosmetic company for tweens and teens, markets the leading cosmetic brands Smackers® and BONNEBELL®. Its loyal customers span multiple generations of daughters, mothers and grandmothers. Building on more than 75 years of brand equity, the best flavors in the marketplace and unique packaging, The Bonne Bell Company consistently launches some of the industry’s most innovative products. The Smackers brand enables tweens to discover the fun and flavor of being a girl. The longstanding favorite Lip Smacker® has inspired new Smackers initiatives including a brand new line of hair care and bath and body products. In addition, strategic partnerships with key brands have resulted in successful product launches such as Starburst®, Skittles®, M&Ms® and now Coca-Cola™ brand flavored lipglosses. The BONNEBELL brand has also built on successful franchises such as Lip Lites® to create new products including the innovative Kiss This Gloss™ and the VitaGloss2O® family of vitamin-enriched lipglosses. These products and so many more have inspired teens everywhere to enhance their natural beauty with BONNEBELL. The Bonne Bell Company is committed to delivering outstanding sales, profits and GMROI for our valued retail partners. For more information, go to www.bonnebell.com or www.smackers.com or call Scott Sumser at (800) 321-1006.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Merz Pharmaceuticals Appearex is the #1 dermatologist- and #1 pharmacist-recommended product for strengthening nails. Appearex is changing the way your customers think about nail care! A once daily supplement, Appearex strengthens nails from within. It contains pharmaceutical-grade biotin (a B vitamin) at the clinically proven dose to strengthen nails, smooth brittle ridges and produce firmer, healthier nails. Appearex is supported by a national print campaign, online advertising, intensive public relations efforts and a national team of sales reps who detail to dermatologists, driving sales to your door. Appearex customers are loyal, coming back again and again. One out of four consumers who try Appearex, stay on Appearex for at least seven months! New for 2006 – our new four-week and 12-week packages. The look to our packaging is “new and improved,” with a high-end look designed to stand out and raise the value of your nail care planogram. Add Appearex to your nail care planogram for high profits and strong turns. Co-op programs may be available.

Vapon Inc. Fashion-Fix Tape Prevents Wardrobe Malfunctions! Background – Vapon, Inc. has been making TopStick® Hairpiece Tape for over 50 years. Besides being the premier tape for wig applications, it has been used for years by professional costume designers, motion picture makeup artists, audio and video professionals and the hottest new couturiers. Many of the new fashions hang loosely on the body and need some help to protect modesty. Many designers rely on TopStick® to keep their designs looking great. Professional Use – TopStick® is the product of choice for thousands of these professionals. Listen to the award shows and you’ll hear the name TopStick® over and over again. Up till now, it has been an insider’s secret. Several products have tried to duplicate the success of TopStick® but the special medical quality adhesive tape created for TopStick® is unrivaled in quality and performance! New Product Launch – Vapon is pleased to announce that they are introducing Fashion-Fix™ for the retail market. Fashion-Fix tape has all the great properties and performance associated with the original TopStick® product but an innovative, new, feminine package design and retail availability makes it perfect for today’s active woman.

Prestige Cosmetics Prestige Cosmetics is a full color cosmetic line recognized globally as a trendsetter in product development, color assortment and merchandising. A close relationship with the fashion industry and an on-trend creative marketing team translates runway fashion direction into wearable lip and eye shades for women of all color. Prestige’s image campaign, “Colorforall” speaks directly to the multicultural consumer with highimpact graphics. The brand is supported with print advertising in expanded major magazine titles, aggressive PR and a new, updated interactive website is currently under construction. For 2007, Prestige continues to innovate with exciting new products and promotions focusing on the eye, lip and bronzer categories. Our breakthrough new merchandising display system continues to wow the consumer showcasing our product in the best light. For more information, please contact Marc Orlinsky, vice president of sales, at (800) 722-7488 or mo@prestigecosmetics.com.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Connoisseurs Products Corp. Connoisseurs introduces an exciting new line of jewelry cleaners: Connoisseurs Revitalizing Jewelry Cleaners. At Connoisseurs, we continue to give our jewelry cleaning products a whole new complexion. Through the use of cosmetic colors and graphics, all of our new Revitalizing Jewelry Cleaners have the look and feel of luxurious personal beauty products. This new look has strong appeal on shelf and will be a dazzling complement to your business. Our new, regular Revitalizing Jewelry Cleaner has an elegant deep red jar, a pleasant fragrance and a clear cleaning solution that delivers more brilliance to diamonds, precious stones, gold and platinum jewelry. Our new, Revitalizing Silver Jewelry Cleaner has a bright silver jar and a formula that instantly removes tarnish from sterling silver jewelry. And, our Revitalizing Delicate Jewelry Cleaner has a salmon pink jar with a formula that will bring new radiant sparkle to opal, coral, onyx, turquoise and semiprecious stones. In addition, the new shape and size of jar used for all of these new products means less chance of getting your fingers wet during use. All in all, Connoisseurs new line of Revitalizing Jewelry Cleaners produces a dramatic increase in point-of-purchase impact appeal for the category.

IPD IPD Inc. is a North American Distributor with offices in Greenwich Conn. and Toronto, Canada. We specialize in, but not limited to, European fragrances, cosmetics, skin care and bath lines for the select and broad retail distribution channels. We market and distribute such brands as: Musk by Alyssa Ashley, Fizzy, CocoVanilla, Dama Cosmetics, BodypHase, Core BattiCuore, Le Jardin and other select niche products. For further information, please contact Brian Davies or Warren Butler at IPD Inc., One Sound Shore Drive, Greenwich CT 06830, telephone (888) 952-7453, email warrenb@ipdfragrance.com or briand@ipdfragrance.com.

Nicka K. Cosmetics Nicka K. Cosmetic Company has proudly introduced a full line of professional artist collection and succeeded in distributing throughout the United States. All the colors come in a variety of vibrant colors. The nail polish is long lasting without ever chipping away; our lipstick contains vitamin E to moisturize for healthier lips; lipgloss has loads of colors and fruity scents; pressed powder has feather light smooth texture that blends in all skin colors; vast selection of blush and eye shadow is a good way to start to become innovative artist. The Nicka K. Professional line is offered at an incredible quality and an amazing value price point. Nicka K. Cosmetics is the brand that satisfies everyone. For more information, contact us at (800) 671-9100 or visit us at www.nicka.com.

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VES MARKETING INITIATIVES MARKETING INITI Jean Philippe Jean Philippe Fragrances introduces an exciting line of bath and body products under the Johnson Parker label. Quality Formulations, attractive packaging and an extensive selection of products will make the Johnson Parker line of bath and skin care products a market leader across all trade classes. For more information, please contact William Dachille at (800) 533-6010.

Belcam Inc., Delagar Div., Denco Div. “The Best Alternatives to the Originals” – a credo we at Belcam have long been committed to in developing our line of men’s and women’s alternative designer fragrances. We use high-quality essential oils to ensure our versions are long lasting and that they deliver the fragrance notes of the original. We are constantly introducing new fragrances to keep our customers current with the hottest designer introductions. Our lineup includes versions of the latest men’s and women’s fragrances as well as perfumed body sprays. To support our line, we offer a variety of impactful merchandising vehicles (counter displays, sidekicks and floor stands) that are functional and provide strong shelf presence. Our latest launch, So Simple, is a version of Lovely Sarah Jessica Parker*, one of Oprah’s favorite things in 2005! So Simple is a classic feminine scent, a musky floral combining notes of lavender, rose, jasmine, patchouli, musk and sandalwood. An alluring and timeless fragrance with strong consumer appeal, for women of all ages. To find out more about So Simple or the other fragrances in our line, including the new launches planned for fall 2006, please contact Paul Bellm at (800) 948-9281, ext. 1028 or email at pbellm@delagar.com.

Physicians Formula Cosmetics Physicians Formula®, Inc. which has consistently introduced the most innovative and non-duplicating products with tremendous success, is now at the forefront of the hottest innovation in cosmetics – mineral makeup. Minerals have been used by ancient civilizations for their healing properties. Now, Physicians Formula® has incorporated good-for-you minerals into Mineral Wear™, an entire line of mineral makeup specially formulated for sensitive or breakout skin. Physicians Formula® knows that for sensitive skin, less is more. Less ingredients, that is. And many minerals are known to have anti-inflammatory properties. That’s why they have created Mineral Wear™ Talc-Free Face Powders – in both loose and pressed forms, which are infused with ultra-fine minerals so gentle that they help minimize the risk of irritation while still providing natural-looking coverage. They’re also the perfect powders to provide a smooth, ‘’second skin’’ feel and finish. Mineral Wear™ Talc-Free Powders are available in six shades. For more information about Physicians Formula®, contact Jeff Rogers, senior VP of sales, at (626) 334-3395.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

American International Industries The Eyes Have It: New From Andrea™ And Ardell™ – Ardell™and Andrea™, the leaders in lashes, offer an alluring selection of introductions, certain to catch the eye. First, Ardell DuraLash Eyelash Extension Kit is an at-home kit and the only one of its kind. With the DuraLash Eyelash Extension Kit, women have everything needed to achieve salon-quality, lush, lasting lashes. DuraLash Individual lashes, adhesive, adhesive remover, tweezers and detailed instructions make for smooth application and stunning results. Designed to complement faux lashes, Lash Magic Blending Mascara is another first. Uniquely formulated to blend natural lashes into faux lashes without clumping, water soluble, easily removed, Lash Magic comes in beautiful black or brown. Fantasy Lashes give new meaning to “eye-opening.” In six dramatic styles and glamorous colors, Fantasy Lashes are otherworldly accents, worn on top or bottom – or both! Kit includes adhesive, tweezers and a Fantasy Shimmer Stick. Costume party perfect. For timeless eye elegance, Ardell introduces the Little Black Dress Kit. At half the length of traditional lashes, these lashes are eye accents, intended for the outer corners of the eyes à la Audrey Hepburn. Two styles – one classic, one glittery – plus adhesive and tweezers. Ardell™ and Andrea™ are divisions of American International Industries. For more information, visit www.aiibeauty.com.

Gamut Inc. At Gamut, not only do we think outside the box ... but we are also concerned with what goes inside our box! For over 13 years, Gamut has been providing customers with “an entire range of products to profit by.” At Gamut we take pride in finding unique trendy items then packaging them in fast turning, highly profitable prepack displays. Products under our Hollywood Color Company brand have ranged from the highly successful Chinese Wooden Backscratchers to fashion trendsetting Austrian Crystal Jewelry to our Plush Animal Purses (Plushies). All have continued to grow in sales and popularity with consumers and our customers alike. Other items that have been widely popular are our Wooden Mannequin Jewelry Holders, Crystal Perfume Bottles and our Magic Scarves, this only scratches the surface of the variety of niche items in the Gamut arsenal. Our commitment to high-quality products and excellent customer service has made Gamut a sales leader on the West Coast and “rising star” as we move our way east. As Long’s, Bartell’s, Walgreen’s, Savon/CVS and more can affirm whether your needs be basic stock, incremental, promotional or seasonal sales, you can count on Gamut to fill those needs. Gamut is the “king of niche items.”

Pantina Cosmetics Inc. 2005 proved to be a successful launch year for Pantina Cosmetics. Taking the industry by storm with its edgy and modern packaging nationwide and winning over the most discerning beauty editors. Innovation and stylish packaging are still on the forefront for Pantina. Pantina understands continues forth with the philosophy that women do not need to spend a fortune on makeup – nor, do they need to feel embarrassed by pulling out a lipstick from their bag because it was not bought at a department store and therefore has dull packaging. Our mission: To develop creative prestige products at affordable prices. Our products contain the finest ingredients, they are multitasking and the colors are all on trend using the latest technology. Our packaging continues to be a strong selling point – beautiful and modern. To learn more about this fast-growing brand, please contact Richard Desantis at dick.desantis@pantina.com or call us at (866) pantina, ext. 110.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI I.M.P.A I.M.P.A. – World‘s Best Pumice Looking after your feet is as important as taking care of any other part of your body. If you want to make your feet soft, clean and gentle in touch, try the World’s Best Pumice. It is offered by I.M.P.A. We have over 20 years of experience in the production of the pumice accessories and the biggest share of the Polish market. We satisfy the needs of our customers in more than 30 countries worldwide. If you look at www.pumice.pl, you will find a description of a wide range of types of I.M.P.A.’s Pumice in different colors, sizes and shapes. From rectangular pumice full, to the one in the shape of a fish, moon, ladybird, heart, snowman and bear. From pumice foot with rope, through pedicure handles, foot file to pumice brush and the latest body scrub Pumice Powder. I.M.P.A. always meets the expectations of the customers who search for the best quality pedicure and manicure items offered at the reasonable price. It concerns both the professionals (private label) and the final consumers. After all their purpose is immediate young skin effect of the best feet treat.

Mirage Cosmetics, Inc. Mirage Cosmetics, Inc. has been known as a company with great colors with their SinfulColors full cosmetic line. SinfulColors offers the consumer the best color selection in the industry. Mirage is now relaunching SinfulColors with completely new unique upscale department store packaging, high department store quality and new products. We will have a completely new eye-catching look that our research has told us the consumers will love. We are offering department store cosmetics to the mass market, at mass market prices. This is not the SinfulColors you have seen before. This is a really unique new program that you will not want to miss seeing at the ECRM EPPS event.

IdeaVillage Products Corporation IdeaVillage is a leading developer and marketer of “As Seen on TV” products. The company is also the “As Seen on TV” category advisor to many of the nation’s top retailers. Specializing in two-minute infomercials, IdeaVillage has launched eight #1 TV products in the last five years. These include the Finishing Touch personal hair remover for women, the nation’s #1-selling personal appliance at mass market retailers and drug chains in 2005; the Micro Touch men’s personal groomer, the nation’s #2-selling personal appliance at mass market retailers and drug chains in 2005; the Pet Groom Pro ionic pet brush; the Laser Straight laser-guided leveler and the Spin Spa spinning shower brush. In addition to extensive national TV advertising, IdeaVillage products are supported by print advertising in major beauty and fashion magazines, Free Standing Insert (FSI) coupons, several forms of Internet advertising (including search optimization and banner advertising on major networks) and PR to editors at major publications nationwide. For more information about IdeaVillage products, contact Mike Govindani or Tim LaSecla at (973) 808-7355.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Brandon-Femme Inc. The Latest in Beauty Innovations: Brandon Femme Co., the leading manufacturer of 5X,7X and 10X magnified mirrors, among other cosmetic accessories, is pleased to offer our newest and most highly demanded products. We have developed a line of high-quality magnified mirrors for the drugstores, which were only previously available to high end boutique and beauty supply stores. Our 5X, 7X and 10X magnified mirrors are the newest technology in the magnified mirror market. These mirrors, which reveal the true beauty of one’s skin, have seen an increasing demand. Additionally, we now offer these magnified mirrors in two packaging options. The first option is the classic glass showcase presentation, which contains the mirrors packaged in boxes. Our second option is the clamshell hanging package. Kabuki makeup brushes are the latest trend in cosmetic applicators. These brushes are now heavily advertised on TV and up to just recently were only available at salons at a premium. Brandon Femme is now offering this exclusive product line to mass markets and drugstore chains. For more information on these and our other product lines, contact Sid Afari at (800) 228-2984 or at info@brandonfemme.com or you can visit our website at www.brandonfemme.com.

Diversified Distribution You can buy a more expensive cosmetic brush, but not a better one! Diversified Distribution is an integrated source of fine cosmetic brushes from our ISO USA warehouse, to DD Hong Kong Inc. to our direct China factory. Hair and synthetic fiber are purchased directly. Quality control is total, preproduction QC, China production QC and final USA QC. DD is C-TPat certified for import items. DD also offers bath accessories, stainless steel implements, new “soft touch” pedicure implements, magnification mirrors and pedicure/manicure specialty kits. An assortment of gloss, crayons and lip plump colors are offered to the European market only. Our team of sales, design artist and purchasing will create account-specific assortments to fit your customer needs. You are never limited to any style when you work with DD – even in private label! We are excited to present to you how so many retailers are increasing their sales by improving product quality and selection and still driving up their profitability. Let us show you how! Thank you, Kathleen Schulte, VP sales. Please contact ks@divdist.com.

Baylis & Harding PLC (UK) Baylis and Harding are synonymous with innovative product design, launching new products and ranges every year Baylis and Harding are at the forefront. Our funky designs, supported by quality formulations and formats continue to cater for consumers across the globe. Exceeding expectations is our business, with popular ranges such as Gotcha Girls, Beauty Babes and many new ranges for 2006, we continue to supply to all consumer needs. We embrace technology and our working environment is fast and fun. Our production facilities around the world are controlled by our team of vigilant quality managers and in-house team of industry experts in global sourcing and together Baylis and Harding have over 50 employees working in the United Kingdom and overseas. Based in the United Kingdom, we would welcome you to our offices and distribution center. We would also welcome you to our Asia office in Hong Kong. Not only does this office boast a fantastic view over the harbor but we have a showroom full of great things to look at too. For more information, contact Tania Fossey, creative director, by email at tfossey@bayhar.com or by phone at +44 1527 505000.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Lotta Luv/Magique Building on the over 30 million pieces of the bestselling candy-flavored licensed branded lip balms and glosses that Lotta Luv has sold to the marketplace, we are now pleased to introduce the following new products targeted for specific age and demographic groups. Young Children’s Market – Character licensed lip balms and glosses including Disney Princess, Nemo, Pooh, Peanuts and Care Bears. In addition, we are introducing patented light-up wands, wands that spin, and candy/lipgloss combinations for this group. Teen/Tween Markets – More licensed flavored gloss items that incorporate unique packaging and patented applicators; “Locker Lips” licensed flavored lip balm in magnetic tubes: Jolly Ranch and Hershey Kissable flavors are some of the featured new items and flavors. Adult Markets – Licensed, flavored, vitamin E-enhanced moisturizing lip gels; coffee and cocktail balms; licensed soft drink-flavored balms in mini pop cans; martini and smoothie-scented bath gels. Lotta Luv remains the leader in bringing novelty lip care products with innovative and unique licensed flavors, packaging and displays to the retailing community. We also have the capabilities to “custom” create unique and exclusive products to meet your special needs.

Intercos America Intercos showcase will be including up to nine different complete product lines to meet your needs in terms of makeup and skin care, targeting all skin types and make up needs. With 30 years experience in the cosmetic industry, Intercos product offering will provide a new excitement in the private label environment, combining innovative and quality product to all market segments. We look forward to surprising you!

Shalom International Corp. Shalom International Corporation is a company 45 years strong! We design, develop and market a wide product assortment to a broad array of retail levels including mass market, dollar stores, mall specialty chains, catalogue and better department stores. Our trendy product lines include hair accessories for all markets, infant accessories, infant swimwear, infant soft lines, junior and tween cosmetics, jewelry, junior belts and small handbags, leg wear, body wear, gift bags and a full line of holiday ornaments. Shalom has the complete accessory package for every customer. Shalom has experienced enormous growth in private label product development. We work directly with retailers on multiple levels. Whether it is bringing the initial concept to a buyer’s attention and developing the item from the ground up, or sourcing a given item for specific retail. Shalom has the design, sourcing and marketing ability to meet any retailer’s request. It is our commitment to our retailers and customers that we never lose sight of our goals. We are always striving to be better than we were before. We are committed to excellence.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

The W.E. Bassett Company As the USA and world leader in our category, we are excited to unveil our new products and initiatives at the ECRM EPPS Cosmetics event. At W.E. Bassett, we have developed more than 60 new SKUs for our brands including Trim, Comfy Fit, Gem and PEDx. Included in those brands are implements, artificial nails, foot care and HBC consumables. All of our programs and products are designed to meet our basic market strategy of high quality and innovation for the value price segment with unmatched retail margins. We are the total solution to GMROII maximization within both nail and foot care departments. For a custom program to fit your needs including a Nielsen-based review, please contact us at (800) 394-8746, ext. 318.

Markwins Beauty Products Markwins® North America is a global consumer products company that has been providing expertly designed cosmetic and beauty care collections for almost two decades. Its cosmetic product brands, marketed in over 70 countries worldwide, include: wet n wild®, Fresh Face®, Black Radiance®, Tropez®, Jonel®, Bratz®, The Color Workshop® and SOHO®. Markwins, not only offers the #1 value cosmetics brand in the country with wet n wild, we are also the leader in seasonal blockbusters, youth and adult cosmetic gift sets, bath sets and cosmetic bags. With the powerhouse Bratz license, we continue to offer the greatest variety of value programs to the consumer. As a vertically integrated company with a well established history, Markwins offers the best ROI supported by our own manufacturing facility. Through innovative thinking and bold package design, coupled with world-class quality cosmetics, Markwins continues to fuel a revolution in beauty that is expanding around the globe.

U.S. Cotton, LLC U.S. Cotton, LLC will mark another year of product innovation and category advancement throughout the cotton category. These innovations will reach across our branded and corporate brand banners. In our cotton round segment, Swisspers® brings new innovation to cotton rounds with a dual textured and patented edge product. There will be additional sizes as well, a large square and large oval. For corporate brands a new spunlace technology awaits. This spunlace technology increases the strength of the pad and is very soft. This technology is also available on the square pads. In our cotton ball segment, all brands can benefit from our new Super Jumbo Cotton Ball. This cotton ball is much larger than the standard jumbo cotton ball and is a hit with all consumers. In our cotton swabs segment, back by popular demand, the wooden stick swab. This swab is great for everyday use and is also used by crafters and technicians. We also introduced swabs in vanity containers both square and round for those with distinguish tastes. U.S. Cotton, LLC is committed to our partnerships with our customers who motivate our product innovation, category advancement and growth. For more information, contact U.S. Cotton, LLC at (800) 888-0747 or visit www.uscotton.com.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI CCA Industries Inc. Nutra Nail, simply, beautiful, natural nail care … Nutra Nail® is one of the leading brands in food, drug and mass store chains; offering a full line of unique nail care products designed exclusively to treat natural nails. The products include growth formulas that are non-enamel with naturally based ingredients for maximum nutritive benefits and a range of strengtheners and hardeners with latest high tech ingredients free of toluene and phthalates. In 2006 and beyond, the brand will continue its commitment to developing new unique formulas that are high performance, as well as eco-friendly. Nutra Nail® is proud to announce the success of its 2005 breast Cancer Awareness promotion allowing us to donate over $77,000.00 to the Young Survival Coalition (YSC) to help fight breast cancer. The YSC is the only international, nonprofit network of breast cancer survivors and supporters dedicated to the critical concerns and issue unique to young women and breast cancer. Nutra Nail® recognized the need to help bring awareness to this cause and has banded together with retailers to set up promotional activities supported by displays announcing this fundraiser. The campaign will become an annual event and will be available again for 2006. For more information, contact Joel Last, VP sales and trade development, at (800) 524-2720, ext. 197.

NYX, Los Angeles Inc. NYX was the “Goddess of the Night” from ancient Greek mythology. You too can become a goddess, by using NYX Cosmetics! NYX Cosmetics offers a different way to approach consumers that want better, for less! Consumers want department stores cosmetics but many can’t afford them. NYX offers the classic upscale black and clear package with a simple NYX on the face and very affordable SRPs. NYX has eye-catching displays that “immediately attract” consumers while shopping in your stores. The classic packages ask them to “check me out.” The price says “buy me.” Once your consumers “buy and try,” the quality will bring them back to your stores to buy more of this great family of color cosmetics. NYX also offers to you incredibly unique metal modular table displays, inline sets, basic countertop displays, smaller seasonal displays, a new Hispanic set and many new products in 2006. This vast array of eye-catching displays asks your consumers to buy and try. Don’t let your very important consumers go to your competitors to buy NYX. Stock and sell NYX Cosmetics in your stores! For more information, please contact Dave Burkman, national sales manager, at (866) 699-1004 or email to dburkman@nyxcosmetics.com.

California Accessories California Accessories has 70 years of experience in providing high-quality, fashionable and colorful accessories to the retail marketplace. The company manufactures and distributes an extensive range of products including ladies handbags and cosmetic cases; eyeglass and sunglass cases; reading glasses; desk and dresser accessories; superb lens cleaning solutions and cloths; contact lens accessories and eyewear chains and cords. California Accessories provides retailers big and small with fun and fashionable accessories that add color and style to any product offering. The company is also a major provider of private label and OEM products to a variety of industries.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIVE A showcase of products and companies

Rich On Cosmetics We are an experienced cosmetics manufacturer and wholesaler. Our company has been in the cosmetics industry for over 20 years. We feature fashion handbags and purses that contain cosmetics products, as well as gift sets designed with various assortments of makeup items inside. Our makeup kit products vary in their different shapes and sizes and usage focus. Our new lines of makeup kits combine form and function. A good example would be our lady handbag collections. These handbags open up to assorted makeup collections. You can use the handbag for storage of your regular day items, or you can use it as a makeup kit. The attractive bag design makes this item suitable as a gift item. Our other makeup design consists of large square or rectangular boxes with assorted arrangement of makeup items inside. This is also an excellent item for the gift season. Our products are seen from as far away as Hong Kong, Indonesia, Australia and Europe. Our primary market is in the United States and the south Americas. Our products can be seen in Thrifty Stores, Wal-Mart of Mexico, Sav-on, 99cents Only Stores and many beauty supply stores throughout the country.

Lipology LIPOLOGY – “The Science of Beautiful Lips” Advanced Beauty Labs introduces Lipology, offering an unprecedented breakthrough solution for lips. Lipology fuses advanced science with beauty and is the single revolutionary “lips only” line that offers beautiful results without a prescription. First to market, Lipology is formulated with a proprietary blend of cell renewing ingredients to protect, repair, heal and enhance. A real alternative to medical and spa treatments, each one of Lipology’s products feature unique complexes that deliver multiple benefits without the risk of irritation or surgical side effects. Powered by the science of collagen peptides, nature’s plant extracts and vitamin rich antioxidants, Lipology is poised to fill an important niche. Lipology’s Glyco-Protein Collagen Booster stimulates the lip’s natural production of fibronectin, a glycoprotein that is key in helping to smooth, renew and heal lips on a cellular layer. Unique encapsulated delivery systems bring high performance ingredients in rich luxurious formulas. Each product features formula icons that display the products unique technology. Finally “Beauty has its Benefits.”

Sheralven Enterprises Brand name fragrances, miniatures and gift sets. Sheralven Enterprises LTD. is a full-service distributor of brand name fragrances. We have been supplying product to the domestic and international markets for the past 28 years. We pride ourselves on our large selection of new, unique and hard to find fragrances. Sheralven’s product line consists of well over 2,300 different SKUs, which is the largest selection of brand name fragrances in the industry. Our product line consists of Bulgari, Calvin Klein, Cartier, Christian Dior, Elizabeth Arden, Estee Lauder, Giorgio Armani, Gucci, Guerlain, Lancome, Liz Claiborne, Lancaster, Givenchy, Perry Ellis, Ralph Lauren, Versace, Yves Saint Laurent, etc. Strengths: Highly competitive prices, marketing and strategic expertise, bar coding – UPC capable, EDI capable, clam-shell packaging. For more information, contact Sheralven Enterprises LTD., 41-17 Mercedes Way, Edgewood, NY, 11717 at (631) 667-6500, fax (631) 667-2757 or visit www.sheralven.com. Primary contact is Steven Koss, president, ext. 224, email skoss@sheralven.com. Edward Koss, chairman, ext. 225, email edward@sheralven.com. Dana Ladd, assistant to the president, ext. 235, email dana@sheralven.com.

ECRM Focus • Volume 2, Issue 15

VES MARKETING INITIATIVES MARKETING INITI Kiss Products, Inc. Kiss Products, Inc. is the U.S. leader in the artificial nail category with a combined market share of 67% between two brands, Kiss® and Broadway Nails®. Is it any wonder that Kiss would look to expand its reach into related categories with the launch of RED by Kiss™ into the implement and small appliance categories. RED by Kiss™ was introduced in 2005 in a small group of U.S. retailers. Based on RED’s outstanding performance, it has gained significant distribution in 2006 and is showing steady growth. It is RED’s mission to offer the highest quality implements and small appliances at the best value to the consumer. All of the implements include a lifetime guarantee and free sharpening. Each tool is strengthened through a double-hardening process. Every single implement and small appliance is quality inspected before leaving the manufacturer to ensure consumer satisfaction and repeat purchases. The RED ‘high quality, great value’ positioning is a propos to today’s consumer needs and its performance shows it. Another line to watch from Kiss Products, Inc., always the leader with innovation and news. For more information, visit redbykiss.com.

Bump Creative Partners Bump Creative designs and imports fashion accessories. A unique company with years of experience in mass merchandising, product development and importing in the cosmetic accessory and bath category. Bump’s “behind the seams” fashion accessories includes embellished bra straps for strapless bras, bra charms clips, fashion tape, rhinestone studded accessory cases, cosmetic bags, silicone inserts, nipple covers and much more in very unique packaging. The product distinction is in the packaging. Each product has a uniquely designed package that is trendy and fashion forward. This category is new to mass retailing and has had great response from Canadian retailers. An array of various options are open to the retailer including counter displayers, permanent fixtures and floor stands. We include point of sale material to support the product and seasonal prepacks, which include seasonal fashion colors and products to enhance the line. The major retailers that currently carry our products are those found in the Canadian retail marketplace, Shoppers Drug Mart, Pharma Plus and Rexall, London Drugs and Wal-Mart.

Advanced Enterprises Inc. Advanced Enterprises Inc. was formed in 1982. We were the first to bring cosmetic wedges to the market. We sell high-quality, non-latex cosmetic foam applicators at very competitive prices. Our wedges are great for applying foundation, eye shadow and blush. One of our main focuses for the event will be the Wonder Mitt. We consider this item to be the new Belle of the Bath. This product can be used for cleaning, exfoliating and smoothing each pore of the most delicate, sensitive or damaged skin. The Wonder Mitt has all the properties of Wonder Cloth and removes makeup with water only. No stains remain on Wonder Mitt after use! Additionally, the Wonder Mitt is hypoallergenic and all natural. Our company is always looking for new ways to improve the cosmetic accessory category. Finally, we do private label products and are looking to form new relationships.

Volume 2, Issue 15 • ECRM Focus

MARKETING INITIATIVES MARKETING INITIATIV A showcase of products and companies

Calico Laboratories You’ve come to expect more from a market innovator and leader in the nail care category! That’s why Calico Labs offers multiple recognizable brands, that sell, all under one roof! Branded products like Polish-Off, Salon-Pro, Calico, Take your Face-Off and out latest acquisition – Pretty Nails! Plus Calico is a prime manufacturer, offering a wide range of private label and contract packaging products to provide our retail partners with the PL items they need to make that added bottom line profit! Calico provides only top-quality products at economical prices for our consumers and high profit margins and excellent on time shipping for our retail partners! Calico has proudly served the cosmetic industry with American made goods since 1979!

Calico Laboratories Pretty Nails by Calico Laboratories, Inc. Pretty Nails is rising again! Calico Labs has acquired the Pretty Nails brand and is relaunching the “Original” Sponge Style Nail Remover along with a full compliment of NPR liquids in two-, four-, sixand 10-fluid-ounce sizes. Also a new 100% pure acetone item! All economically priced to sell! Beautiful full color graphics and clean line packaging set this brand apart from the rest! Consumers have been seeking these items for years and are happy they are now getting the wider distribution they deserve. Plan to make space for these fast-selling items in your nail set today!

Smart Brands Inc. Smart Brands Inc. is a creative team with a long history of proven brand success, specializing in brand creation and management. Core competencies are obsession with innovation, leadingedge design and product integrity. In 2004, the team successfully launched three beauty brands, each appealing to a very specific target and market niche. Since, Smart Brands has recently launched three private label brands for a major U.S. retailer. The company is also designing and creating a line for UK Disney to be launched this summer. Smart Brands brand portfolio consists of Ten Beauty, a color budget line; Indulge Beauty, a color entry price-point line; Tru Unlimited, a drugstore color brand with specialty positioning and organization; Gossip, a tween color private label; Karma Beauty, a teen color private label; Spa Candy, a bath and body private label; and Disney, a color line for the ‘up-and-coming’ tweens in the United Kingdom.

ECRM Focus • Volume 2, Issue 15

C3 Calico Industries

C4 Ad Jane