Kiehl's Marketing Report

MARKETING REPORT

STRENGTHS

Medical knowledge

Heritage

Low price within premium segment

Owned by L’oreal

Strong social media presence

WEAKNESSES

Low brand awareness

No advertising

Limited distribution

SWOT ANALYSIS

OPPORTUNITIES

Mens grooming

Loyal customers

Word of mouth

Skincare rising trend / market

THREATS

Over-crowded market

Competitors spend highly on advertising

Poor presence out of big cities

PESTEL

O L I T I C A L

Brexit is affecting trading lawswhich may have an impact on Kiehl’s’ UK market as well as the skincare retail landscape holistically in the UK.

E C O N O M I C

Kiehl’s has remained one of L’Oreal’s fastest growing brands and broke the symbolic $7 billion sales mark in 2016.

S O C I A L

They frequently make charitable donations- for example, the launch of a limited edition Ultra Facial Cream raising money for Autism Speaks.

Kiehl’s make it a point to remain traditional to stay consistent with their roots and heritage- so have a lack of digital advertising and promotion.

Kiehl’s made use of an in-store activity the ‘potting station’ demonstrating a way to recycle and reuse old Kiehl’s jars, turning them into potted succulents.

E G A L

By selling in Mainland China, Kiehl’s consent to have their products tested on animals by Chinese local authorities, meaning they are not a ‘cruelty-free’ brand.

CURRENT BEAUTY RETAIL LANDSCAPE

11%

answered ‘beauty products’ when asked: “if you had a bit of money left over once you paid the bills, what would you spend it on?”

1.1 billion

estimated amount spent online on beauty and personal care in 2017

10 billion +

overall spending amount on health and beauty and personal care

1.4%

higher than in 2016

10.9% of the total market

7.5% higher than in 2016

75-80

amount of Superdrug stores Watson announced to open in July

2017

33% answered ‘beauty/fragrances’ when asked what they bought from department stores in the past 12 months

Sales growth of skincare products in the United Kingdom (UK) from January to March 2018, by product type

15%

12% Serums

10% Anti-aging skincare & moisturisers

Toners Cleaners

2%

KEY MARKET DRIVERS

30%

of women who use facial skincare would choose a product that seems to have a scientific background

41%

of women using skincare look for certain ingredients when choosing products

73%

of women agree that it’s not always clear what certain ingredients in skincare products do

33% chose ‘inclusion of natural ingredients’ as the most important factor when choosing a facial skincare product

26%

agree that you can achieve the same effects with beauty products as you can with non-surgical procedures

THE GOOD SHIP BENEFIT

Benefit launched this experience located on R.S Hispaniola, Enbankment in April 2016. The San-Francisco themed ship was open for 5 months giving consumers the chance to discover Benefit products, with cocktails, afternoon tea and culinary experiences.

A W A R E N E S S

Benefit were aware of their success of the readily existing products so knew that the use of basing floors of the ship on these (e.g. POREfessional vault) would be a successful strategy to entice benefits consumers. The Good Ship already had press coverage before it’s launch which helped raise awareness such as ‘campaign live’ who wrote an article prior to it opening. The experience was strategic in timing as it coincided with new product launches (e.g. Benefit’s Dew The Hoola). Benefit ensured that the ship captured the brand DNA remaining fun and feminine.

I N T E R E S T

The ‘Good Ship’ was open to public for general use and visits however they made use of specific events including afternoon teas, bottomless brunches and fitness class that appealed to the demographic and the ‘benefit girl’. These sparked word-of-mouth and social media coverage that would generate mass interest.

D E S I R E

The Benefit Good Ship received positive acclaim. The variety of events held meant there was an event appealing to every type of woman within the Benefit demographic- ranging from fitness classes to bingo. They made use of initiatives making the experience desirable, such as during ‘May’ each customer having a brow wax could donate by text to Look Good Feel Better and Refuge, receiving a complimentary ‘Gimme Brow’ product

A C T I O N

Although being geographically limited as an event, it was a suitable choice for location being in London, a world capital. Additionally, it was open to public for both visiting and who were able to purchase tickets for the specific events, meaning it was accessible for them to ‘take action’ and was more inclusive as an event over a VIP-only / influencer focused event.

THE GOOD SHIP BENEFIT

R E T E N T I O N

Benefit ensure to remain engaged with their consumers to maintain the relationship and to continue to expand as a brand. They are highly active on social media particularly Instagram , frequently hosting competitions here whereby consumers can win products, an incentive that is bound to keep people following the brand. The Good Ship was not the first experience they launched- they have had many prior including the Benefit World Cup pub and the ‘Temptation Telephone’ and have had them since also.

VR WATERSLIDE

Topshop experimented with virtual reality launching Splash at their flagship store on Oxford Street- whereby consumers were able to race down a water slide through London. It was designed to mark the start of the summer season.

A W A R E N E S S

Topshop made use of social media within the first couple of days of the launch of Splash in the form of a branded snapchat filter. They were also wise in choosing the flagship store to host this experience as that location in Oxford Street generates awareness through word-of-mouth within itself, which I can confirm by witnessing the queue outside the store when this experience was running. The idea behind it was to draw attention to the start of the summer season meaning they had new products launching that would be of interest to their consumer, and Splash would lead them into the store.

I N T E R E S T

The choice of activity would inevitably generate interest as virtual reality is something that I can assume the vast majority of people who took part in the ‘Splash’ wouldn’t have had the opportunity to experience previously.

D E S I R E

They added additional touches to form the ambiance of summer to help promote new season items. They pumped the scent of sunscreen throughout the store and hosted a variety of summer-themed pop-ups alongside the Splash, including an ice cream vendor (Milk Train). This further enhanced the fact that the store was experiential during this time, and would make the usual Topshop shopping experience different for the consumer.

A C T I O N

Topshop sensibly made use of the flagship store meaning it was easier for the consumer to take action as they were aware this was likely to be one of the, if not the busiest store nationally and therefore would be accessible to a lot of people who simply just queued to take part with no ticket required. Oxford Street also would hold a lot of people that may not typically be the Topshop consumer however may be interested in the unique event offered and therefore be persuaded to take part, becoming a Topshop consumer in some form at least temporarily.

VR WATERSLIDE

R E T E N T I O N

Topshop don’t frequently have events as innovative as Splash- making it a one-off experience for the Topshop consumer. However, when speaking personally to a member of staff working in the flagship store, she explained that the store layout is frequently changed and touches such as the ‘summer ambience’ used in this case are always considered to enhance the shopping experience here. They always have some kind of pop up on the ground floor and the first thing I associate with the flagship Topshop is the DJ playing songs for the storesomething not used in other brands- or even other Topshop stores meaning they are aware of the need to make this store unique to retain the interest in visiting.

COMPETITOR POSITIONING MATRIX

MARKET SEGMENT

SKIN CARE HAIR BODY MEN’S

TOP SELLING PRODUCTS

Midnight Recovery Concentrate (Younger-Looking skin by morning)

Ultra Light Daily UV Defense SPF 50

Ultra Facial Cream

Powerful-Strength Line-Reducing Concentrate (treats lines and wrinkles c-radiant results)

Clearly Corrective Dark Spot Solution

Creamy Eye Treatment With Avocado

Super Multi-Corrective Cream

Facial Fuel SPF 15

Hydro-Plumping Re-texturising Serum Concentrate Creme De Corps

TOP SELLING MEN’S

Facial Fuel Energising Moisture Treatment For Men

Facial Fuel Energising Face Wash

Facial Fuel Energising Scrub

Midnight Recovery Concentrate

Ultimate Brushless Shave Cream Blue Eagle

Powerful-Strength Line-Reducing Concentrate

Facial Fuel No-Shine Moisturising Lip Balm

Ultimate Man Body Scrub Soap

Oil Eliminator Cleanser

Ultimate Brush Shave Cream White Eagle

CONSUMER IDENTIFICATION

A G E

The typical Kielhs consumer would fall into the age bracket 30-45 years old, meaning the majority fall into the ‘Xennials’ generation, with some being slightly older than this generation (‘Generation X’) and some slightly younger (‘Millenials’ - born in the late 80s or before). By looking at the age given on reviews it shows that this does vary frequently and that Kiehl’s consumers do vary in each- however those aged 30-45 are most prominent.

G E N D E R

Kiehl’s appeals to both men and women- they launched men’s products early on in the 1960s therefore are a brand that men- particularly those falling into the age bracket 30-45 perceive to be reliable and available when seeking to purchase skincare products. The men’s market segment continues to do well for Kiehl’s- aided by the rise of the ‘meterosexual’ male who takes pride in appearance and grooming.

I N C O M E

The target Kiehl’s consumer is likely to earn higher than the national average wage considerably as they are spending a more prestige price on skincare. This is further supported by the living locations of the typical Kiehl’s consumer.

C L A S S

For both men and women, the Kiehl’s consumer will be middle-upper class. This is supported by the price point at which they are willing to spend on the more premium skincare. They also be aware of using Kiehl’s to mark social status, particularly if they are quality concerned or health conscious.

P S Y C H O G R A P H I C S

Generally being a Kiehl’s consumer you are likely to be quality concerned, open minded, professional, a traveller, take care of your appearance and well being, potentially a hipster or metro-sexual, an innovator, thinker or achiever.

L O C A T I O N

Kiehl’s stores or concessions in the UK are majority based in London, if not surrounding cities in the South East location. Considering they do not really on digital advertisement, it is likely it is those within this region, therefore living in London or in access to it, that are familiar with Kiehl’s and are the consumer purchasing the product. Kiehl’s globally also focus on stores in cities.

CUSTOMER PROFILE

Health conscious middle-upper class woman aged around 35. Living in a suburb and commutes into the city for work whereby she is a professional within her industry. Earns more money than the average person therefore likes to spend disposable income on high quality products that will benefit her health/wellbeing. Values both the environment and charitable causes.

EMERGING CUSTOMER HABITS

48%

of people have made some effort to reduce their social media use

77%

have taken a temporary break from all social media

36%

of consumers research products online before buying something from a department store

80%

of consumers who were aware of ad-blocking software have used it

Important factors when buying in store:

47% product displays

33% exclusive products

31% frequent updates

44%

described their current financial situation as ‘okay’

38%

of rural shoppers said they were hesitant to shop online because of privacy concerns

BRAND IDENTITY

PHYSIQUE

Traditional typography decorative black bold brand name

PERSONALITY

Nurturing products offer solutions

Lab coats worn by employees

CULTURE

American began in New York

Reliable medicinal background

Standalone stores with Mr Bones, medical books and Harley Davidson’s

Medicinal originally a apothecary

Caring values customer service and charity

Family values committed to upholding values set by Morse family

RELATIONSHIP

Listening concern for customers needs

REFLECTION

Cosmopolitan cultured and aware

SELF-IMAGE

Healthy taking care of their skin

Personal tailored service

Loyal repeat customers + consistent service

Timeless less concerned with trends

Sociable values connections with other people

Socially responsible buying into an ethical brand

Luxurious but not excessive

MARKETING MIX

P R O D U C T / S E R V I C E

The Kiehl’s consumer wants products that offer a solution, using a scientific approach and natural products to achieve this. Their priority is the quality and effectiveness of the product and therefore are less concerned with factors such as packaging design. Their products are designed for everyday use by the consumer as part of their routine to reach the goal of ‘healthy skin’. Kiehl’s differs from it’s competitors in that it has the pharmaceutical heritage, and they reflect this in how they are branded. They also understand that customer service is highly important, offering tailored advice when for the consumer.

P L A C E

Although stocked in some department stores, the most desired location for the consumer to access Kiehl’s’ products is at their standalone stores, whereby there is the opportunity to capture the brand DNA with touches such as the medical books, and also they are able to offer the high quality service that comes with the brand. Although Kiehl’s makes use of an online store, due to their lack of advertisement, it may be that this is more of a platform for repeat customers with a loyalty to the brand, over people who happen to stumble across the online store. E-commerce is an expanding way for the consumer to shop however Kiehl’s do not focus on this channel.

P R I C E

Products sit at a higher price point however this is due to the high quality of the products being sold and the Kiehl’s promise of healthier looking skin. This reliability of the product, stemmed from the medicinal roots of Kiehl’s mean that the consumer is happy to pay this price, they are buying into a brand that they perceive as reliable and therefore the product is good value for money even if it is not the cheapest.

P R O M O T I O N

Interestingly, there is no obvious strategy that Kiehl’s use to promote products. They make a point not to advertise and they are more keen on word-of-mouth to spread awareness and repeat customers. They have faith in the quality of their products and therefore don’t try to sell the product through advertising. This differs from competitors such as The Body Shop who may make use of strategies to gain custom such as promotional deals (e.g. 2 for 1). This means that there is an awareness that when launching the promotional event, it will be less focused on trying to make a mass amount of people aware of Kiehl’s and instead focused on making a smaller group invested in the brand.

MARKETING MIX

P E O P L E

Kiehl’s staff ensure to represent the brand efficiently and this is explicit immediately when it comes to in-store assistants who are seen wearing lab coats to show the heritage of the brand. They are also trained to give excellent customer service and be attentive to the consumer, by offering samples, giving knowledgeable advice and overall making them want to return to the store or continue to buy into the brand.

P H Y S I C A L E V I D E N C E

With products, Kiehl’s remain on brand by making the packaging of the products clean and clinical looking so again the focus is on the product itself and it’s benefits to it’s buyer. In stores, they are more lively in how they present themselves to create the welcoming ambience to a passer by- however remain ‘Kiehl’s’ in the physicality, with a Mr Bones mascot in each store, medical books etc. that tell a story about the history of the brand.

P R O C E S S

The focus of Kiehl’s and the attitude that staff adopt is that they ensure to offer the highest level of customer service with a genuine want to provide solutions in order to help the consumer have healthy skin. They are less focused on advertisements, celebrity endorsements etc.- which is are prioritised by competitors, and instead want consumers to reap the benefits of the products available, keeping them loyal to the brand and gaining new customers through word-of-mouth praise.

PRESS RELEASE

Wednesday 20th March 6.30pm - City Garden London Event Providing In-Depth Skin Consultation

Knowledgeable and attentive Kiehl’s ambassadors will join the health conscious and environmentally aware such as yourself to experience group discussion and oneon-one skincare consultation.

To mark the spring equinox and embrace the ‘spring clean’ mentality, Kiehl’s are offering the opportunity to gain greater understanding of your skin and how to nurture it as well as the benefits of the ingredients used within products.

City Garden is the ideal location for appreciating nature amongst the idyllic gardens and botanical setting, whereby there will be an open group discussion amongst attendees, who can exchange skincare issues, advice and experience. There will also be the chance to have an individual consultation with a Kiehl’s ambassador who will offer tailored advice to aid ‘feeding’ your skin.

About Kiehl’s

Kiehl’s are a skincare brand inspired by nature and science, that provide effective products with the promise of delivering healthier looking skin. The brand began as an old-world apothecary and remain traditional and value charity and customer service. For more information: https://www.kiehls.co.uk

SKIN FEED CLINIC

The skin feed clinic will be an intimate event hosted at City Garden, Fenchurch Street holding 40 attendees. 10 of these attendees will be members of press invited, including Wellbeing Magazine author Rachel Branson. 10 will be winners of giveaways hosted on different social media platforms such as Thrive Magazine’s Instagram, as these winners might not be aware or have previously purchased Kiehl’s products but are likely to share personality traits or hobbies of the target consumer. The remaining 20 invites will be given at random by Kiehl’s ambassadors at pop-ups at either a central London gym or clean eating restaurant. This again gives opportunity for people to attend that are not already a Kiehl’s consumer.

The event will begin with a group discussion, whereby everyone will join in a circle in an open talk regarding skincare issues, advice etc. This offers something unique to the in-store 1 on 1 service given and reinforces the importance of the want for healthy skin. It will help recognise what the most common worries people have regarding skincare, which will benefit Kiehl’s too in knowing how to progress as a brand.

After this, the location will be ‘open’- there will be food and drink available, the chance for attendees to socialise, a raffle and skin consultation booths. Raffle tickets will offer attendees to win a selection of prizes including Kiehl’s products as well as other items such as ‘grow your own’ sets and succulent plants. An important factor of this raffle will be that one winner will have the opportunity to nominate a charity whereby the profits of the raffle are donated. This highlights the value Kiehl’s places on charitable causes and offers something different in comparison to different brand events. The skin consultation booths give people the opportunity to talk privately to a Kiehl’s ambassador who will offer them product recommendations in the form of a ‘prescription’ that they can take into store and redeem, claiming the products for free, as part of a thank you for attending the event. This will demonstrate the ethos that the brand hold regarding customer service and is also an effective marketing tool seeing as these people then have to revisit Kiehl’s to claim these products- meaning they will then be exposed to the in-store experience and may encourage them to make additional purchases or revisit the store in the future.

SKIN FEED CLINIC

L O O R P L A N

F

Skin consultation booths on the left, the conference table for group discussion, tables serving food and drink below it and the raffle table on the far right.

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