Private label cosmetics have traditionally been a difficult venture for retailers.
The high stock-keeping-unit count coupled with the necessity to stay constantly in touch with fashion trends, make it a detail-intense, time-heavy category. Then there are the sophisticated marketing programs and high-priced models that are an inherent part of the beauty business. How could a retailer brand possibly compete?
Of course, offering a private label or an exclusive beauty collection is a way to set a store apart from the competition in a category that lures the core shopper - women. So U.S. drug store and mass retailers have found an easier way to do it - many are now sourcing high quality, well-developed European brands and tweaking them for an American audience.
CVS has been a forerunner in this movement with the introduction of Lumene, a brand from Finland. It started as a test in select stores in 2003. By the end of 2006, it had rolled out chain wide. Lumene reported its U.S. sales grew 30 percent last year. It is a broad line containing color cosmetics like lipstick and mascara, as well as skin care products. CVS prominently displays the full product assortment in lighted blue and white fixtures.
Starting in March 2007, Target is offering the Lumene brand in 1,500 stores, possessing the brand exclusive in the discount store trade.
That's not all. Also in March, both CVS and Target are expanding Boots beauty brand sections that have been testing in some 80 doors for about two years. The set will be in 1,500 Target stores and 450 CVS locations. It contains some of the U.K. retailer's best selling proprietary beauty lines such as No. 7, Botanics, Mediterranean and Time Dimension.
Meanwhile, Walgreens has an exclusive with IsaDora, a cosmetics brand from Sweden. The program began simply two years ago with countertop displays and has progressed to take the lead position on its cosmetics wall.
The U.S. launches of these European brands are being supported with press events for beauty editors and in-store sampling and information. For instance, Walgreens provides an IsaDora cosmetics guide that clearly states the brand is "Exclusively at Walgreens." A recent flyer outlined the benefits of each of its mascara, lipstick and foundation items.
Discussion Questions: What does all this international, private label and exclusive brand activity mean for the longstanding brands such as L'Oreal, Maybelline, Cover Girl and Revlon? How will the U.S. branded cosmetics manufacturers position themselves relative to these new offerings from major retail chains? On the other side, can major retailers make such fashion oriented-offerings work?