Marketers Hustle To Launch 'Econo-Chic' Products

by Sarah Mahoney, Apr 23, 2009, 2:18 PM

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While higher-end skincare and cosmetic sales are down, a new study from Mintel reports that the decline is masking a new "econo-chic" trend in cosmetics, marked by a new demand for multitasking products. 

"It used to be that consumers would wander into a department store, and salespeople at the counters would try and convince her she needed every single product -- the serum, the moisturizer, and the eye cream," says Taya Tomasello, senior analyst for Mintel Beauty Innovation. Now, she says, shoppers are staying brand-loyal, but cutting back, just buying products they believe are most effective, mulititasking or easy to use.

One in four (27%) skincare products launched in the first quarter made such a "convenience" claim, she says -- like Johnson & Johnson Clean & Clear Facial Cleansing Wipes that come in a portable plastic package and claim to instantly dissolve dirt, water and makeup without water or rinsing, or Clinique's Youth Surge SPF 15 Age Decelerating Moisturizer, for example, claims multiple benefits: slowing the signs of aging, repairing and strengthening skin and providing sun protection.

"Cosmetic companies are quickly responding to the needs of the Recessionista," she says, pointing to the rapid introduction of eye shadows that firm and contain sunblock, or foundations enriched with the same peptides in a moisturizers.

And while it's clear that women are where they shop -- leaving department stores for discounters and drug stores -- Mintel recently upped its forecast for beauty products, and now predicts the recession will fuel a 10% rise in cosmetic sales over the next five years. (Its previous forecast was 7%).

She says women are also hungry for innovations in packaging, such as make-up that's stackable for easier carrying, for example, and compacts that allow them to combine different products.

She expects drug stores and discount retailers to continue to do well in this environment, as these beauty prowlers look for bargains in more channels -- including shopping online, either through conventional Web sites or new invitation-only boutiques, such as RueLaLa, as well as TV shopping shows.

In skincare, she expects to see more brands explore price points within channels, fueled by the success of Procter & Gamble's Olay line's launch of Pro-X, sold in drug stores but priced almost as high as department store offerings.

"I'm sure it is cannibalizing some of the Regenerist line," she says, "but it's still a little cheaper than department stores, and much more convenient -- they don't have to make another trip. Department stores are losing their beauty customers, and I wouldn't be surprised to see them introduce some mass brands into their offerings."

From a marketing standpoint, as consumer demand shifts to products that are more effective, she expects to see an even greater emphasis on sampling, promotions, and discounting, and much less on image advertising: "Companies will do what they need to do to maintain brand recognition, but sampling is the No. 1 reason women switch to something new, and marketers know that."

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