Innovative products and marketing are propelling the beauty sectorWhen the world's beauty-industry leaders convened in Evian, France at the end of June this year for their fourth Beauty CEO Summit, the prevailing theme of the discussions was regeneration. Not the regeneration normally associated with makeup, anti-aging creams, and aromatherapy, but the regeneration of the industry itself. "There was talk about brand building, how to establish new brands and rekindle old brands; about finding new ways to reach the customers; about the retail-challenged trade and new consumer values," says summit organizer Peter Born, VP and associate publisher of Women's Wear Daily. Titled "Beauty's New World Order," the summit reflected the consensus of the industry in a positive atmosphere, says Born. After all, what is there to be negative about? While beauty care was not unaffected by the plunging economy and the September 11 terrorist attacks, it was among the first sectors to start recovering. A June 2002 report on the latest trends in the consumer packaged-goods industry by Information Resources made it official: In the four months following September 11, beauty-care products registered a 1.5% drop in sales, but quickly bounced back in the first half of 2002, with a healthy 4.7% growth rate. Beauty-industry experts say that cosmetics and self-care products are recession-proof. Estee Lauder's Leading Lipstick Index indicates that women buy more lipstick when the economy is soft. "In difficult times, people want to spend money on affordable things that give them a lift in spirits," says Sally Susman, SVP of communications at Estee Lauder. Maria Salzman, chief strategy officer with Euro RSCG Worldwide, who has been researching the trends in the beauty industry since well before the current recession began, agrees: "Like fragrance, lipstick is the most instant way of gratification," she says, "When I buy Chanel lipstick, it makes me feel special, like I'm cherishing myself." Other than a special treat, a lot of beauty-care products are simply a necessity. We will always buy shampoo and cleansing products, men will always need shaving cream, and women just won't give up makeup. The change that the down economy and September 11 brought lies more in customers' expectations of product performance, which has affected the way those products are marketed - from promotional events to media placement. The slowdown of pitching to the media after September 11 was understandable, yet only temporary. "The general feeling in the profession, whether pitching cosmetics or the latest wonder drug, was that this was not an appropriate time to pitch anything that wasn't 'need-to-know' news, especially to short-lead media," says Loren Fischer, an account supervisor with Tierney Communications, which promotes brands such as the White Rain hair-care products. But as she mostly works with women's magazines (which are long-lead publications whose editors still had to work on stories for their December, January, and February issues), Fischer explains, business had to return to normal quickly. Events give way to intimate interaction Major promotional events were initially postponed or cancelled as a result of the public's wariness of highly populated gatherings and the beauty industry's concern that colorful events might seem too shallow in the context of the national tragedy. Procter & Gamble did not do the satellite media tour for a new Head & Shoulders shampoo it had scheduled for early October. "But we didn't have any major new launches scheduled last fall, so we got lucky from a timing standpoint," says Maria Burquest, a beauty-care communications specialist at Procter & Gamble. Organizing fewer grand events and more private, one-on-one meetings is a trend that Nancy Lowman-Labadie, EVP on P&G's Cover Girl and Max Factor accounts at Marina Maher Communications (MMC), sees in her company as a result of September 11. "Grand events still work as they would in the past if there is a good reason to have them, and right after September 11 there was no reason to celebrate," she says. But in March 2002. MMC was back on track organizing the annual Cover Girl/ Seventeen Volunteerism Awards in New York, even though in the previous four years, the event had taken place in Washington, DC. "It's not that big events are gone, but that people more enjoy the intimate interaction and being able to customize attention better," Lowman-Labadie says. Grand events might be less popular, but new product launches are inundating the market and challenging PR pros to make their clients' products noticed on the packed shelves or glossy department-store stands. "We are drowning in new product launches," says Women's Wear Daily's Born. "There were very few new launches last fall, and business has been weaker, so people are probably launching in order to just gain sales." Est?e Lauder introduces more than 300 new products a year, and a third of its revenue comes from products introduced within the last three years, according to Susman. "The industry is completely focused on innovation," she says. During the 2000-01 fiscal year, Estee Lauder spent $62.2 million on R&D, or 1.3% of its total sales of $4.6 billion. The world's number-one cosmetics company, L'Oreal SA, whose brands include Lancome and Maybelline, spent about 3% of its $13.7 billion in sales on R&D. Avon, a charity leader in the beauty industry with its Breast Cancer Crusade that has raised $190 million worldwide by 2001, and has committed to reach $250 million by the end of 2002, spends $45.9 million a year on R&D. The drive for innovation is not the only factor fuelling R&D, as "new and improved" and good looks alone do not sell products to an ever more demanding consumer. "In a recession and after September 11, what people want is the real deal," Born says. "The absolute value, not the 'you get so many of something at such-and-such price,' but the value in terms of performance." Where beauty and health overlap Women are now as interested in feeling good - physically and mentally - as they are in looking good. They are increasingly buying products that promise to prevent or reverse the signs of aging, or cosmeceuticals - natural beauty-care products that are also healthy. "Consumers are looking for 'good for me,' multiple-use products, unique applications, and easy-to-transport products," says Debbie Hicks, VP for image & brand marketing at Yves Rocher. "Today's busy consumer is looking for products that can provide well-being and convenience to their busy lifestyles." The French beauty company has produced purely botanical products for 40 years, and is one of the leaders in this "all-natural" trend. The trends toward health and wellness and the idea of beauty coming from the inside out have even permeated the fragrance industry. The Lancaster Group, producer of brands such as Davidoff, Joop!, and Esprit, is preparing to launch a new fragrance called Glow by Jennifer Lopez, emphasizing inner beauty. "We started calling it 'the glow factor,' this beauty from the inside out," says Leslie Kickham, director of corporate communications at Lancaster. "People are not just concerned with their appearance, but with a feeling of wellness throughout." The trend toward multifunctionality, primarily a result of the faster pace of life and longer work days, has brought to the shelves products such as the multipurpose stick that women use to color their lips, cheeks, or eyelids, the SPF 15 facial cream that blocks ultraviolet sun rays, and the lipstick that combats bad breath. As consumer demand for multifunctional products and cosmeceuticals becomes tougher, so are the responsibilities for public relations professionals, who now have to not only promote, but explain - in detail - what a product is, does, and how it works. "People these days are demanding that the products live up to what you say you do," Kickham says. "If you talk about a cream that reduces wrinkles, it should do that, and you have to make sure you explain to the consumer the benefits of what you are promoting." In a fiercely competitive marketplace where new products appear on the shelves every day, packaging is the ultimate attention-grabber, and recent studies show that people are looking for simpler, cleaner packaging. "We want less to be more. We want basics - things that feel comfortable, but don't overwhelm us," Euro RSCG's Salzman says. "We're at a time of anti-hype. I bought a Bobbi Brown lipstick the other day - it's all in metal, and I love the simplicity of it."