Perfumery is very close my heart as a business and as a product.
Having spent over 20 years in the aromatic world, managing some of the biggest brands in the perfume sector, I am now sharing my insights on how using perfume flankers is one of the top business games.
If you analyze each of the middle eastern perfume player or even go ahead with western perfumeries, each one of them has one or two main- Best selling fragrance label under their kitty.
Perfume flankers are variations of an original fragrance, created by brands to capitalize on a successful scent’s popularity while attracting new customers.
Prerequisite for introducing perfume flankers.
The success of parent version of the fragrance is indeed the main requisite.
Success of parent fragrance both in terms of sales (units) as well as imagery Visibility in the market and continuous persistent demand from all the distribution channels and consumers.
The parent fragrance should have seen at least two seasons of continuous growth in the channels prior to embark on creating a fragrance flanker.
Using perfume flankers for growing sales dominance.
Flankers typically retain the DNA of the original perfume but introduce slight modifications such as different notes, intensities, or bottle designs.
This strategy helps brands maintain customer interest, appeal to evolving trends, and drive additional sales.
For example,
Chanel No. 5, an iconic fragrance, has seen flankers like Chanel No. 5 L’Eau, a fresher and lighter version for younger audiences.
Dior Sauvage, a bestseller, has spawned variations like Sauvage Elixir and Sauvage Parfum, offering stronger and richer compositions.
Carolina Herrera’s Good Girl line has introduced multiple flankers, including Very Good Girl and Good Girl Supreme, each with a unique twist on the original.
Similarly, Club de Nuit Intense by Armaf has expanded with versions such as Club de Nuit Urban Man and Milestone.
Davidoff’s Cool Water also boasts numerous flankers, like Cool Water Intense and Cool Water Parfum.
These flankers not only refresh a brand’s fragrance portfolio but also enhance revenue streams.
Since the development of a flanker requires less investment than a brand-new fragrance, it allows companies to maximize profits while catering to diverse consumer preferences.
It also addresses the common question from the trade – whats new and trade feels confident to invest in new flanker riding on the popularity of the parent fragrance.
Caution for Niche Perfumes using flanker as their strategy
To be honest, I haven’t seen flankers doing well especially with niche fragrances.
My personal view is since the fragrance is niche, both in terms of heritage, design, formulation and unique offering which commands a higher premium from the masstige or Premium brands.
In niche brand marketing, you speak and target to a smaller audience within specific target group (demographics, psychographics profiling is limited)
For a true niche brand that is speaking to a narrow audience, launching flankers can run the risk of cannibalizing sales of an existing scent.
Personally, I would feel cheated if my niche fragrance brings out a flanker at lower price point, then for me… the brand is no longer in niche luxury space.
I haven’t seen a flanker of Hermes -birkin bag as yet… (have you?)
Way out for niche luxury perfume brand
Niche fragrance can bring out more concentrated flankers as Extraits which would appeal and keep the brand loyalty intact.
Toys R Us which shut down its last store in Jan2021 is now making a comeback as a shop-in-shop concept with retail giant Macy’s.
As Fox Business reports, the Toys “R” Us stores inside Macy’s range from between 1,000 square feet to 10,000 square feet in size, with larger flagship stores set to exist in Atlanta, Chicago, Honolulu, Houston, Los Angeles, Miami, New York, and San Francisco.
Last month, Glossier (a beauty etailer) announced its distribution partnership with Sephora. (read the article here)
Nordstrom recently teamed up with at-home fitness brand Tonal to put mini-storefronts into 40 of its stores in an effort to capitalize on the boom of interest in home fitness.
Walmart had earlier set up Disney SWAS stores as well.
What is SWAS model (shop within a shop) & why it is helping brand to reinvent their physical retail?
One of the most popular strategies right now is SWAS, also known as ‘store within a store’.
Store Within A Store, also known as SWAS, is an experiential retail strategy where retailers set aside floor space for partnering brands to set up shop.
This may be done as a permanent lease or as a temporary pop-up lease strategy to drive footfalls into the main departmental store or even malls.
Pop-up stores are very popular amongst luxury brands as well as they get an opportunity to showcase their new collection in a high upmarket commercial space without opening a permanent retail store.
SWAS concepts will often involve value-added offerings in addition to just selling products.
This includes tutorials/product demos, roundtable discussions, or product sampling campaigns that enhance the customer experience and drive a buzz around the brand and the host retailer.
Post-Pandemic, most retailers are trying to reinvent themselves and the SWAS model is an excellent strategy to expand & increase brand presence.
Benefits of SWAS model for the host retailer/ shop in shop benefits.
Adding newness into the store without adding burden on capex.
Partnering with known brands attracts new customers for the host retailer
Maximum utilization of the store space by adding complementing brands to the host retailer’s offerings.
Additional source of revenue generation for the host retailer.
Changes in consumers preferences driving growth of SWAS model
Today, consumers are just as likely to discover new products on social media as they are in-store.
Moreover, 81% of consumers say that they research a product online before purchasing it in any channel.
Why SWAS is a good model?
Having maxed out their online audience and facing increasing acquisition costs, many successful D2C brands have taken the plunge of bringing their products offline to participating retailers.
Product Visibility and product trials are the key to growth.
Retailers can provide unique value by offering experiences in-store that shoppers cannot get online.
Opportunity to touch & feel which is not applicable to the online shopping experience
To learn how a toy retailer could add million dollars to their profits, click here.
Physical stores are a crucial touchpoint – but not necessarily the point of purchase.
Today physical retailers are moving their mindset from Transactional relationships with their customers to “imparting experiences” to build brand loyalty.
Allowing customers to book an appointment via the website for a free makeover, lead the customer to experience not only the makeup brand but uplifts the probability of higher purchases in-store.
Focus of right merchandise mix.
SWAS model helps the brand to optimize their merchandise offering, instead of offering everything, it gives them an opportunity to curate the right product offering which is a more focused approach towards inventory planning.
Nowadays, the most trending topic in any networking is about Startup and entrepreneurial ventures.
Recently I attended the middle east retail forum 2019 #mrf2019 wherein I met with wonderful people, retailpreneurs, successful retailers and mall developers. It was a very well organized event, ( i shall write a separate blog on the same soon).
One interesting feature that caught my attention was a panel discussion dedicated to startups, for instance.
It was like a famous series called Shark Tank, wherein the startups would pitch their business proposal to a jury and get shortlisted for the awards or VC fundings.
There were some really good concepts that were really path-breaking, however, most of the entrepreneurs had missed on a few main points, which inspired me to re-purpose my earlier written blog on startups.
There is a wonderful saying “What got you here, won’t take you to next level”, you need to keep enhancing your skills, keep innovating yourself by breaking old habits ( point of caution- innovation is not always product-centric, it can be very personalized, even the way you think can be innovated)
One important point that I would like to convey to entrepreneurs is that the VC fund is something like “Vapour capital” it evaporates as soon as it comes into your business.
Try to follow the basics of business i.e. if you invest USD 1 into your business, you need to generate USD 2, re-invest this again in your business till your business becomes self-sustaining. If you follow the ratio 1:2, you shall never have cash flow issues in your business.
I am putting down the most important tips which would help upcoming retailpreneurs with their projects.
1. Start with your own Pain points:
The easiest and straightforward way to create a great product or service is to make something you want to use yourself.
As you build the project, you would soon figure out whether or not you are making any good.
Case study:
Coach Bill Bowerman felt the need for better lighter running shoes for his team. So he went out to his workshop and poured rubber into the family waffle iron. That’s how Nike’s famous waffle solewas born.
Key learning: “Start with your own pain point” and coming out with the solution, lets you fall in love with what you are making.
This very source provides you inner-motivation and go-getter attitude.
2. Keep customer focus through-out:
Always at the start of any project, keep your customer on focus, imagine what you would like your customer to say about your product or service.
3. Be Action taker:
You should feel an urgency about whatever you are planning to start or to do. If you are building a break-through product or service or even a Me-Too product, JUST DO IT(as Nike says it).
Don’t sit around and waiting for someone to make the difference that you would like to see.
Case study:
The Drudge Report, run by Matt drudge is just one page on the web run by one guy.
Yet it has a huge impact on the news industry- television, radio talk-show hosts, and newspaper journalists all visit this page daily to find out as to what’s the current stories.
In July 2016, the site garnered 1.47 billion Pageviews, as a result of US Presidential elections
The Drudge Report’s traffic beat out the likes of news sites from Disney Media Networks (which includes ESPN.com and ABCNews.com), Yahoo, Google, Time Warner, and Fox Entertainment Groups.
Key learning:
Make the difference that you would like to see yourself. Drudge’s report came from nowhere and disrupted the old models that had been around for decades.
Learn as to why good writers build great companies, read here.
4. Understand Your core “WHY”:
Great businesses have a point of view and not just a product or service. You have to believe in something. As you get going, keep in mind as to “why” you are doing “what” you are doing.
Frankly speaking, this is the real Mission and Vision statement of the business.
For instance, Big corporates shell out millions of dollars to copywriters to write it, ideally, it should be written by the founder himself because that is his or her vision.
Case study:
Wholefoods(now a part of amazon.com) stands for selling the highest quality natural and organic products available.
Their customers know and understand Wholefoods purpose, they don’t go to their stores asking or looking for potato chips or coke or junk food.
This very “WHY” adds rock-solid positioning for wholefoods and is one of the reasons for their success.
I shall be writing more about entrepreneurship and management leadership stance in my upcoming articles. I hope you would find these tips or pointers useful in your journey.
In case if any of my readers or LinkedIn connections want any help pertaining to their startup ideation, you are more than welcome to reach out to me at riteshmohan@yahoo.com.
(References: Just tell it – Nike’s story- fastcompany.com article; reference book “Rework” by Jason Fried and David Hansson; My learnings from attending Middle east retail forum, thanks to organisers & management of Retail Images group of Publications.)
Ritesh Mohan is a passionate retail professional with over 21 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. Ritesh specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.
Recently, I was asked this question by one of my Linkedin connection, who was responding to my article on Omnichannel retailing.
His question prompted me to think about Phygital evolution more holistically and I realized that though every retail or digital consultants/ forums have been shouting from the rooftops for seamless multichannel integration which is the key to successful retailing.
This is spot on but I would like to present a case study of one fast fashion brand that could be the exception to above rule. This brand is highly successful and is questioning the status quo of buying & selling processes that are normally followed by retailers.
Ladies and Gentlemen, Let me introduce you to Primark (hi-street fashion retailer) who does not have an e-commerce arm nor e-commerce website.
Whether Primark is right not to sell online, there’s no denying its success. This is one high street retailer that is prospering during rough economic circumstances.
The stats tell the story:
In 2017 the retail business generated a revenue of approximately 7.1 billion pounds.
As of 2018, it ranked is the second largest clothing retailer in the UK, following Marks and Spencer, with a market share of approximately seven percent.
The company now has 345 retail stores located in eleven countries across Europe and the rest of the world, including the UK, the Republic of Ireland (trading as ‘Penney’s’), Portugal, Spain, Germany, the Netherlands, Belgium, Austria, and France. Italy and the U.S.
These figures mean that Primark doesn’t necessarily need to be in a hurry to open up an e-commerce site, as it still has room for growth offline.
Why is Primark not keen to move towards “Omnichannel” platform?
Primark believes in the fact that “if it ain’t broke, don’t fix it”.
In no way does a transactional site fit in with how Primark is growing. Its strategy is store based.
Associated British Foods, Primark’s parent company, outlined the outlook for its business divisions which reiterated its commitment to the high street and plans to grow space by 10% in the coming year.
The shopping tactic for Primark customer is to get in, grab a basket full of low-priced garments, and get out again with as little hassle as possible.
It’s not experience based, its product based which means that a multi-platform business isn’t a necessity as it is for many of its higher priced high street rivals.
It would take an awful lot of £1 pairs of pants to offset the cost associated with setting up and running a transactional site.
Using Power of PR rather than advertising:
It relies on strong PR, word of mouth and its stores to do the talking. Any big budget marketing campaigns would only serve to eat into the margins and nudge the prices up.
Having worked with another fast fashion brand Forever 21 in the past, I completely understand the business model i.e. to strike a balance between fast fashions at the lowest possible price. The same is true and relevant in case of Primark. Any changes in variables could prove a disaster for fast fashion value retailers.
In Primark’s case, it’s a bold move not to jump into online because everyone else is doing it but to stand firm with a strategy which is working for the business.
I would love to share my retail wisdom acquired by handling fashion brands with any of my connections or regional retailers who need bespoke solutions to their current issues at hand. You may reach me on riteshmohan@yahoo.com
About the author:
Ritesh Mohan is a passionate retail professional with over 20 years in the Retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development and Brand management, Retail Operations, Sales Management and Franchising & Business Management. He strongly believes in empowering business owners with his wisdom & experience of around two decades in the industry.
“Is your social media strategy working for your brand?”
We all know that social media marketing is a force that one cannot ignore. The new media requires a new strategy and mindset to leverage it.
Loser’s mindset
The most common mindset in today’s retail companies pertaining to social media is to hire a social media resource (headcount) to their existing marketing team & this would get them to top of mind recall in their targeted customer’s minds.
Few premises for the above belief in many retail companies:
Social media is easy to handle and does not require great efforts nor any specialized skillset resource.
Putting posts about their services and offers is all they mean with “content”. Flashy artworks, offers/promotions, and beautiful product shots are all they know about content management.
They fail to identify, social media channels as a source of revenue and customer engagement.
Basically there is a lack of strategy to handle this new form of media.
With the popularity of Instagram Stories, Facebook Live, and messenger apps have fundamentally changed how retailers interact with consumers online.
Simply posting photos or updates to a branded social profile won’t cut it anymore.
Need some Strategy for reconsidering your social media?
Here are a few retailers that have winning social media strategies:
Case 1: Birchbox
Birchbox uses Facebook Live to share great content and engage with fans. The cosmetics brand regularly runs Facebook Live videos in which members of the company share news, give away prizes, and answer questions.
According to MarketingDive, Birchbox’s top-performing stream “lasted 40 minutes and had an average view time of 10 minutes among the nearly 50,000 viewers who participated live.”
Strategy delivering result:
Birchbox sees the live video as a two-way street. It helps Birchbox engage with target audiences in real-time, but it also allows consumers to interact with the brand. The retailer approaches live streams as Q&A opportunities with audiences where Birchbox can market the products included in their monthly subscription boxes and educate audiences about the brand.
While some Middle Eastern retailers might still be wondering whether to consider live video as part of their strategy, Birchbox (the online beauty retailer) has been bullish from the start and is an early adopter of Facebook’s new live video feature.
Case 2: Born Originals
German fashion brand Born Originals has a large and engaged Instagram following.
For the benefit of my readers, Born Originals creates customized sneakers and leather goods.
Born Originals also makes good use of Instagram Stories. Their account is filled with gorgeous photos from the company and their customers alike.
I hope my article would help in giving directions to business owners and retailers in the Middle Eastern region & would force them to think differently and innovatively with their existing businesses.
Learn how food delivery apps like swiggy, zomato makes their money, click here.
Ritesh Mohan is a passionate retail professional with over 20 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.
Technology emerging as the savior for Beauty retail
Background:
As per figures released by Euromonitor International, Beauty retail or Beauty is one of the most promising sectors for the future growth of the retail segment & is valued at USD 9 billion in the Middle East alone.
Our generation is really blessed in terms of technology that we have at our disposal, especially computing devices in the form of smartphones.
My inspiration to write this article comes from a recently concluded webinar wherein I was on a panel discussion with industry leaders and I spoke on the topic of finding a competitive advantage amid cluttered & oversaturated beauty sector.
Making technology initiative – the core of the Beauty retail business.
With the emergence of Pandemic, covid19, the entire world of business has changed.
we are no longer in the world wherein we all had a good time, meeting our customers physically (physical interaction) and getting to know their preferences and behaviors.
The world is now embracing covid19 and adapting itself to live along with it.
The road to recovery is now slow and challenging.
Here comes our biggest friend i.e. Mobile and Web.
Both have the power to transform our current business model and the way we interact with our customers currently.
My article is my attempt to highlight initiatives of such beauty brands in adopting technology as an integral part of their overall strategy and how to find a niche for new aspiring entrants into the cluttered world of beauty.
As consumers embrace technology in their everyday lives, notably through the increasing use of smartphones, the boundaries between the virtual and real-world become increasingly blurred.
Who is driving this digital growth transformation for the brands?
Consumer’s preferences have gone under transformation during lock-downs which has resulted in giving rise to contact-less transactions using eCommerce.
Although discretionary spending has reduced post covid19, the market has witnessed a consumer behavioral shift towards safe, sustainable, and reliable products.
Purchase behavior is shifting from Specialty stores to specialized eCommerce platforms.
Technology playing its role
Skincare:
Demand for high-tech treatments at home has given rise to a range of electronic devices whose claims range from improving the efficacy of skincare products to replicating anti-aging treatments in salons.
Skincare diagnostic tools, from DNA testing to skin analysis, YouTube videos, and diagnostic applications, are all adding to consumers’ experience, both in-store and online, thus affecting purchase decisions.
Diagnostic tools have had a technology make-over and now come in the form of online questionnaires, apps, or in-store devices.
From Sephora’s skincare IQ to Harrods’ Ioma machine, consumers’ desire for customizing their skincare is stronger than in any other category.
Digital apps like OKU (an at-home device and app that analyses skin condition),
L’Oréal’s Make-Up Genius and Klara (an app that sends pictures of consumers’ skin to dermatologists) aim to offer professional skincare analysis in the comfort of consumers’ homes.
Technology in beauty cosmetics playing an integral role in payment processing
Sephora’s latest cooperation with Apple to combine Apple Pay with the Sephora app and create a Sephora Wallet.
Learn how lipstick is being used as an economic indicator, click here.
Customer engagement and Omnichannel experience
One such retailer that transformed its customer engagement and Omnichannel experience is Ulta Beauty, America’s largest beauty specialty store.
Its Connected Beauty vision has allowed Ulta to seamlessly manage real-time inventory across 20,000 products and 800 stores as well as serve customers with in-depth, personalized recommendations, crowd sourced reviews and how-to-videos.
The brand’s Beauty tip workshops actually encourage shoppers to play with products before making any purchases.
Ulta Beauty has taken their loyalty program to a different level by launching a social media platform specifically designed for loyalty members to talk to each other about products and have beauty-focused discussions.
Another brand that is spearheading technology-driven beauty engagement is SEPHORA.
In principle, Sephora’s success comes in part from the retailer’s reputation for always having the newest and best brands.
Both Sephora and Ulta have “really managed to crack what experience in beauty is.” “Experience & technology” is the core of their strategy.
Check out Sephora’s virtual artist cheek try on an app.
New Emerging trend in the Beauty Retail – Organic cosmetics or vegan beauty.
The global vegan cosmetics market size is projected to reach USD 20.8 billion by 2025. (global estimate).
It is growing at a rate of 7% currently (pre-covid).
Increasing concerns regarding health & safety, consumer awareness about the use of animal-tested products, and rising importance is given to environmentally viable products that are likely to stir up the demand for vegan cosmetics.
Beauty Retail – Brands investing in scientific research
Brands like Beauty without Cruelty, MU London organics, and Bare Blossom are investing heavily in research activities.
Using ingredients that are plant-based.
Using more fruit based ingredients instead of synthetic dyes.
The sustainability component in packaging like Use of glass containers and recycled paper, no plastic containers etc.
Steps that a beauty retail entrepreneurs or an aspiring retailer need to take to enter the market
-Using smart branding and carefully designed packaging, innovative brands are able to differentiate themselves from their competition;
– Focus the product USP on Vegan & organic ingredients in sync with governmental regulations and industry certifications.
-Using Stories To Stand Out And Get Ahead In The Beauty Industry
-Create your own audience, doesn’t matter how niche that audience is.
-Adapt the Omnichannel approach – sell online as well as a tie-up with some good distributor or retailer for on-ground presence.
They connect you digitally to the consumers who want to sample your product.
Later, you can follow up with that consumer and turn them into customers and evangelists for your brand.
-Keep pivoting your business by looking at various emerging niches in the segment.
Brand Sweat, provide beauty products to women who enjoy being active and don’t want their look to be compromised
Conclusion:
We are moving towards a reality where consumers can easily get anything, anytime, anywhere.
Retailers that do not take the essential first step to differentiate themselves through innovative customer engagement risk becoming irrelevant – forever.
Watch the video which summarizes the role of Artificial Intelligence in beauty retail
About the author:
Ritesh Mohan is a passionate retail professional with over 22 years in the retail sector, handling some of the biggest brands in beauty, fashion, and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in the Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.
“What business is McDonald’s into?” was the question once asked by the founder of McDonald’s Ray Kroc to graduating students of a prestigious Management school. Most of the students quickly replied, “Selling hamburgers and fast food”.
founder of Mcdonald’s
Ray Kroc smiling replied, “We are a Real Estate Investment Trust (REIT)”.
A lot of us don’t realize that McDonald’s isn’t really a burger selling restaurant chain. Well, it is, but not purely. Peel back the layers and you’ll find that the corporate entity is actually one hell of a real estate company.
Former McDonald’s CFO, Harry J. Sonneborn, is even quoted as saying, “we are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is that they are the greatest producer of revenue, from which our tenants can pay us our rent.”
The fast-food giant came from humble beginnings. The McDonald brothers, sons of Irish immigrants, first opened up a hot dog stand in 1937 in Pasadena before venturing out to open their first restaurant. Ray Kroc, after six years of working with the McDonalds brothers, elected to buy them out and became the owner of McDonald’s Corporation in 1961.
Core brand strategy was coined by their CFO, Harry J. Sonneborn,
Instead of making money by selling supplies to franchisees or demanding huge royalties…the McDonald’s Corporation became the landlord to its franchisees.
They bought the properties and then leased them out – at large markups. In addition to that regular income, the corporation would take a percentage of each shop’s gross sales.
Today McDonald’s makes its money on real estate through two methods. Its real estate subsidiary will buy and sell hot properties while also collecting rents on each of its franchised locations. McDonald’s restaurants are in over 100 countries and have probably served over 100 billion hamburgers. There are over 40,000 locations worldwide, of which only 15% are owned and operated by the McDonald’s corporation directly. The rest are franchisee operated.
It’s a brilliant strategy. Being able to collect on rents helps insulate them from the ups and downs of the business. You have to make rent after all.
The success of McDonald’s can also be attributed in part to the taste of the iconic fast food chain’s shakes and burgers. But the real secret sauce has everything to do with how the company has quietly become more a real estate company than a restaurant chain.
Additionally, in the last two decades, real estate values have increased, which means the overall collateral value of the company’s property has increased, too. So when McDonald’s wants to borrow money to make new investments, it can do so at relatively cheap rates.
McDonald’s is a great example of how diversification helps to not just grow a business’s income but also lower its financial risks. McDonald’s is both a fast food and real estate business.
Learnings from McDonald’s for entrepreneurs or start-ups is that whatever business you might be having, you need to plan for “Business Insulation” i.e. to insulate it from any external factors like economic recessionary pressures or from the competition. Always try to have a backup plan which can keep your business afloat even in turbulent times.
Does your Business has a backup plan?… (If not, then reach me on riteshmohan@yahoo.com, I would be more than willing to render help to my retail fraternity members).
About the author:
Ritesh Mohan is a passionate Retail professional with over 20 years in the retail sector, handling some of the biggest brands in beauty, fashion and fragrances retail & FMCG sector. He has been instrumental in the growth of some of the regional brands as well in Middle East region. He specializes in Retail management, Product development, Brand management, Retail Operations, Sales Management, Business Management & Empowering business owners with his wisdom & experience of around two decades in the industry.
