Internet growing as beauty buying channel
PORT WASHINGTON, N.Y. A new study by The NPD Group found that the Internet is one of the fasted growing areas for beauty product shopping. Sales over the Internet now account for 4% of all sales or about $1.7 billion in the more than $42 billion dollar beauty industry. While this number may seem small, NPD says more and more women are buying online.
The NPD found that one in ten women across all age groups tell NPD they shop for beauty products, such as makeup, skincare, and fragrances, on the Web. The study also found that 43% of women who shop for beauty on the Internet say they spent more online in 2006 than they did in 2005. The number one reason they use the Internet is convenience. More than seven out of ten (74%) of those women say it “saves time” and about 70% say “it’s easier/quicker to shop online than a store.”
Women with higher income were more likely to shop online for beauty products. According to The NPD, 15% of women with household incomes at $75,000 or greater shop online, versus 10% of women with household incomes of $35,000 to $44,000 and 7% of women with household incomes of less than $35,000.
The sites women reported using most often were Drugstore.com, Sephora.com, Avon.com, Clinique.com and Bathandbodyworks.com
Best Buy raises outlook for U.S. growth
MINNEAPOLIS Best Buy announced today that it raised its outlook for new superstores in the United States by 40%. The company also said the number of stores could now approach 1,800 in the United States and Canada, up from its prior growth plan of 1,400 stores. This new total assumes 1,400 U.S. Best Buy superstores, up from 1,000 previously; at least 200 Canadian superstores (including both Future Shop and Best Buy stores); and up to 200 Pacific Sales stores. Best Buy also reiterated its commitment to growth in China via both the Five Star and Best Buy brands. The company currently operates 852 U.S. Best Buy stores, 47 Canada Best Buy stores, 122 Canada Future Shop stores and 14 U.S. Pacific Sales stores. On average, the company has historically increased North American square footage by approximately 10% per year.
“We continue to generate strong returns on new store openings, and we’re growing our market share with our customer-focused strategy,” said Brian Dunn, president and coo of Best Buy. “We intend to press this advantage in the marketplace. We firmly believe we can extend our new store runway, profitably, because we’ll continue to focus on three things: improving how well we serve existing customers, attracting new customers and enhancing our store profit model.”
Wal-Mart arms itself with more information
PORT WASHINGTON, N.Y. The NPD Group is the newest provider of consumer information to Wal-Mart and Sam’s Club. The Port Washington, N.Y.-based research company announced this morning that it had reached a deal to provide access to the purchasing behavior information of NPD’s 3.5 million-member consumer panel.
The move is the latest example of Wal-Mart’s increasing reliance on consumer insights to support efforts to tailor merchandise assortments to specific consumer segments. The strategic shift began roughly two years ago when the first of an ongoing series of personnel moves in the marketing and merchandising departments ushered in a new era of fact-based decision-making.
“NPD information will give Wal-Mart an extensive cross-category view of what’s happening across all segments of the marketplace and all consumer demographics,” said Robert Atencio, vp of insights and customer strategy at Wal-Mart. “This is the kind of intelligence we need to continue to successfully grow our business by understanding what today’s consumer is looking for and tailoring our business to deliver it.”
NPD’s data is rich in that it tracks behavior across categories such as automotive aftermarket, consumer technology, entertainment, apparel, footwear, foodservice, home, small appliances and home improvement. Information available to Wal-Mart will include market measures such as market share, price points, consumer demographics and channel trends, in addition to the ability to customize research reports to address specific needs.
“We are excited to be able to provide Wal-Mart, Sam’s Club and their vendors with what we feel is unparalleled information for identifying market trends and opportunities and working collaboratively to facilitate better business decisions,” said Bill Lucas, president of NPD’s retail business group.
The deal with NPD appears to supplement an agreement Wal-Mart reached with ACNielsen last August that designated that company as the sole provider of consumer panel services. The deal with ACNielsen was intended to complement consumer segmentation and targeting applications Wal-Mart was already using that were provided by the Spectra division of the Nielsen Company.
At the time, Wal-Mart senior vp of marketing, Stephen Participants on the panel report what they purchased, where they purchase it and the price paid. The deal calls for NPD to produce reports customized for Wal-Mart, enabling the retailer and select vendors to view information for Wal-Mart and Sam’s Club consumer segments, category hierarchies and custom trading areas.
Quinn, said, “the partnership we are announcing with ACNielsen today enables Wal-Mart to gain valuable insights into shopping behavior, category dynamics and overall business activity. It will enable us to understand our customers better than ever before. And the better we understand our customers, the better equipped we will be to offer them the merchandise they want, when and where they want it.”