Redefining beautiful: black cosmetics companies and industry giants vie for the loyalty of black women

Redefining beautiful: black cosmetics companies and industry giants vie for the loyalty of black women – Industry Overview

Caroline V. Clarke

Redefining beautiful…” For years, this bold catchphrase has been Cover Girl’s calling card, helping to make it the leading cosmetics brand in the nation. But only now is Procter & Gamble, Cover Girl’s $29 billion parent company, finally making good on its stance as an innovator.

After 32 years of defining beauty standards with mostly blue-eyed blonde models, such as Christie Brinkley and Cheryl Tiegs, Cover Girl is sporting a fresh new face–that of tawny-toned model Lana Ogilvie–and courting a brand new customer: the African-American woman. Cover Girl is not alone.

After decades of being socially and economically ignored by general-market cosmetics companies, the black female consumer has suddenly become the $4 billion beauty industry’s new darling. From prestige department store brands such as Fashion Fair and Prescriptives, to lower-priced drugstore staples such as Revlon, Maybelline and Posner, cosmetics makers are scrambling to win the black woman’s attention–and her dollar. Even direct marketers Avon and Mary Kay, who have long enjoyed a loyal following of African-American consumers, are beefing up their efforts. This, despite the fact that their market is not perceived by analysts to be threatened by retail activity.

Why the sudden explosion of interest? The reasons why are as plain as the numbers. Retail sales of ethnic hair care, skin care and cosmetics products grew 6% in 1992, pushing the market to $547 million, according to a study by Packaged Facts Inc., a New York-based research firm. Hair care, the oldest and largest segment, with sales of $390 million, gained only 4%. Ethnic skin care, with sales of $75 million, grew a respectable 7%. But ethnic cosmetics blew past both categories with double-digit growth of 15%, reaching sales of $82 million.

Packaged Facts projects the ethnic cosmetics segment will grow by 22% in 1993 and continue to build, eventually reaching sales of $162 million by 1997. Tack on skin and hair care for a grand 1997 total of $732 million in anticipated sales of ethnic beauty products.

Set against a backdrop of weakening industrywide sales and 1990 census figures–which show that the nation’s 16 million African-American women are younger (30% are in the prime purchasing age of 18 to 34), better educated and more affluent than ever before–the appeal of black women as the sought-after segment of the moment is undeniable. Factor in that the black female population is growing at twice the rate of its white counterpart–and eureka!–beauty makers large and small have found a new way to impact the almighty bottom line.

No wonder more than a dozen makeup lines and line extensions have been thrust at the black female consumer in the last two years. And there are more on the horizon. Without question, the onslaught of competition in the ethnic cosmetics market is good news for black women, who for the first time have the dizzying array of cosmetics choices that white women have long enjoyed. But it could herald disaster for smaller and some black-owned companies, which lack the deep pockets needed for massive advertising campaigns as well as the financial clout to demand adequate shelf space.

There is no way for the beauty industry’s major players to hit their sales targets without cutting deeply into the consumer bases of smaller, more established ethnic cosmetics companies in both the “class” (expensive/department store) and “mass” (lower priced/drugstore) markets, many of which are black-owned.

While there is widespread debate over the potential size of the ethnic cosmetics market (interpreted at ranges from $100 million to $900 million), analysts, retailers and marketers do agree on one point: It is not large enough to sustain the number of players now competing.

And who will be left standing when the dust settles? Most black-owned companies respond with unqualified assurance. “This is not going to be a problem for us,” says Alex Erwiah, owner and CEO of New York-based Naomi Sims Beauty Products Ltd. “Right now it’s in fashion for [industry giants] to market to black people. They’ve finally discovered that black people have money. But they think the market is much bigger than it is. When they realize its real size, they will pull those products back.”

Jerri Baccus Glover, a senior vice president of marketing at Revlon, who is black, disagrees, insisting that the commitment of companies like hers to the ethnic market has been underestimated. “Smart marketers don’t make investments in businesses for a year and then walk away,” Glover says. “This is the future of cosmetics. Everyone knows that. This is definitely not a short-term investment for Revlon.”

Getting definitive numbers on how these companies and their products are faring is near impossible, since, for competitive reasons, marketers are very secretive about sales figures and brand shares. Even industry analysts provide conflicting data.

Only one thing is clear, says Lafayette Jones, president and CEO of Segmented Marketing Services Inc. (SMSi), a Winston-Salem, N.C.-based firm that specializes in ethnic marketing: “There will definitely be a shakeout.” Of the general-market companies, Jones says Procter & Gamble, which, with Revlon, is among his clients, “has the potential to do this right, because they are thorough, whether they’re marketing dishwashing detergent or Cover Girl cosmetics.”

But Jones, whose company also works with Chicago-based BE 100s companies Soft Sheen Products and Johnson Publishing Co., parent company to Fashion Fair Cosmetics, says it won’t necessarily be the black companies that fall, because for them “it’s a life-and-death struggle.” If anything, the increased competition will sharpen the efforts of black companies. “Very few people understand the power of African-American companies already in the market,” Jones says. “They’re quick. If they don’t meet the needs of their consumer, they know someone else will and they’ll be out of business. African-American companies are going to do whatever it takes.”

The Class Struggle

Prior to 1991, only four brands for black women existed in department stores, where black women spend about 23% of their cosmetics dollars, according to Procter & Gamble research. All of the established ethnic lines sell both cosmetics and skin care. Three are black-owned.

Naomi Sims Beauty Products debuted in 1986, followed by Paris-based Gazelle International Inc., which reached the United States in 1987. When BE last visited these companies (see “Battle of the Vanities,” March 1989), Sims’ line was in 100 department stores, including R.H. Macy’s and Saks Fifth Avenue. The company, which generated 1988 sales of about $5 million, was anticipating an 80% to 100% increase for 1989.

But Sims didn’t anticipate the financial troubles that would rock the retail industry. The bankruptcy of chains such as Macy’s helped slash Sims’ distribution in half by 1991. Still, the company managed gross sales of $5 million in 1992, says CEO Erwiah, $2 million of which was generated by fresh marketing efforts in London, Paris and five West African countries.

Gazelle, which grossed about $1.5 million in the United States in 1988, was busily beefing up its American advertising campaign in 1989. The company retreated from the U.S. market in 1991, the same year that beauty powerhouse Estee Lauder entered the ethnic market. Gazelle’s owners could not be reached for comment.

Estee Lauder’s entry into the ethnic market sent shock waves through the industry. Long regarded as the premier cosmetic line, Lauder’s image was not just linked with white women, but with white women of imposing wealth and refinement. Now the grande dame of beauty was courting black women, not just with one line, but three: the flagship line (Estee Lauder) was expanded into darker shades, as was Clinique, with its Color Deeps line.

Lauder’s greatest effort–and success–has been with Prescriptives All Skins, which offers an unprecedented 115 custom-blended shades. The line was launched with a $2.5 million media blitz and was quickly credited with luring 4,000 new customers of color–a month.

How much the increased competition from Lauder played into Sims’ and Gazelle’s difficulties is unclear. Longtime players Flori Roberts and Fashion Fair, however, have no trouble quantifying the damage done to their sales: They say it doesn’t exist.

Lakewood, N.J.-based Flori Roberts, named for its founder–a white woman–began marketing high-end cosmetics to African-Americans in 1965. The company, which was acquired by Ivax Corp., a Miami-based holding company, in July 1992, continues to flourish, selling a line of 160 products through about 1,000 stores. Packaged Facts estimates Flori Roberts’ 1992 revenues were between $25 million and $50 million.

In April 1992, Flori Roberts introduced a new face cream, endorsed by its spokesperson, singer Nancy Wilson. Skin care is a venue where general marketers have left a gaping hole for African-American women, says the company’s marketing director, Gail Shelton, who is black. “We visibly age at a slower rate than Caucasians,” says Shelton. “The general market’s anti-aging creams are just too heavy for black skin. But that’s all they offer, because that’s what their primary consumer needs. The African-American woman is our primary consumer.”

Johnson Publishing, the Chicago-based parent company of Fashion Fair Cosmetics, became the first black-owned company to crack the department store market in 1973. Advertising in its own sister publications, Ebony and Jet magazines, the cosmetics company took off, quickly outselling Flori Roberts. Fashion Fair’s more than 310 products are currently sold in about 2,000 stores internationally. Its revenues are estimated at $60 million to $100 million annually.

“We have been number one for the last 20 years,” says J. Lance Clarke, senior vice president and general manager of Fashion Fair. “If someone comes along and knocks us out of that spot, they deserve it. But we’re not going to let them do it.”

Clarke notes that Fashion Fair was born directly out of the refusal of white cosmetics mavens to acknowledge the ethnic market. John Johnson, founder and CEO of JPC, “went around to Lauder and Charles Revson, the head of Revlon, more than 20 years ago and told them, ‘there’s an ethnic market out there and you could capture it by advertising in Ebony,'” Clarke recalls. “They said no. They didn’t want the market.” Now that they do, says Clarke, Fashion Fair is ready for “war.”

Late last year, the company redesigned its packaging, deepening its signature pink color for a richer, more elegant appeal. Sales in 1992 were up about 12% over 1991, says Clarke. In Macy’s Herald Square, Fashion Fair held onto its top spot in ethnic sales, pulling in $1.5 million last year. This year, a new line of skin care products was introduced, as well as a trio of new colors for nails, cheeks and lips. Conceding that Fashion Fair may have slipped into complacency in the past, Clarke says, “Those days are over.”

In what may be seen as an extension of Fashion Fair’s revitalization, the company is no longer limiting itself to the “class” market. Finally realizing that there are distinct customers–one who buys expensive makeup and one who doesn’t–Johnson Publishing introduced Ebone, a mass-market brand of cosmetics. Launched in September 1992 toward a slightly younger consumer than Fashion Fair (18 to 34), Ebone is now in about 4,000 stores. According to Towne-Oller & Associates Inc., a New York-based consulting firm, Ebone managed to gain a 1% market share for 1992, despite its late entry. Linda Johnson Rice, president and chief operating officer of the company, is overseeing the development and marketing of the line.

In Search Of Mass Appeal

In moving into drugstores, Ebone finds itself in the midst of the most intense battle in the beauty war. The more earthy mass market accounts for roughly 53% of African-American cosmetics sales, according to Procter & Gamble. And so, it is there that cosmetics rivals attempt to literally squeeze each other off the shelves.

South Plainfield, N.J.-based Posner Laboratories and black-owned J. Strickland and Co., the Memphis-based maker of Zuri cosmetics, are the oldest players in the mass-market arena. Both have been hawking ethnic cosmetics for more than 50 years. Posner was by far the industry leader prior to 1991, while Zuri’s market share was in the single digits.

But Posner’s security was shattered in 1991 when Maybelline launched Shades of You. The new line claimed to break with the past–when general marketers literally made the same old makeup formulas browner and called them new. Shades of You touts a formula that contains minimal amounts of titanium dioxide, a chemical that causes the foundation to make darker skin tones look ashy. Maybelline predicted that the line would make $15 million in its first year. Analysts say it did.

According to Towne-Oller & Associates, Maybelline captured 35% of the ethnic cosmetics market in 1991, where Posner had 53%. Other 1991 entrants made a lesser, but significant, impact. Arthur Matney’s Tropez garnered an 8% share; Pavion’s Black Radiance, about 1%.

Lost in the shuffle was Simply Satin, a 45-item line introduced in 1990 by Carson, Calif.-based WOC Products, a black-owned company that started out in hair care. The competition has put a lock on WOC’s attempts to expand Simply Satin’s distribution. Without it, says WOC President and CEO Frank Davie, the line won’t survive another 18 months.

In November 1991, Revlon introduced Darker Tones of Almay. An extension of an already specialized line (hypoallergenic), it made a negligible impact. Gunning for Maybelline, in August 1992 Revlon’s ColorStyle hit mass outlet shelves. ColorStyle, in just five months, garnered a 4.7% market share. Maybelline dropped off by only 1% in ’92; but Posner plummeted by 14%, according to Towne-Oller & Associates.

By last February, Darker Tones of Almay already seemed to be doing a disappearing act, although Revlon representatives deny that the line is being discontinued. But ColorStyle is clearly pushing forward. As of March, the brand was in 6,400 stores (compared with 28,000 for the Classic Revlon line), outpacing Posner, Zuri, Simply Satin, Ebone and Cover Girl in market share.

This is not Revlon’s first move into the ethnic market. It launched its Polished Ambers line twice, first in the late 1970s, then in the early ’80s. Twice it was discontinued after failing to meet projected sales.

If Revlon has been halfhearted in promoting its ethnic cosmetics in the past, ColorStyle–more than three years in development — represents a major turning point. Time was taken because “we wanted it to be right,” says Glover.

Contrary to the findings of Cover Girl’s focus groups, which concluded that black women did not want a separate, segregated line, Revlon found that the African-American woman wanted a line from a major company that specifically addressed who she was. Accordingly, all 98 of ColorStyle’s products were given names that invoke images of parts of the world where black culture is rooted. There is Brazil Nut liquid makeup, West Indies Wine lipstick and–the most primitive reference–Jungle Orchid nail enamel. The signature purple and gold packaging was paid special attention. But Revlon’s true focal point was its ad campaign, formulated in-house and believed to cost in the millions. (The $1.5 billion company spent about $5.8 million on makeup advertising in 1991, according to Advertising Age magazine.)

Crucial to advertising this line, says Glover, “is making sure that you reach the consumer, talk to her in a way she understands, make her feel that her brand is on an equal level with every other brand. The visual interpretation has to be multifaceted.”

In June 1992, African-American model/actress Veronica Webb joined fashion superstars Cindy Crawford and Claudia Schiffer as a Revlon spokesmodel, becoming possibly the first black woman to snag such an exclusive contract. Lana Ogilvie signed with Cover Girl also in June–a circumstance that has Revlon and Cover Girl each maintaining they were the first to hire a black spokesmodel. (Although Webb’s focus is ColorStyle, she also appears in Classic Revlon ads.)

Addressing the argument put forth by many black-owned companies–that only African-Americans know or care about what black consumers want or need–Glover is quick to note that much of the ColorStyle team is black, including the senior director of product development, the senior chemist, the vice president of market research and, of course, Glover herself, who has been with Revlon for 14 years. “We were not suddenly hired for this line,” she says. Cover Girl declined to give such specifications.

Appearing To Care

Another of Revlon’s key strategies involves community tie-ins. The company is committed to avoiding the impression that “Revlon, this big corporation, identified a need gap, made all this money, and then just walked away from it,” Glover says. Toward that end, Revlon is involved in scholarship programs with the United Negro College Fund and Essence magazine, among other groups.

Maybelline and Cover Girl are also courting the community. In celebration of Black History Month, Maybelline donated more than $100,000 to the National Coalition of 100 Black Women’s Literacy and Life Skills Development Fund to aid at-risk teenagers and single mothers. Procter & Gamble gave about $1 million to various African-American organizations in 1991, but that’s out of $32 million in total contributions. Ralph Smith, vice president of black-owned WOC Products, is unimpressed by such gestures. “There is a disproportionate amount of money spent by our communities on these products compared to what is recycled back into our communities,” Smith says. “Basically, they’re throwing a few pennies at community programs, getting a lot of publicity for it and appearing to care.”

The Ethnic Market: More Than Skin Deep

For all the splashy ads and goodwill money passed around, many observers still maintain that general marketers are at a fundamental disadvantage when it comes to reaching and, more importantly, gaining the trust of African-American consumers. However, the direct-market companies seem to have found a way.

Although direct-marketed brands, such as Avon, remain largely untracked by the industry or its analysts, Procter & Gamble estimates that black women spend 13% of their cosmetic dollars on direct sales. Cosmetics Industry magazine, however, speculates that Avon may have been the actual ethnic market leader in 1991. Miriam Muley, director of marketing for Avon’s African-American business unit, declines to refute or confirm such reports. She does say that the company, which has about 45,000 African-American sales reps, generates “hundreds of millions in African-American sales each year.”

Particularly in the black community, says SMSi’s Jones, “the power of a a fellow church member or a neighbor coming into your home to sell you their products is not likely to be weakened by competition among retailers.”

The greatest challenge the latest entrants on the retail side face is clear: They must first win, then build on, the confidence of a consumer who is somewhat skeptical of all the new attention. “Entering the market is one thing, but to stay in, you have to be able to reach this customer and build a relationship,” says Johnson Publishing’s Rice. “[General marketers] have not done that in the past. I’m not sure they will be able to now.”

Even if they can, and some of the smaller lines are squeezed out of business, says WOC’s Smith, the future for general cosmetics marketers in the ethnic industry remains uncertain. Says Smith: “When they stop spending as much on advertising, it will be interesting to see if those customers still use those products, or will they return to the familiar?”

Rice says they will. And Ebone, although it’s new, may still fall into the old faithful category because of its kinship with Fashion Fair. Ebone’s quality is on par with anything else on mass-market shelves, says Rice, and she expects to capitalize on the tremendous loyalty Fashion Fair customers have traditionally demonstrated. That’s more than the loyalty of an informed consumer to a good product, says Rice. It’s the loyalty of an informed black consumer to a good product put out by an black-owned company.

Ultimately, that loyalty may be the strongest determining factor in the ethnic cosmetics battle. Says Jones: “If it’s a poor product, it’s a poor product, and consumers aren’t going to buy it no matter who makes it. But, all things being equal, black people want to patronize black-owned businesses.”

COPYRIGHT 1993 Earl G. Graves Publishing Co., Inc.

COPYRIGHT 2004 Gale Group