From Farm to Fashion: The lifecycle of your fabulous frock

If you are reading this blog, you are likely wearing clothes. Well... maybe thats an unfounded assumption, but I feel fairly confident that you likely at least own clothes.

But what do you really know about your clothes (other than they are devilishly stylish and you look awesome in them)?

This post is dedicated to three of the dearest things to my heart: agriculture, human rights and fashion. Odd combo, I know, but a wholesome combination of my education, academic research and professional life.

In Western countries we feel good about ourselves because we've abolished child labor, cracked down on pesticide application methods and created parameters around working conditions. What we often fail to recognize, or choose to ignore, is that the majority of physical things we enjoy- particularly fashion- were constructed in conditions we have outlawed.

As we've seen a purchasing shift to organic, fair-trade and sustainably produced foods, we also must apply these concerns to clothing because realize it or not, our clothing also comes from soil, plants and farmers. Not For Sale analyzed the Apparel Industry Trends from 2012 by grading 300 apparel brands according to their use of child labor, minimum wages, watchdog efforts implemented for workers, training and the traceability of their materials from farm to fashion. Using Free2Work data, grades indicate to what extent companies have traced their materials and established management systems throughout supply chains.

The results are sobering. I won't break down every detail, but here are some high level brands that fall at the top and bottom of the pack.

Photo from Not For Sale

The Good: A's and B's
Good & Fair
Timberland
H&M
prAna
Alta Gracia
Maggie's Organics
adidas
PUMA
Patagonia

The Ugly: D's and F's
Lacoste
Abercrombie & Fitch
American Eagle
Forever 21
Carter's
Express
Sketchers
Walmart
Fruit of the Loom

By and large, the most non-compliance, or bad effort, is located in the traceability, monitoring and worker rights regarding raw materials. This means farmers. And from my research experience with small-scare farmers, I know this likely points to unprotected application of poisonous pesticides, extreme working conditions and minimal compensation. In conditions such as these poisoning is rampant, and often left untreated due to hospital accessibility. Birth defects increase generation to generation as the land and methods become more corrupted and corrosive.

Some of the amazing farmers I worked with in Ecuador

"So what?" you may be thinking, "I can't afford to buy organic" or "I don't like dressing like a hippie". Fair enough. Look, I love my sweater dresses and patent pumps as much as the next girl. All I want to bring to light is the interconnectedness of the things we, as Westerners, take for granted. Next time you go shopping, think twice about purchasing the PUMA instead of the Sketchers that look almost the same. If you love a company, research it. Even if you decide to keep buying from a brand that has a bad ranking, be informed. It's time to stop living in a surreal fantasyland where this season's must have's are born on the runways during New York Fashion Week without questioning its conception.

I'm not trying to give a massive guilt trip- I am guilty of these things too. But rather than being ignorant about how our clothes are made, its time to get informed. Let's make decisions knowing that in the interconnected world we live in, each swatch of fabric and spool of thread has a history, lifecycle and implication that will come around full circle in the environment and humanity.

I think Leila Brillson of Refinery 29 put it best by saying "In 2012, with child labor so exposed and derided, it's both tragic and unsurprising that companies and producers are even a part of this discussion". There is nothing sexy about turning a blind eye to conditions in which we wouldn't allow our family and friends to work.

E-commerce Boom in Wine

A while ago I wrote about the diversification strategies of Amazon and how they are changing the face of e-commerce. Welp, they struck again.

Continuing their growth as one of the most dangerous players to ever hit e-commerce, just in time for the holidays they Amazon is making its third attempt in branching out into the wine business. Amazon Wine will feature 1,000+ wines ranging from $10 -$100+ (plus $9.99 shipping for up to 6 bottles). Thus far  featured wines come from various locations across this great U.S. Nation, and will be shipped to about a dozen states from California to Washington D.C. Amazon hopes to play the role of middle man/discovery center for wineries who provide their wine and are looking to raise their brand awareness and market sales through the online marketplace. Check out this Google+ Hangout on the topic:

Amazon is not the only retailer upping their game in e-commerce. Wine.com is already the nation's leading online wine retailer, but this week they announced the launch of Wine.com Marketplace, catering to domestic and imported wines with limited distribution channels in the U.S. Their soft launch earlier in the year sold thousands of bottles and encouraged the current venture. They might have an initial leg up on Amazon ifor the following reasons: experience navigating the 3 tier distribution and shipping laws, shipping to 20 states, free shipping with their $49 annual Steward-Ship membership, consolidating multiple wineries shipment to only require one adult signature, and the fact that they are the #1 visited wine website. 

This will absolutely be an interesting head to head competition to keep an eye on. 

E-commerce wine sales are not only taking off in the U.S. UK supermarket Morrisons has launched Morrisons Cellar, the online wine store aimed to boost the supermarket's wine sales by £100 million. The site will feature around 1,000 wines, doubling their in-store lot. Their goal is to help consumers choose wines they will like by using Taste Test technology. Taste Test technology builds personal wine suggestions through profiling which wines customers will like after answering a series of questions (ex: do you prefer black coffee or salty foods). Incorporating short videos helps consumers decide what category they fall into: sweet, fresh, smooth or intense. They've incorporated with social networks by allowing users to share their profile. They hope to use Taste Test in-store starting in 2013. 

So what does this mean for the wine industry?

Well, clearly the way wine is being sold is changing. Shipping & distribution laws will likely slow down the transition to e-commerce for many, as these pioneers sort it all out. Additionally, wine--- specifically nicer wine-- is a sensory experience that relies greatly on the knowledge of sommeliers. The influx of wine resources, reviews and profiles online and in apps, a new age of learning about wine is budding. Technological assessments like Taste Test, have the opportunity to democratize wine knowledge by giving access to information and personal profiles, which can be intimidating to some in-person and only available at specific locations. 

Along with democratizing wine knowledge, e-commerce sales could help democratize wine accessibility.  The rise in e-commerce sales of wines could enhance both the ease of trying varietals from various regions and wines from small wineries that used to not be accessible, which would be awesome for Millennial wine drinkers who are curious about experiencing many different brands and varietals they've never heard of, and do much of their wine research online. 

Beauty Boxes: All the Rage

I recently wrote about Birchbox as an awesome KIO program, as I am sure you all read, but now they are facing some serious competition. 

POPSUGAR and Pinterest competitor The Fancy have released their own beauty box services. POPSUGAR is called a monthly must have- it is $35 for full-sized products and premium items work $100. This differs from the $10 Birchbox that only offers sample sizes.

 The Fancy is becoming well known as the Pinterest for shopping. For $30/month subscribers are promised $60 worth of goods in a category of their choice (men, women, gadget, kid, home, media, etc). The bonus of The Fancy is that they let you customize the box and are broadening out of the beauty space. 

Why are these boxes popping up everywhere? It works. Bottom line: its not just a bunch of crap in a box, its discovery commerce & marketing that women actually pay for. It makes money thought selling of actual goods, and is awesome marketing because it has a seamless transition from trying to buying. Plus, its analytics show its seriously targeted. Really, Birchbox has figured out a way to get women to pay home to be marketed to. To prove its loyalty to its 400 partner brands the Brichbox company actually buys inventory wholesale and operates it own shipping department. 

These subscription services are not just a fad, but something consumers and brands alike should pay attention to. 

High-tech High-fashion

New York Fashion Week provided us with some high fashion, and high tech interactions. 

A cool digital story coming out of last weeks NYFW is the Google high-tech googles documentary with Dianne Von Furstenburg. Famed designer Dianne Von Furstenburg gives us a short backstage glimpse of fashion week AND the much awaited Google Glasses. The specs are set to release next year, but Dianne incorporated them into her show- wearing them herself and sending her models down the runway in the futuristic frames. DVF then produced a short documentary video of the event shot entirely with Glass. 

Google glass will reportedly offer a number of augmented reality features, pulling data up before your eyes, for example. From this look at it, they will be high tech and high fashion- my favorite combo. 

Tech highlights didn't just come from storytelling about the experience, though. Some were actually part of the clothing. Rebecca Minkoff featured an audio clutch that cross-functions as a wireless stereo for your bluetooth enabled device. 

This may be the first of many wearable technologies to hit the store front. Another really cool innovation comes from technology product design group Artefact. They have developed Meme, a wearable and shareable camera that allows users to take and post photos in an instant. Another awesome fashion technology associated with Artefact is Move. This awesome athletic wear is actually a sensor-packing clothing with associated mobile app and cloud storage. It outputs your body positioning and muscle movement to help you enhance technique and provide real time work-out feedback. 

The best part about all of these is they are allowing it to be sexy to be a tech geek. Watch out world!

Amazon Diversification: Changing eCommerce or Stretching Too Thin?

Amazon has announced a plan to sell high-end fashion on its website. It could be really cool, or really problematic for amazon for a couple of reasons. First, high-end fashion purchases are specific- they are unique, they fit perfectly, or have some intangible that gives people the moral permission to spend the money. Thus, when brought into an eCommerce space there tend to be a lot of returns because people buy 4 items knowing they are going to return 3 and keep the best 1. Returns are expensive. And likely more than the $79 flat shipping fee offered by Amazon Prime if this happens a few times throughout the year. Secondly, there are already some really great outlets for high-end retail. Sacks, Neiman Marcus, Nordstrom and Bloomingdales all have well-funtioning websites, established discount campaigns, audience research and ways to pique interest when shopping might not be top of mind. Third, high-end fashion is already a crowded ball game. Online competition, discount sites and hubs have been around for years. Plus, how do you really compete with the feeling of spending an afternoon trying on clothes, feeling amazing materials and finding jeans that really fit your thighs? Amazon is going all out, though, hiring models, creating photography, and negotiating contracts.

On the up side, if this endeavor works it could change designer fashion sales forever. Some companies are already worried that their brick and mortar stores will become just a showroom for Amazon orders. Their fears are not unfounded. A recent ComScore report determined that leading mobile retail activities look like this: find a store, compare prices, look for a deal. This idea is called showrooming, and it is very real. Go to the store, find the pieces you like, and order them online for a better deal. 

This is not the only endeavor for Amazon. They have recently developed Amazon Supply to challenge tool suppliers like Grainger, ACME and Fastenal. However, their lack of experience in the category may not do them justice in a category that is firmly based in first hand knowledge and shared trade advice. 

Who knows how it will all turn out but one thing is for sure: these diversification efforts from Amazon may change eCommerce forever, or run them dry. 

Cider: Don't Call it a Comeback!

Hard cider is not just for pilgrims anymore.

Originally brought over by the pilgrims, much cider tradition was lost during prohibition, but in the last 10 or so years its being revitalized and becoming a burgeoning market, particularly for Autumn. Sure, hard cider is only a small part of the overall alcoholic beverage market, but its a rapidly growing niche. According to SymphonyIRI data, hard cider sales at supermarkets and other stores totaled about $71.5 million for the 52 weeks ending Aug. 5. This is more than an 50% increase over the same time last year. Brands are taking notice, with ciders now out from Anheuser-Busch (Mich Ultra Cider) and Boston Beer Co. (Angry Orchard Cider). 

Cider also is appealing to young drinkers because it avoided the extra tax introduced in 2010 because its a fruit-based drink. Millennial drinkers are also said to be the most adventurous with their selections from wine to beer, so cider's boom is likely to resonate well with them. I know I'll be having one this fall!

Ecommerce Rewrites Luxury and Beauty Market

Undoubtedly, e-commerce increases in importance for all industries - from power tools to books, medical supplies to toys, e-commerce is a source of sales like never before. With advancements in technology, proliferation of portable internet devices and increased functionality of social networks, it is safe to assume this retail channel will continue to grow with force.

But two of the most important spaces for online retail are beauty and luxury. Take Estee Lauder Companies for example. In 2012 web sales increased worldwide, reporting 20% growth in the US, 34% in the UK, 40% in China and a whopping 55% in Germany. They've cultivated about 340 marketing and e-commerce sites in 50 countries since 2001. Total sales climbing 10.2% to $9.7 billion earned them the No. 58 spot on Top 500 list of internet retailers. Where those numbers only make up 5% of their total sales for the year, there is no question that web presence is becoming continually important for the sector.

This focus on e-commerce, however, could mean something quite different for luxury clothing brands. Online retail funding for custom-made clothes doubled last year to $328.7 million. Why are venture capitalists investing so much in this market? Because its booming. Custom clothing startups like J.Hilburn Inc., American Giant and Bonobos Inc. are gaining share in the US e-commerce market- winning customers because cutting stores from the supply chain allows for lower price points than department stores who often marked up 3x from factory to store. Putting it in perspective: a men's dress shirt from J.Hilburn sells around $125, the same shirt from Zegna on Neiman Marcus website sells for $325-$435, even though the fabric is sourced from the same Italian mill.

Lesson: Zegna and other lux brands need to differentiate themselves from this market to give (particularly Millennials) consumers a reason to spend the extra money since they are providing extremely similar services at fractions of the price. I say this is important particularly for the Millennial audience because, where they may be in school debt, they are the largest group purchasing apparel, spending 8% more than those ages 35-44. Millennials are willing to spend, sure, but are also aware of their debt and happy to find a deal, which is why sites like Gilt and Rue la la are so popular with this demographic.

Additionally, online sales are not limited to a computer. 41% of Millennials have made a purchase using their smartphone. We are seeing an influx of purchasing from tablets and smartphones across all demographics, and if companies aren't optimizing they are losing sales. And this is not just in the US- growing mobile device usage in emerging markets like China, India and South Africa create excellent opportunities for cutting edge luxury and beauty brands to increase sales and develop prefernce from Millennials, a fiercely loyal group.

Digitization of Wine

Wineries are beginning to incorporate more technology into their marketing communications. For example, there are now digital wine menus with videos about products in restaurants, sales teams are using iPads to conduct business with more dynamic content, and QR codes are cropping up on wine bottles to direct consumers to descriptions and reviews.

These advancements are incredibly important for the wine industry, particularly as they continue to foster a relationship with millennial men and women who make up 20% of all wine consumers. Rather than consulting a sommelier, millennials turn to the internet and interactive packaging to gain knowledge about their wines, and are extremely open to trying new wines. Since 65% of millennials report that they are only apart from technology for an hour or so a day, it is imperative that the wine industry moves into this space. 

Generally, wholesalers use speck sheets or tastings of their wine to present it to retailers, but digital presentation is on the horizon. Wine store owners feel that digital could be a useful way to access information and promote wine to consumers during the lag time often found between ordering and receiving the product. Owners also expressed that speaking with winemakers and winery owners interests them the most when wholesalers present their wines. And this doesn't just work for retailers. Stores like Total Wine & More are offering in-store iPads showing food pairings while consumers browse their selection. They developed this offering because they've seen an increase in customers wanting more information about their wines outside of the taste. They want to know where it comes from, see the vineyards and understand the process. 

Digital is also an advantage for vineyards. In Napa, CellarPass and VinoVisit.com are trying to create the OpenTable of wineries by creating smartphone apps that help visitors plan tours in wine country. Not only do the websites and apps help reach new audiences, but also aid in vineyards staffing and preparations. At the moment, CellarPass is processing 30,000 guests a month and the app has had 6,000 downloads since its launch in March. 

Example: Jordan Winery and Vineyard

Sales team used iPad presentations to push their brand to retail outlets and distributors. With a few taps on the screen, a sales representative can move seamlessly from the sales pitch to the order form.

The winery even shot custom videos for its major retailers, which then provided their online and in-store customers with a window into the Jordan harvest or techniques. These videos can also be used in restaurants as digital wine lists or in store. 

Jordan is a digital leader in the industry and their climbing sales attest to the necessity for wines to get in the mix with their technologically savvy consumers. 

Economy of Nails

When economic times are tough, one might imagine that money spent on superficial products like cosmetics and clothes might be the first expense to be cut. Scholars would disagree. And I theorize that nail polish is the new indicator.

Over the past nine decades many learned scholars have shed light on the correlation between economic conditions and seemingly non-necessary products for women. The Hemline Index asserts that as the economy weakens, miniskirts come out. When assessing a representation of women's fashions between 1916 and 1999 in US Vogue, as discussed in a paper published in Human Nature, as economic conditions worsen, skirts shrink. Evolutionary-minded scholars have argues that as economic conditions worsen, intrasexual rivalries yield shorter skirts, perhaps as a unconscious strategy for women to beat out men. What is fascinating as well is that there is a direct correlation between women's education and hem length. Nigel Barber's article Sex Roles he argues that as more women are educated, skirts become shorter, perhaps to augment sexual signaling in the mating market. Where this theory may be reductive and a tad be sexist, I say use what your mama gave you. I'll let the reader judge of how offensive they find these theories, but there is no question that the miniskirt and hot shorts are back on trend during our current economic troubles.

Another theory we are seeing played out today is the Lipstick Index. Developed by Leonard Lauder, former chief executive officer of Estee Lauder, declared in 2001 that as the economy worsens, lipstick sales amplify. Prestige lip category sales in department stores grew in the US over the first half of 2012 by 8%, lead by a 10% growth in lip color and 54% growth in multifunctional lip products. Lip is the third-largest makeup segment. The growth in lip sales is likely due to the fact that lip color is an inexpensive way for women to look put together and try something new. Cosmetics retail giant Sephora has already predicted blood-red lips as the key trend for fall. Transitioning from summer corals and pinks to fall red and burgundy, saturated lips are a popular trend that is economically feasible to achieve.

Hemlines and lipstick are noted, but I'd like to throw my support to a new index: the nail-bar-ometer. Along with many business people, I have been noticing a overt push toward nail color, designs and manicures/pedicures. Articles in fashion magazines and beauty blogs abound on nail art, hot colors and funky styles, and they don't seem to be stopping-- as seen by the abundance of nail products taking center stage at the Cosmoprof North America beauty trade show, often the hotbed for up-and-coming trends. I hypothesize that women participating in nail art, color and trends has a negative correlation to economic conditions, as supported by the following indicators.

Photo: Ian Langsdon/EPA as seen in
 Time's "The Olympic Manicure"

• The popularity of nail bars in this economic climate has skyrocketed, with retail analysts hailing them as some of the fastest growing businesses in both Europe and the US. Nail bars in the UK accounted for 16.5% if new outlets opened in the past three years, seeing a 14% increase in sales of nail varnishes. 
• Currently there are about 496 boards on Pinterest devoted solely to nails. 
• We even saw the craze during the Olympics with athletes from across the world sporting their countries flags and colors on perfectly manicured hands. 
• In US department stores, the nail segment lead prestige makeup sales in the first half of 2012 seeing a staggering 68% growth. This incredible surge is supported by color enamel up 70%, nail care up 38% and base/top coats up more than 100%. 

Not only are funky colors, metallics and details on trend, but nail care products have some of the lowest price points in prestige beauty. Just like lipstick, nails have become an outlet for women to feel beautiful and alluring without dropping serious cash.

South Korean Beauty Boom

Cultural values of beauty, constantly improving domestic manufacturers and recession repercussions have made South Korea one of the most important beauty trendsetters and booming markets not only in Asia, but the world.

In 2011 the professional skin care products market grew by 5.3%, driven by strong showings in China, growing by 9.3%, and South Korea, growing. Amore Pacific data concludes that the cosmetics market in South Korea is steadily climbing from 7.9 trillion in 2009, to 8.9 trillion in 2010 and 9.7 trillion in 2011. The boom in South Korea is largely attributed to a regulatory change that drove investment in beauty industries as well as greater consumer spending on domestic products. Furthermore, internet and home shopping channels grew by nearly 18% as domestic brands developed e-commerce channels contributing to larger online shopping channels.

All and all the digital sector plays a major role in South Korean beauty, with blogs and social media creating extremely savvy customers and e-commerce not only allowing for more purchases in-country but also from outside as well. If Chinese travelers are driving luxury sales in Europe, they are doing the same for beauty in South Korea. Cosmetic companies in the country have benefitted from the steady increase of Chinese and Japanese visitors and internet customers purchasing beauty products produced in South Korea.

The main reason for the boom, though, is the cultural significane of skincare and beauty in South Korea. Their shoppers are extremely beauty savvy, are knowledgeable about products and take their skincare seriously. They are unique in that 64% of the beauty and cosmetics market is comprised solely of skincare and makeup. South Korean women cherish flawless skin, leading to skincare occupying about 49% of their market. Between the facial skincare, makeup and night routine it is estimated that South Korean women use around 17 products daily.

Foreign beauty brands are recognizing the importance of South Korea, yet their sales are struggling. Beauty giant Estee Lauder is extending their portfolio to include a new DayWear creme in Asian retail stores, as well as adding a trio of Optimizer Intensive Boosting Lotions on-counter this month. L'Oreal also develops unique formulas and patents for its Korean market, citing the climate and lifestyle differences that must be taken into account for skincare. Regardless of tailoring their products, Estee Lauder reported an 11% decrease in sales from the first half of 2012 as compared to 2011, and Lancome posted a 17% fall in sales over the same period.

Decisions to purchase domestic products are supported by a variety of factors.
1) South Korean manufacturers have produced at a much higher quality over the last decade.
2) Aggressive marketing of "one brand shops"over the past few years, and their opening locations in major shopping districts, hypermarkets, malls and even residential areas.
3) Foreign cosmetic companies primarily sell at department stores, which customers have been avoiding during the recession.
4) Domestic products are significantly cheaper than foreign brands.

Foreign beauty brands should continue making products especially formulated for South Korean skin and environment, but they also need to look at their marketing and product placement. Using a KIO program to partner with bloggers to promote their products would be beneficial in gaining the trust integral to recruiting new customers would be key. Focused sampling plays, trial events and discounts could assuage the fear to spend during the recession.

Perhaps more importantly, recognizing the cultural differences in approach to skincare: South Korean women treat their skincare as a medical necessity, not superficial fun. Placing products in pharmacies and promoting a message of scientific benefit would be more in line with South Korean perceptions of beauty. Finally, creating one brand shops of their own, or partnering with domestic companies to get shelf space out of the department store could be a crucial win for foreign competitors.

The Next Big Beauty KIO Program: Birchbox

I've been hearing a lot of buzz about Birchbox lately, the web-based product sampling service. With the launch of Birchbox Man in April it seems popularity for the service has reached critical mass that any successful web venture needs. It is currently exploding in female demographics and poised to take over the male lifestyle category as well. For beauty, fragrance and haircare brands I believe Birchbox and Birchbox Man will become one of the most useful tools for key influencer outreach there is in the digital space. 

My conclusions are based on the following:

Sampling focus

Innovation and Competition

Pinterest integration 

Social media activity

Sampling Focus

Male and female interest in trying lifestyle products before they purchase them pairs perfectly with the mission of Birchbox, providing high end beauty and hair care samples to subscribers. Sampling has been an integral part in the success of brands like Aveda, Bumble and bumble and Sephora. Some big beauty families have not yet overtaken Birchbox sampling, so it is also an opportunity for young, small or up-and-coming brands to get in the game. For example, currently only two Estee Lauder family brands, Origins and Smashbox, are partnered with Birchbox. So the opportunity to be on the cutting edge of this service is still available for both big and small.

Innovation and Competiton

Brand space is filling up in the Birchbox lineup. Particularly for natural and organic beauty, there are several brands already using Birchbox, most notably Kiehl’s which is not only partnered with Birchbox but was recently featured in a promotion on the Birchbox Facebook page. Partnership with Birchbox could not only give beauty brands klout within the digital space, but stay in step with key competitors.

Pinterest Integration

Pinterest offers a huge area of opportunity to connect with KIOs, new customers and express brand loyalty. Birchbox has a solid 23,433 (and counting) base of followers. They have boards specific to the hair and beauty category where they feature partner’s products. Birchbox may offer an alternative avenue for brands who are not yet on the Pinterest bandwagon to participate in the Pinterest beauty movement.

Social Media Activity

Birchbox has an incredible engagement rate on its social media properties. To take an example, over the past month highly successful beauty brand (and one of my personal favorites), Aveda, has had a 1.3% engagement rate vs. 6.2% for Birchbox on Facebook. To put this in context, if 5% more Aveda fans were talking about Aveda on Facebook that would equate to roughly 25,063 more people chatting about their brand, leading to countless impressions and word-of-mouth worth. Birchbox fans social activity also translates to Instagram where they have 1.8x more followers than Aveda and an astounding 383,106 more Twitter followers than Aveda. 

It is always a good time for samples, but Birchbox has the opportunity to be a key ally to lifestyle brands when launching new products or invigorating old ones. All in all Birchbox is pioneering in the beauty space for both male and female demographics, and brands should take notice if they want to stay on the cutting edge. 

How the International Political Economy Impacts Beauty and Luxury Brands

As the economies of China, Brazil, India and Russia have increasingly become more prominent players in international finance, so have their citizens enjoyed their rising affluence. The Brazilian middle class comprised 54% of the population as of 2011, which makes it the largest of all five official classes and has allowed for a 4.4% increase in purchasing power between February and March 2012. This is nowhere as prominent in China, where the average disposable income per capital of China's middle class rose $2,240. Since 1980 Chinese yearly earnings have multiplied 10 fold. The Brazilian middle class comprised 54% of the population as of 2011, which makes it the largest of all five official classes. 


This rise in disposable income enables people to spend more on leisure activities than ever before. One such activity that is on the rise is travel and tourism. When passenger volumes increase, like those we are seeing in emerging markets, travel retail grows. As of 2011 the largest airport retail market was located in Europe, but some estimate that the Asia-Pacific retail market could grow as much as 75% by 2015.


The global travel market as a whole is fastest growing retail channel for beauty, fashion and accessories. It is projected to grow 60% to $45 bilion by 2015, and beauty sales, in particular, will likely grow more than 80% over the next five years. As travel and spending from these regions increase, so do companies investment in airport stores. For example, Estee Lauder already has nearly 1,000 airport stores, featuring such respected brands as Aveda, Clinique and Bobbi Brown. Estee Lauder Companies are looking to add additional stores in domestic airports in China and Brazil. To stay ahead of the curve, they are currently scoping out locations that could one day become vacation hot spots in China. 


Sales are not only rising in airport retail locations, but also in destinations as well. For example, tourism in Italy rose by 22% and and their spending increased by 24%. It seems that the Euro's devaluation is the tourist's gain. The Chinese Yuan, for example, rose 17% against the Euro last year, often making it less expensive to purchase luxury goods abroad in Europe rather than in their home country. Overall luxury sales could also grow by 15% over the next five years, mostly in travel retail outlets, and luxury retailers are taking notice. High end fabric and suiting brand Ermenegildo Zegna is spending aggressively on marketing to tourists by working with tour operators to inform them of Zegna outlet locations, hiring multilingual staff and adjusting the sizes and products featured in store. Zegna believes they could see a 10% growth in store as a result. Cheif Executive Officer Patrizio Bertelli of Prada and Chief Financial Officer of PPR SA (PP) and French owner of Louis Vuitton both contributed first quarter growth to the contribution of tourist purchases. 


Luxury and beauty brands must understand the shifts in the world market to stay relevant to their clientele. There is no doubt that the international beauty and luxury market should value and cater to tourists from emerging countries to ensure their brand's stability and growth as former powerhouses continue to rebuild their economies. 

State of US Online Retail Economy 2012

Just wanted to pass along some interesting facts from a recent ComScore webinar on the state of the US online retail economy in Q1 2012. They are super handy and add great insight into the trends forming this year. 

ONLINE

• Top 20% of households account for 74% of retail spending
• 1 in every $10 spent by consumers in the US is spent online
•  E-commerce is up 42% vs. 10% increase in traditional retail since Q1 2008
• Online access to coupon sites has become important in spurring their growth (group on being a prime example)
• Cookies are deleted by 30% of the internet population 3-7 times a month which can be problematic for digital plan delivery and accurate counting of impressions 

MOBILE/TABLETS

• Mobile/Tablet is approaching 10% of e-commerce sales and continues to climb
• Tablet ownership has reached 40 mil in a year, where it took 9 years for smartphones to reach 40 million
• 1 in 5 tablet owners have purchased clothing and accessories from a retailer via their tablet (followed by books and deal sites at 11% each)
• 41% of owners researched prices and product features from their tablets

SHOWROOMING

• Showrooming--> visiting a brick and mortar store to see the product but instead purchasing the product ONLINE. 
• 1 in 3 consumers have engaged in showrooming (50% of 25-34; 43% millennials; 48% of tablet owners; 43% smartphone owners)
• 6 in 10 say they intended to purchase in store but changed their mind; 32% (1 in 10) always intended to buy online
• Why? 72% say because the price is better online, 45% wanted to see them in person, 18% would rather have them shipped to their home (twice as likely to do this in urban areas)

PINTEREST

• Pinterest --> still adding 1 to 2 million people a month; engagement is really high
• RETAILERS NEEDS TO BE ON PINTEREST,  it should be priority #1 for social media strategy and is probably more important than some other social media channels 

Tablets in the Beauty Sector

Just wanted to bring attention to a hot technology trend in beauty: tablets. Tablets and screens are playing a bigger role in the beauty industry, which allows digital agencies to bring some really innovative ideas to our beauty clients.

IN-STORE: Clinique has handed out iPads for client consultations. Sephora uses iPads for make-up consultations, beauty services availability, and product reviews & info. Sephora is also testing the iTouch as a way to check customers out. Aveda has even partnered with ArmorActive to develop custom iPad stand (called Gravity Charge) with enclosed battery backup that are now being sold to the public. 

PRODUCTS: Makeup brands are actually making their products more high tech. Urban Decay's Book of Shadows Volume IV eye shadow palette doubles as a portable speaker and offers make-up tutorials with a scan of QR codes. 

EXPERIENTIAL: Glamour magazine set up in New York City during Fashion Week a temporary, shoppable wall stocked with beauty products. Leveraging SpyderLynk’s Snap-to-Buy technology, beauty mavens scanned 2-D bar codes with an app on their smartphone to instantly buy the product for home delivery. During that same week Glamour also outfitted 50 NYC cabs with technology allowing passengers to purchase luxury beauty products by swiping their smart phones over special tags inside the cab, dubbed "mobile taxi shops". 

With more big brands embracing technology both in-store and online as valuable to their sales it is an exciting time for digital advertising in the the beauty industry!

This is a mind dump.

I decided that giving blogging a go is a good idea since I am a strategic planner in digital marketing and also just because I have a lot of thoughts. In my teenage emo phase I may or may not have blogged as an adolescent diary and I've blogged on some of my world travels mainly to prove to my Mother I am still alive and well, but now I feel my thoughts and insights need a home. So I intend to use this space as the hub for everything ranging from work to play to random sidebar.

I hope someone enjoys it besides my Father who is now learning how to use the interwebs. Please feel free to contact me with any questions, comments, suggestions or asides.