Superbrands case studies: No7
Originally published in 'Consumer Superbrands Volume VI', July 2004. The book reviews the UK's strongest consumer brands as judged by an independent judging panel.
Case study provided by Superbrands.
The UK cosmetics market is worth more than £800m, while the skincare market is worth £710m (Source: TNS November 2003).
Both markets are driven by technology and are becoming more integrated as skincare benefits are being incorporated into cosmetics. Brands are focusing more on innovation to enable them to incorporate bigger claims into their products that will attract consumers -- eg longer-looking lashes, longer-lasting lipsticks and foundations that adapt to your skin tone.
Consumers are increasingly brand promiscuous as they seek the "best ever" mascara or foundation and most women's make up bags are likely to contain several different brands of cosmetics. Fashions change over the years or even within a year, which has a direct affect on the cosmetics industry, with colours constantly changing and different looks becoming popular.
Key loyalty sectors within this market are foundations and skincare, as customers are less likely to switch if they are happy with their current product for fear of an adverse skin reaction or not being able to match their skin tone as well with different products.
Despite the fact that No7 operates in such a highly competitive market, it still achieves annual sales of over £100m, making it the largest retail cosmetics brand in the UK. Sold exclusively in 1,384 Boots stores it is a key footfall driver, with people crossing the street specifically to purchase No7 products. No7 is the only mass-market brand to have over 900 dedicated consultants in the majority of Boots stores.
The brand has a 10.7% share of the cosmetics market, and is growing at a faster rate than the rest of the market, driven by new product launches and in-store activity. No7 has a 3% share of the skincare market and is also growing ahead of the market, driven by the re-launches of Daily V and Positive Action. Enviably, the brand has the highest level of spontaneous awareness of all cosmetics brands.
No7 is also sold through exclusive distribution in selected retailers in fourteen other countries, from Iceland to Australia, and Thailand to South Africa.
No7 is regularly featured in women's consumer media and is a beauty editor's favourite for good quality affordable cosmetics and skincare. No7 Quick Dry Tinted Lotion has been awarded "Best Inexpensive Self-Tan" by In Style magazine, for the second consecutive year, as voted by top beauty-industry experts. No7 experts, Lisa Eldridge, a makeup artist and creative consultant, and Steve Barton, skincare adviser, are often called upon to share their advice and tips on beauty.
But perhaps the highest accolade for the brand is that it has many celebrity fans including Madonna, Rachel Stevens, Sadie Frost, and Tess Daley.
In 1935, Amelia Earhart became the first woman to fly solo across the Pacific, the government introduced the driving test, Charles Darrow patented Monopoly and Boots launched No7.
Packaged in a bold blue and yellow design, the No7 range arrived in 50 Boots stores and was advertised as "the modern way to loveliness".
To coincide with the launch, beauty parlours were opened in some of the larger stores, the first of which was opened on May Day 1935 at London's Regent Street store. The range was a runaway success and was soon extended into Boots stores throughout the country to meet the growing public demand.
A few years later, the outbreak of war halted the production of cosmetics in Britain almost completely, with only limited supplies continuing to be available.
The full range of No7 was re-introduced in 1949 and the size of the market grew as wartime work in factories had given many women enough money to indulge in luxuries such as cosmetics. Increasing mass production also made prices lower.
In 1952, No7 was relaunched in new packaging of gold and yellow. The figure "7", with its prominent diagonal disappeared, and there was a greater emphasis on the wording "Number Seven" -- either in a decorative, curvy script, or in block capitals.
By the mid 1960s, No7 accounted for 25% of every £1 spent on Boots own-brand toiletries.
It was exported to 26 countries, including Australia, Holland, Iceland and Austria. A shipment of No7 lipsticks to Russia caused a sensation among Russian women, who had not previously seen such a variety of shades.
With a revolutionary new look of terracotta, white and silver, the No7 range was officially relaunched for the second time on April 16th 1971. A five-page colour supplement in The Sunday Times colour magazine, and TV advertising broke the news that "Tomorrow morning at nine o'clock, something beautiful is happening in every Boots shop in the country!" -- it was the first time the brand had been seen on television.
Until then, No7 had been heavily dominated by skincare items, with little make up included in the brand's range. Now, a complete new collection of more than 200 items replaced old products.
In February 1995 the new No7 was launched, with over 30 new products, 150 new shades, and new packaging. Today, the brand's distinctive black and gold packaging adorns Boots stores and women's makeup bags all over the world.
No7 has a complete range of nearly 350 products across colour cosmetics, skincare, self-tan, instant tan and suncare. This includes 176 different shades across lipsticks, nail varnishes and eye shadows to ensure No7 has a range of colours to suit everyone. The brand also launches three limited editions every year -- Autumn, Spring and Christmas -- with colours and textures to encapsulate seasonal trends, based on the catwalk, in beauty products that are the "must-have" colours for the season.
The skincare range is split into two sub-segments: Daily V and Positive Action. Daily V is a range of products that cover the everyday skincare regimes of women. The range is divided into the three major skin types -- Oily/Combination, Normal and Dry/Extra Dry. Each has their own natural ingredients in specific products designed to maintain healthy skin. Positive Action includes moisturising products that are more advanced and actively target the visible signs of ageing.
No7 also competes in the suncare market with No7 Summer Skin. The range is split into three areas: Pre-Sun, Sun-Protection and After Sun. No7 is the only major brand to have a dedicated range of products to help you prepare your skin for your holiday.
There is also a self-tan wear-off range for tanning without the sun and the wash-off Instant Tan, marketed as "the quickest way to spread a little sunshine".
All No7 products are developed to be hypo-allergenic, which necessitates stringent testing methods by its specialised formulation teams.
As well as these core ranges, No7 makes accessories, gifts and electrical beauty products such as heated eyelash curlers.
Intelligent Colour Foundation was launched in October 2002 and is now the number one foundation in the UK with over £5m sales. The success story for this product started with market research to understand consumer needs. The key insight being that women find buying a foundation stressful as it's difficult to choose exactly the right shade to match their individual skin tone perfectly. The No7 development team then used new technology to produce a foundation that only needed three shades to cover a wide spectrum of skin tones. Intelligent Colour Foundation cleverly adjusts to match the colour of a woman's skin thus taking away all the guesswork, experiments and expensive mistakes that they have previously made with other foundations. The strapline that appeared in the TV and press advertising "Simple Foundation, whatever your make up" summed it up perfectly.
Each year No7 supports Breast Cancer Care with limited edition products and in-store activity. During Breast Cancer Care Month in 2003, No7 teamed up with fashion-jewellery retailer Swarovski and created a "pink ribbon" crystal brooch, with all profits going to Breast Cancer Care. In addition, consultants wore special t-shirts and carried out mini-makeovers to raise further funds for the charity.
A specific section of the Boots website has recently been developed to showcase the No7 brand.
The No7 brand cultivates broad appeal -- almost every woman in the UK owns a No7 product.
It is purchased by a wide range of women from teenagers right through to pensioners. With most women being introduced to No7 by their mothers, it becomes one of the first cosmetic brands that many girls experiment with. The brand is in the enviable position of being able to claim very high loyalty, with many customers buying No7 products for over 30 years.
Yet, despite its high penetration and loyalty, No7 is committed to promoting and marketing its brand to ensure it stays at the top of women's shopping lists. No7's functional benefits -- the latest premium beauty and skincare technologies and trends made accessible -- have been supported by strong above and below-the-line advertising for many decades.
As far back as 1979, the brand was emphasising the link between its products and fashion, with slogans such as "No7 -- off the peg at Boots". Ten years later, the brand was promoting its skincare range with its "Face the World" and "Reveal Yourself" executions. In 1999 it used a woman deciding what to wear and choosing red lipstick with the endline, "A Useful Little Number".
In 2003 with a media budget of £5m, No7 ran a multimedia campaign concentrating on "7 things..." or "7 ways...". Although it is the largest retail brand in the UK, No7 was often seen as safe and a bit tired. But with a range of new products in the pipeline, 2003 was set to be an exciting year, so advertising that captured the spirit of the brand was required. The company started by thinking about the No7 woman -- a woman with a sense of her own style, who uses fashion and makeup to help her express her individuality; a woman who knows who she is and is comfortable in her own skin. So at the heart of the campaign was this philosophy; "whoever you are, and whatever your mood or situation, No7 fits perfectly into your life".
The ads show different situations, promoting various No7 products as the solution. For example "7 things you'll want after a late night" -- for Radiant Glow Foundation; "7 ways to make an impact" -- Lash Extensions Mascara and "7 things you'll need for a dirty weekend" -- Intelligent Moisture Lipstick. The campaign ran across TV, press, radio and six sheet posters and reflected the brand's sense of humour in its cheeky headlines and stories. It provided a consistent look and message across everything that the consumer saw -- either in store or while reading a magazine or walking down the street.
In addition to this campaign, No7 was also involved backstage at London Fashion Week in February 2003 when it sponsored the makeup at catwalk shows by designers: Ghost, Elspeth Gibson, Gharani Strok, Jasper Conran, Pringle, and John Rocha.
No7's aim is to provide inspiration for women to look and feel good and to celebrate being a woman. Consumer research has shown that the three key attributes most associated with No7 Cosmetics are trust, honesty and being a real friend.
The brand's positioning is premium but accessible; premium because its products and packaging are of a high quality and all new product development is benchmarked against the best in the market. Yet it is accessible because of its prices, friendly consultants and availability in every Boots store in the high street.
(c) 2004 Superbrands Ltd
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