Beauty finds a beast in gifts with purchase game

Press, 3 June 1981, Page 14

Beauty finds a beast in gifts with purchase game

Secret ingredients have long been the lifeblood of the beauty business. But now the £6oom UK cosmetics trade is sharply divided over its latest miracle additive. GWP. GWP does not get rid of wrinkles, though it can stimulate sales of creams and potions: the initials stand for Gift With Purchase. The fear in some sections of the industry is that the gifts are getting out of hand. Not only is it now virtually impossible to launch or relaunch a product. range without a GWP, but the perceived value of the GWP can make or break the product. "It’s a vicious circle,” says Gloria Berry, perfumery department manager at Harrods, "and no one can get out of it.” According to Ms Berry, the GWP started as a small toiletries bag containing free samples offered with purchases. As competition increased, so did the value of the bag. It became an evening bag. a handbag, a travel bag, even a briefcase. “Then the companies saw that th£ public was starting to get ’ bored by bags, and they looked around for something different.” \ . Silk scarves, sunglasses and even umbrellas followed. But there was nothing as extravagant as a recent promotion in Harrods: a free towelling bathrobe with every purchase of two or more items from Helena Rubinstein’s Skin Life range. On the second floor of the store. Harrods’ own-label towelling bathrobes were selling for £49.95. On the first floor there was an imported version for £25. And on the ground floor Helena Rubinstein was giv-

ing them away with a minimum purchase 0f£13.50. It was an offer that even the well-heeled Harrods customers found hard to refuse. In the 10-day run-up to Easter, Rubinstein gave away more than 3000 bathrobes and attracted sales of over £5OOO a. day to its single counter. “It’s' by far the most expensive GWP we’ve had in the store.” says Ms Berry, “and certainly the most successful.” “In terms of turnover it’s the most successful product promotion ever staged in a British department store,” said a delighted Rubinstein marketing director, Elizabeth Lovell. . ' Most companies lose money on GWP promotions, or at'best break even, in the hope of long-term gains by winning over new customers. Rubinstein, however, made a profit. Part of the explanation is that Rubinstein did not ob: tain its bathrobes at Harrods. It got them in Hong Kong for what it discreetly calls an “attractive price.” Also, temptation got the better of many customers and they, ended up.spending niore than the £l3.somini-

mum — the average was £2O-25. Nevertheless it is difficult to escape the conclusion that profit margins on bathrobes or cosmetics (or, bothlare extremely comfortable. And that is what worries David Nash, marketing director of Lancome. "There is a danger of creating a credibility gap in the customer’s eyes between the normal price' of the product, and the price at which you can apparently give it away during a promotion. I believe the situation has a very real .chance of backfiring.” . ’ Mr Nash says Rubinstein’s flamboyant move will not entice him into upping the value or the frequency of his own GWPs. "We don’t really approve of the unrelated GWP,” he says. “We prefer to give the customer a free sample of a complementary product when she makes her initial purchase. ■ "We are currently doing a promotion at Fenwick's where the customer gets a small toiletries bag containing tjiree free sample products of her choice with every two products purchased.

I feel that this whole GWP situation is becoming very .worrying for the industry.” But no manufacturer wants to be the first to jump off the bandwagon. Nor do the stores want that to happen; GWP promotions attract customers who spend money on lots of other things. One. perfumery buyer with the Debenhan’s. group ex- ’. plained:

“There are a lot of women, especially in the West End, ‘ who really shop, around the big stores' checking out the free gifts' before they buy their beauty products. .If w'e have a good cosmetics'promotion it. does increase store traffic. ' If I wasn't doing it some other store would be, so I’m not going to stop the roundabout.”