1. By: Kristen Prazenica

4. What intrigues a woman to shop through a television network or infomercial? Convenience Ability to shop at any time of day No sales pressure Demonstrations of product application

5. Why do we shop network channels? PRICE “Sometimes they have great sales you can’t beat, to see the latest styles.” – Age 26 “The price and quality of the products.” – Age 37 RETURN POLICY “Great return policy and great prices.” – Age 49 CONVENIENCE “Convenience and price.” – Age 53 INFORMATION “Demonstration, testimonials.” – Age 43 “I like the explanation of the products and the demonstrations.” – Age 33 BRANDS/PRODUCTS “Some of the products I buy aren’t available any other place that I’m aware of.” – Age 59

6. The Generic Home Shopping Persona  Focused on price and value  Impulsive shopper  Largest segment purchasing is women aged 45-54  50% want savings on travel and gas costs  39% shop channel for discounted prices  Enjoy shopping at any time of day

7. The Infomercial Shopper Profile  Prefer prestige brands  38% see the product and purchase it online  29% view product and purchase it at a store  Impulsive decision maker  40% shop between 10 p.m. and 2 a.m.  More likely to purchase a new product from a familiar brand

8. Infomercial Shopper Continued  4 out of 10 woman awareness  Most viewers fall into 18-24 segment  45-54 aged segment spent the most on beauty ($138)  18-24 year old segment $110 average  Growing market, about 4 in 10 newcomers doubling HSN newcomers  80% tune in impulsively

9. Infomercial Shopper Continued  20% of Infomercial shoppers used channel for 5+ years  40% of Infomercial shoppers purchase through internet  3 in 10 Infomercial shoppers shop via internet

10. The TV Network Shopper Profile  Prefer prestige  38% see product and purchase it online  18% view items and make store purchase  Impulsively tune in  31% shop between 8 p.m. and 10 p.m.  18% shop between 6 p.m. and 8 p.m.

11. TV Network Continued  Most likely purchase new product from familiar brand  70% buy new from brands they already own products from  Prime segment of viewers: 45-64 age range  1 in 3 TV Network shoppers shop channel 1-4 hours per week

12. TV Network Continued  50% of TV Network shoppers used channel for 5+ years  Less likely to shop on impulse vs. infomercial shoppers (67% vs. 83%)  More likely to plan tuning in times vs. infomercial shoppers (33% vs. 17%)  More likely to watch products on television and purchase it online after vs. through phone

13. TV Network Continued  59% see product on TV, then purchase through internet  4 in 10 shoppers also shop with the internet

14. TV Network and Infomercial, a Worthy Channel?  Least likely market to gain new consumers  Stronger market for skincare & make-up  More likely to purchase skincare (60%) vs. body skincare (30%)  Internet and fine department store shoppers likely to cross-shop to this channel  The highest reported average spending for beauty is cited as fine department stores ($117), TV Shopping Networks ($109), and Infomercials ($100)

15. QVC Shopping Market Profile  Highest purchases are make-up and skincare  Better market for make-up sales than HSN, 70% vs. 50% reported buyers  80% of fans will shop/purchase if tuned in  92% awareness level amongst consumers  QVC turns 90% of viewers into regular watchers

16. Home Shopping Network Market Profile  Highest purchases are make-up and skincare  Better purchase results in facial (63% vs. 48%) and body skincare than QVC (47% vs. 36%)  Fewer shoppers vs. QVC  Strong make-up brands have a chance at success  Market awareness level of 84%

17. Ability of Consumers to find Beauty Products Conveniently Through TV Networks  82% mentioned not shopping this channel  12% had no problem  6% unable to find products  A third of those shopping this channel had a problem finding their desired purchases.

18. The Internet? Could be an asset to TV Networks!  Provides flexibility and interactivity  Ability to watch missed TV segments  TV Network shoppers more likely to watch products on television and purchase it online after vs. through phone  The biggest element is it brings an interactive experience to the consumer

19. “The Natural Perception ” “Pure, clean.” “Free of chemicals.” “Does not contain additives.” No artificial ingredients.” “Made from plant products.” “It is safe to use.” “Come only from natural sources such as plants. No chemicals.” “All natural ingredients.”

20. What intrigues women to buy all natural products?  Need for samples and education  Low initial prices  Proof it works without the cost  Just as effective as the current product

21. Common Phrases That Associate Consumer Perceptions to think “All Natural” TerminologyRank% Safe to Use on Your Skin173 Made without dyes or additives271 Product is healthier for you366 Ingredients are mineral based366 Manufactured without chemicals463 Not tested on animals529 Safe for the Environment628

22. General Interest in the Beauty Market

23. The Natural Market Potential  Distinct perception vs. organic, eco-friendly, and socially conscious brands is “safe for use on skin.”  Organic and eco-friendly advocates are easiest to convert to natural market  Greatest expansion in white women and segment 55+  Mass merchants and beauty specialty stores biggest sellers

24. Natural Product Age Segment Analysis 18-34 year olds  Highest interest in natural products: 81%  Most usage of natural lines: 68%  Highest usage of all natural make-up: 45%  Body skin: 43%, 2 nd highest amongst segments  27% (3 rd highest) sun care interest  63% admitted to having a strong interest in new beauty trends (highest of all segments)  42% mention “certified green” products of prime importance  56% willing to pay more for facial care products  50% willing to pay more for body care

25. Natural Product Age Segment Analysis 35-54 year olds  80% interest in natural products  Tied for highest usage of all natural make-up: 45%  Tied for highest usage of sun care: 29%

26. Natural Product Age Segment Analysis 55-64 Year Olds  78% very interested  58% actual usage  Highest facial usage user: 45% consumers  Lowest reported interest in sun care products  39% interest in “certified green” products 65+ Year Olds  74% natural product interest  59% actual usage  Highest sun care interest: 29%  Interest in make-up, facial, and body care products all about equal (39%, 41%, 40%)  Highest interest in naturally grown and organic products, (44% and 27%)  Willing to pay more for make-up, body, and skincare than other segments: (54%, 50%, and 51%)

27. Market Segmentation by Ethnicity Whites (not Hispanics)  Highest interest in “certified green” products: 41%  Make-up interest: 30%  Facial, body care, and sun care product interest: (35%, 33%, and 28%)  62% more likely to purchase product with natural wording Blacks (not Hispanics)  Highest interest in “naturally grown” and “organic” products”: 47% and 28%  Strongest interest in facial skincare: 50% consumers  Equivalent interest in make-up and skin care: (47% and 44%)  Sun care interest: 28%  69% more likely to buy with natural wording  Most likely to pay more for beauty products across product types except sun care than other segments

28. Market Segmentation by Ethnicity Hispanic Market  Highest interest in “naturally grown” products: 43%  Strong desire to purchase facial skin care: 46%  Make-up, body care, and sun care product interest follows: (44%, 42%, and 36%)

29. Market Segmentation by Household Income Under $25,000  Highest general interest in beauty products: 40%  Greatest interest in sun versus other markets: 29%  Equivalent interest in facial and body care: 39%  69% more likely to purchase product with “natural wording” $25-000 to $44,999  34% general beauty interest  Highest interest in facial care: 38%  Rate body care, make-up, and sun care importance: (37%, 31%, and 28%)

30. Market Segmentation by Household Income $45,000- $74,999  36% general interest  Highest interest: facial care 40%  Out of all segments most interest in sun care: 31%  Body care and make-up interest: (38% and 36%)  56% willing to pay more for make-up $75,000+  34% general interest  Highest interest: facial skin care 36%  Close interests in make- up, body care, and sun products: (34%, 33%, and 29%)  Most willing to pay more face, body, and sun care out of all segments: (60%, 52%, and 57%)

31. Willing to Pay More For Natural Products (among Beauty Users 18+)

32. Fun Facts of the Beauty Market  72% of facial skincare purchases are planned  91% of foundation purchases are pre-planned (the top category in make-up sales)  64% of Beauty Product Users would more likely purchase product if NATURAL appeared on the label.  “Healthier” and “Free from chemicals and pesticides” are the two main reasons users choose natural  Biggest decline in spending: segment (18-24)

33. Where is the beauty market headed?  Make-up highest decline in purchasing  When asked, what type of product (skincare vs. make up vs. fragrance they would put $100 to) skincare won with 45% of votes

34. The All Natural Skin Purchaser Profile  2009 total Skincare segments:  74% feel mass brands are just as good as prestige  Sets/Kits had 10% dollar market share  Experienced +8% dollar growth  +7% unit growth  Anti-aging, big seller! Claimed 40/50 top kit spots  >50% buy on impulse  <50% plan brand to purchase from

35. What are women searching for when purchasing skin products?

36. Planned vs. Unplanned Shopping Trends Anti-aging serums, treatments, and moisturizers

37. The Anti-aging Skin Consumer Profile Type of Skin Product % Change in Market $ Performance for Prestige Anti-aging-4% Face Cleanser-4% Face Moisturizer-4% Acne-11%  >50% of women are  86% strive for wrinkle reduction  74% seek firming/lifting  59% find products ineffective “The consumer values BEST PRICE for the product GETTING A DEAL”

38. The Anti-aging Skin Consumer Profile

39. How do we get a female shopper to buy and use?  54% of women rely on friends, family, and coworkers  47% admit to being influenced by experts  40% by magazine articles  29% by internet and blogs  12% by home shopping networks and infomercials

40. Expansion in the “Sensitive skin” Market  49% of women have sensitive skin  62% of 18-24 year olds  61% of all African American women  Consumers in this market favor hypoallergenic, fragrance-free, and SPF strong products  Kits are the most appealing  Rely on natural face care products the most  Most likely to purchase from companies that give back to charities

41. Ways to fuel innovation in Skincare  The Key, Mass Acceleration Innovation  Unique delivery systems  Specialization  Anti-aging winners  Tools “CONSUMERS VALUE BEST PRICE FOR THE PRODUCT GETTING A DEAL.”

42. Skin Care Summary  Consumers are beginning to cut back on beauty purchasing  Shifting to preferences of interaction/personal engagement before making purchase  Skincare has gained in relevance to consumers  Make-up has declined in the eyes of the consumer  Kits are a hot commodity  Anti-aging is a strong market that is not declining  Most decisions to purchase are made on impulse  Women are remaining faithful to their brands