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April 21, 2015

Sampling in Beauty: How Sampling Became Profitable

Nicole_TyrimouAnalyst Insight by Nicole Tyrimou - Beauty and Personal Care Analyst

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While once simply a way to entice consumers, beauty product samples are now a beauty offering of their own, thanks to innovative start-ups, travel restrictions on beauty packaging  sizes and consumer desire to continually try new products. The biggest driver to this change has been innovative start-ups in the form of subscription sites. Websites like US-based Birchbox, launched in 2010, and Glossybox, its key competitor in Europe, have turned product sampling into a profitable business. The rise of online shopping and the rise of beauty advent calendars at Christmas have also capitalised on samples, turning them from freebies to commercially-viable products.

Sampling products - a key purchase influencer for consumers

Despite efforts by marketers to convince consumers to buy without trying, product sampling remains an important part of the path to purchase equation. In Euromonitor International’s Annual Survey on Personal Appearances, free samples was the fourth biggest influencer for purchasing beauty products across all four biggest beauty categories. Past experience, friends and family’s recommendations and price preceded sampling.

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Indonesia: Prohibition in Paradise?

Spiros_MalandrakisAnalyst Insight by Spiros Malandrakis - Senior Alcoholic Drinks Analyst

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The rising spectre of neo-prohibitionary rhetoric and legislation is claiming a fresh casualty. Following the introduction of restrictive policies in a widening number of markets ranging from Turkey to Russia and from advertising restrictions to distribution barriers, the paradisiacal archipelago is joining the ranks of emerging markets falling from -the alcoholic drinks industry’s- grace.

Whereas the latest legislation coming to effect in April 2015 will ban the sales of low abv alcoholic beverages from the throngs of convenience shops and small stores across the country, it is the proposals for a blanket ban on all alcohol sales currently put forward by Islamic parties that sound the most ominous.

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April 20, 2015

Five Signs it is Time to Invest in Proprietary Intelligence

Scott-RencherInsight by Scott Rencher - North American Director of Sales

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It is hard to imagine that in the Information Age, there are still some things that are not quantified. With all of the point of sale and mobile device tracking, as well as the wearables revolution soon to come online, we have clouds upon clouds of data yet to be collated and condensed into intelligence for marketing and planning professionals to swim in. But there is and will continue to be transactions that are not specifically counted at a market level. Among those are B2B sales for many products and services.

Think about your jeans and if you have few minutes, watch how cotton is converted to yarn (exciting stuff, I know) but it is a complex process. As you go through the video, note all the machines & engineering, capital and know-how needed just to do that one element of the value chain. Then draw back to the entire manufacturing process. Before you owned your jeans, cotton seeds were planted, nurtured and picked; they were converted into threads which were then died and woven into fabric. Those threads were assembled into pants and during this whole journey those processed cotton wisps likely made several trips by boat and truck as well as many overnight stays in warehouses before they arrived at a local store where your jeans received a price tag before being placed on the showroom floor. This all happened long before your credit card was swiped, before it was put into an earth friendly bag and long before you put your pants on one leg at a time. I know I skipped over some important pit stops in the value chain but the point is: there are so many companies, communities and individuals involved in your single consumer transaction with incremental price increases from seed to seat. Among all of these B2B transactions, no organization has clear visibility across all of it, let alone how big or important any one of those single industries really are. Readily available information on the domestic value chain is rare. Having that information internationally is even more scarce. Which leads me to the universal 'So what?' question. Why would someone go to the trouble of researching these under-served markets? Clearly there isn't enough demand nor is it profitable to research on an ongoing basis.

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The Dash for Iran

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Consumer goods companies are clearly excited about the potential that Iran offers as a consumer market, following the framework agreement over Iran’s nuclear programme. Iran has the largest population in the Middle East, at 77.2 million in 2014; it also has the second largest economy (behind Saudi Arabia) with GDP of US$441 billion in the same year - a similar size to Austria. Yet size isn’t everything – sanctions have stifled the economy, which returned to growth last year following two years of decline.  The country’s economic woes are compounded by high (if falling) inflation, a fragile currency, a troubled banking sector and a weak fiscal position. This is further magnified by a weak business environment, with the government crowding out the private sector.

Despite these challenges, the framework agreement which could herald an end to sanctions, has been greeted with much enthusiasm by multinationals. Is this enthusiasm justified? Although the situation remains fluid, and the US Congress could still reject the deal, the answer is yes and no.

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April 19, 2015

Turning Clicks Into Sales: Fashion’s Future in Monetising Hashtags

Bernadette-KissaneAnalyst Insight by Bernadette Kissane - Apparel and Footwear Research Associate

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Social media plays an imperative role in all consumer goods industries, but can be considered even more relevant in the fashion world. As the global social media base passes the 2.0 billion user milestone and internet retailing continues to grow, at a constant 2014 value CAGR of 14% globally over 2014-2019, brands are eager to expand beyond trending hashtags and create a lucrative sales channel.

Developing countries have been making strides in s-commerce, while advanced economies are struggling to capitalise on the opportunities social media presents. According to the latest Euromonitor International survey data, in China and India, 43% of consumers make purchases through social media, while only 11% and 15% of consumers use s-commerce in the US and UK, respectively. Growth in emerging markets is being driven by the dominating e-commerce behemoths Flipkart, Alibaba and TaoBao. These local players have monopolised the s-commerce cycle,  controlling the online marketplace, social media platforms and marketing channels.

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Collaboration Between Fashion and Spirits at a Tipping Point?

Spiros_MalandrakisAnalyst Insight by Spiros Malandrakis - Senior Alcoholic Drinks Analyst

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Oscar Wilde had once famously, and most provocatively, quipped: “Fashion is a form of ugliness so intolerable that we have to alter it every six months.” And therein lies its beauty too, one might add. Intriguingly, this is also increasingly the case with alcoholic drinks.

While trend cycles tend to last longer than 6 months it is becoming an indisputable fact that drinking patterns evolve much faster and more frequently than they used to. These changes are not due to some inexplicable, rapid biological mutation of regional or global palates.

The on-going shift from vodka to whiskeys - or the proliferation of bourbon within that whiskey stable in terms of current market dynamics- should hence not be analysed only through the simplistic perspective of flavour profiles or even macroeconomic developments.

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April 17, 2015

The Gadget Show Live Thrills Enthusiasts but Where Were the Toy Companies?

Utku_TanselAnalyst Insight by Utku Tansel - Head of Toys and Games Research

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Euromonitor International attended The Gadget Show Live, held at the NEC, Birmingham, UK’s second largest city, over 7-12 April 2015. Based around the very popular Channel 5 programme in the UK, the event included features such as Game Zone and Super Theatre, where the presenters of the TV show took to the stage to test out some of the latest tech on the market.

The exhibition’s wide demographic range attracted children as well as adults. The specific sections targeting children included the Build Your Own Gadgets zone as well as Kids Tech Toy Trail (sponsored by Vivid), where children were able to play with a number of toys, namely Crayola’s Colour Alive, Real FX Slotless Racing and i-Que Intelligent Robot. While Active Zone focused on wearable technology, Robo Challenge included 2015 Fighting Robots Featherweight World Championships. Drones accounted for a considerable portion of the exhibition, attracting much interest from the attendees. GAME, a video games retailer, was also present, allowing participants to test leading games and consoles in its busy stand.

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Trends in Healthcare Impacting Competition in Medical Devices

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The global medical and surgical equipment industry is worth US$266 billion with the US and Western Europe accounting for 66% of total turnover. This podcast discusses western health care systems aiming to curb healthcare costs and consolidation of medical device procurement as they affect device manufacturers.  Listen for complete insights.

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April 16, 2015

TripAdvisor Challenges OTAs through Instant Booking Functionality

Angelo RossiniAnalyst Insight by Angelo Rossini - Contributing Analyst

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TripAdvisor is currently one of the “Big Three” global players in online travel in terms of market capitalisation and web traffic, together with Priceline and Expedia. However, the company, in spite of its strong growth over the past five years in terms of both revenues and popularity with consumers, is less able to monetise its traffic than the other two big online travel players as it is currently not processing transactions on its sites, but provides links to external sites, and especially to its two largest customers, which are Expedia and Priceline themselves, earning advertising fees for this service.

The goal to finding a way to better monetise its traffic was behind the launch in 2014 of the Instant Booking functionality, based on a hybrid model that is between the OTA and media models. If this new functionality meets the favour of hotel companies and consumers, TripAdvisor will be able to increase its revenues and, at the same time, will become a direct competitor for OTAs.

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Oil, Derailments and Regulation – Growth Formula For Canada’s Railway Industry

Arunas-UmbrasasAnalyst Insight by Arunas Umbrasas - Industry Analyst

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As Canadian oil production and exports to the US are booming, pipelines are an obvious way to handle logistics. However, Keystone XL, Northern Gateway, Energy East and MacKenzie Valley Oil pipeline projects are stuck in limbo and rail operators have stepped in, in a frantic attempt to compensate. Roaring growth comes at the cost of trains operating at unsafe speeds, outdated tanker cars, and ensuing derailments. The government and firms themselves have been quick to respond by strengthening safety regulations. With prospects outweighing compliance costs, regulation is boosting investment in safety and promoting innovation among rail car producers, setting up the railway industry for robust growth over the forecast period.

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