Unilever and iVillage have been circumspect about their venture, announced in February, not even divulging a name until Charles Strauss, President-CEO of Unilever U.S. and a board member of Substance, mentioned it during a speech at the Internet World conference last week.
CHANGE IN PLAN
While earlier media reports and Unilever's own February news release indicated the venture would sell products, Mr. Strauss said in an interview with Advertising Age that direct-to-consumer e-commerce is not in Unilever's current plans, through Substance or elsewhere.
"Anything we do has a commercial motivation behind it," Mr. Strauss said. "But when you're talking about e-commerce, you're talking about marketing or selling or providing some type of delivery to consumers via the Internet. . . . Our iVillage partners would say it's much more about" getting information out to consumers than selling products on Substance.
In his speech, Mr. Strauss described Substance as "a highly focused community of women built around a beauty site," adding that it would offer "an array of interactive, personalized online services and product recommendations about beauty and personal care."
The basis of the business plan also includes selling "access to a wide range of products and services," he said, but not actually making direct sales.
IVillage's beauty channel, the current manifestation of Unilever's joint venture, ranked as the No. 1 beauty site in the U.S. for July and saw a 23% increase in traffic in August, Mr. Strauss said in citing Media Metrix data. Substance will be an outgrowth of iVillage's beauty channel, a Unilever spokesman said.
Bartle Bogle Hegarty, New York, is the agency for Substance. Details and spending for the ad campaign that's to break next spring were not disclosed.
SALES BY E-TAILERS, RETAILERS
Beyond Substance, Unilever also has no other plans for direct-to-consumer sales "other than the work we're doing with existing e-tailers, others coming on board or some of the approaches our more traditional retailers are taking," said Mr. Strauss, who also is president of Unilever's Home & Personal Care business in North America and a director of the global company.
In contrast, Unilever rival P&G has a majority stake in customized beauty-care e-tailer Reflect.com and recently began selling new products through its corporate Web site, PG.com, prior to products' national launch in conventional channels, as a way of building buzz among early adopters (AA, Oct. 23).
At the same time, many pure-play e-tailers selling beauty products have had a difficult time making money. Idealab-backed Eve.com shut its doors Oct. 20; the same day, Amazon.com-backed Drug-store.com, owner of Beauty.com, laid off 10% of its staff, or about 60 employees.
"We do not see [direct sales] as a major business opportunity at this time," said Mr. Strauss, who sees the Internet as a way of "developing intimate, trusting and loyal relationships" between consumers and brands.
"We find from our consumers that they're far more interested in using the Internet for the value that it gives . . . and acquiring or purchasing our brands through normal retail customers," he said. "That's what they're doing. And we go with our consumers."
Beyond the iVillage venture, Unilever also hopes to keep building individual relationships between consumers and brands by offering individualized meal planning, through such sites as Lipton's RecipeSecrets site (recipesecrets.com). But Mr. Strauss said he doesn't see banner ads or encouraging "promiscuous consumption" through e-coupons as successful models for Internet marketing.
"Success won't even be about using the Internet to target nice, neat demographic groups," he said. "The individual does matter, and we know from our research that she's not online waiting to be targeted and bombarded as an assumed member of some age/sex cohort. That's the stuff of the old mass-marketing world. We need to build trust and individualized relationships."