Coty's Philosophy Brand Commits To Cause Largely Ignored By Marketers
Coty Skincare CMO Jill Scalamandre believes Twitter CEO Biz Stone's proclamation that philanthropy is the new marketing. But she also sees too many beauty brands adopting the same causes. That's one reason her Philosophy brand is backing one largely ignored by the marketing world – mental health.
The brand is making an open-ended commitment of donating 1% of all U.S. sales to mental health, which it believes fits with its heritage of putting optimistic messages on its packages.
In a soft launch that started in July, Coty started applying the 1% to online sales. That expands to all U.S. sales as of Jan. 1, dovetailing with the relaunch of the brand's flagship product, Hope in a Jar, as Hope Renewed.
But well beyond that, the mental-health initiative – dubbed the Hope & Grace Fund -- will be a cornerstone of overall brand marketing for years to come, with mentions in print, digital, in-store and e-mail and direct-mail. Philosophy is also creating unbranded TV public-service announcements for the effort, and may take to TV with branded efforts as well, Ms. Scalamandre said.
Ultimately, the open-ended commitment will expand overseas, primarily in Europe, and is expected to raise more than $10 million for mental health over the next five years alone. It's a substantial amount for a brand that spent only $7.4 million in U.S. measured media last year, according to Kantar Media.
Ms. Scalamandre said the beauty industry has focused mainly on breast and ovarian cancer. Mental health has a stigma she believes has kept marketers away. "Our role at Philosophy is to break the stigma, to be advocates and not be ashamed," she said. She also wanted to go beyond other cause programs dedicated to a single product, month or time of year.
"It wasn't like 'Let's go find a cause and be a cause marketer,'" she said. "It was about 'Let's go engage more deeply.' As we looked at our core consumer, the mental-health space just came out as a natural place for Philosophy to be and own."
One in four women suffer some form of mental health problem, she said, "a spectrum of anything from depression and anxiety to a traumatic life event that triggers acute depression, to bipolar disorder or schizophrenia."
It's a complex issue that doesn't lend itself to writing a big check annually to one charity. So Coty has joined with the non-profit New Venture Fund to oversee the program, screen applications and award grants averaging $25,000 to community organizations. Ms. Scalamandre expects the process – both the applications and awards -- to help build social-media awareness of the program, too.
The move comes as prestige skincare has slowed of late in the U.S. to 2% growth last quarter, compared to 10% for makeup and 4% for fragrance, according to NPD Group. Coty has had its bumps the past year too -- just last quarter it recovered to 1% organic sales growth globally after a year of declines as it bore the brunt of the nail-polish bust that followed years of boom. Coty CEO Michele Scannavini stepped down in September for personal reasons, replaced by Chairman and interim CEO Bart Becht, former CEO of RB.
But Philosophy has been a bright spot for Coty, with six straight quarters of growth, and Ms. Scalamandre expects the mental-health initiative to fuel further gains amid a return to high-single-digit growth broadly in U.S. prestige skincare.