Changes in the beauty sector didn’t start with the COVID-19 crisis. If the big players had previously held up a mirror before the crisis struck, the first worry lines would already have been visible. Their financial strength has naturally allowed them to develop innovative products and tools, but young independent brands have outstripped them. And now the stores are closed, brands are forced to communicate more online – and newer brands are performing better. Why? In short, they’re doing a better job of differentiating themselves, standing out with their clear positioning and personal approach. This is what set them apart on the shelves before the pandemic. There’s no reason this won’t continue to work for them after the crisis, when people start going back to brick-and-mortar shops to discover new beauty products and cosmetics. That is unless the established brands learn from these young high-flyers – and their own mistakes.
Let’s take a quick look at the time before the crisis: I would stroll through my local drugstore every Saturday. And on weekdays, I’d check out the most expensive beauty boutiques in the world. This had been my routine for the past two decades, and even now, I can confidently say that beauty has never been this exciting. No matter what price category I’m checking out, I encounter a dozen new products, brands, packaging, sensations, crazy ideas, and a barrage of inspiration every time I go. Suddenly, the coveted eye-level shelf space is occupied by five new brands of hair soap. Testing lipstick has become fun and even practical with augmented reality mirrors.
Creativity and boldness have found their ways back into the beauty industry
And then there are new perfumes. Of course, these niche brands have their price. But at long last, it’s possible to obtain fragrances that don’t just look great in their beautiful packaging, but produce a genuinely unique scent that lingers on the skin. Think Laboratory Perfumes, WienerBlut or Michelle Pfeiffer’s Henry Rose, for example. These perfumes are based around unusual ingredients – components long ignored in mass-market perfumes because of the fear they might polarise opinions. And there are also manufacturers noticeably focusing on quality again: in terms of the harvesting of raw materials, their origin, and skin sensitivity. The results are artistic exhibitions of the very best of the perfumer’s craft: creating sensual experiences that transport people to far-flung places, or memories of beloved destinations. And we all enjoy a little escapism, especially right now.
Creativity and boldness have found their way back into the beauty industry, treating consumers to the joy of surprise. Passionate creatives and pioneering experts have returned to a space previously dominated by great icons and industrial conglomerates. And they’re eager to be associated with specific values, each of which speaks to the hearts and minds of their beauty-conscious consumers. Kosas or Act+Acre are examples of brands that challenge the status quo, bringing in new ideas that embody the values of a younger generation. Meanwhile, NOTO and Youth to the People show how brands can advocate inclusion and diversity, in stark contrast to outmoded beauty ideals. And then there are Nécessaire and Wildist, who communicate their consistent efforts to improve the sustainability and skin tolerance of their products. These are but a few examples, but these brands all have something in common: they are a hit among younger consumers. Through their modern approach, they make it easier for young people to identify with their brand, embrace their messages, and ultimately buy their products. They’re seemingly laying waste to the conventions of established beauty giants and growing fast on fertile soil.
Product concepts and communication strategies have been far too general. They addressed anyone and everyone, but at the same time, nobody at all
But is all this really as new and innovative as it first appears? If you analyse every last detail of the formulations and concepts behind these products, you will quickly observe that no-one is actually reinventing the wheel. Almost all these products are based on ones that already existed. And in most cases, these new offerings just have a different look and focus: both the product concepts and their corresponding messages are sharper and more focused.
Herein lies the challenge to established beauty brands. For a long time, their product concepts and communication strategies have been far too general. They addressed anyone and everyone, but at the same time, nobody at all. The goodwill these brands have garnered for their trusted processes, consistent quality of raw materials, elaborate product development and reliable production facilities seem to have lost their relevance. New online companies are able to wow consumers with their flexible production processes and marketing strategies. They take a personal approach. They address their customers on a very individual level. The result is impressive: The market share of new beauty brands increased by 15.7% year on year between 2008 and 2016 – four times as fast as it did for established big players.
TIME FOR A NEW BEAUTY REGIME
As unsettled as the market might currently be, it always pays to understand it and use this knowledge to your advantage. Experts agree – the beauty market will continue to expand. It’s expected to grow by 7% per year, reaching $800 billion by 2025. But what strategy should those brands adopt if they hope to still be dominating the market in five years’ time? There are three essential aspects:
KNOW YOUR DNA
No matter whether yours is a long-established brand or a young startup, you know where the magic of your brand really lies. It doesn’t always have to be something big or grand. The point is rather that you know why people appreciate your brand. You know why people want to be associated with it and you know why they love your products in particular. These are your brand’s roots. Once you know what these roots are, you can play on these in different ways and even place them into new contexts. You can respond to trends, make targeted adjustments to suit different markets, or develop new visuals, and it’s very unlikely that you’ll lose consumers in the process. If your core message remains authentic, you’ll also be culturally credible, so you’ll both build and maintain trust.
LESS IS MORE
Established beauty brands are often fixed on appealing to the lowest common denominator, bombarding consumers with bold claims and details of wonder ingredients or innovative formulas in a bid to reach the largest possible market, and repeating the same promises as their top competitors. It’s time to abandon the idea of jumping on every bandwagon – instead, focus on your own specific messages, and repeat them, where possible, in a very creative and entertaining way.
DON’T BE AFRAID TO EXPERIMENT
It’s hard for a heavyweight to change course quickly. After all, there’s a big difference between being a small and manoeuvrable boat or a tanker with a 5,000-strong crew. But healthy prudence shouldn’t result in visual compromises. How do I please everyone? What’s the best way to appeal to as many people as possible? This way of thinking has led to an aesthetic monoculture among the established brands. Once that big step of launching a product is over with, they’ve tended to want to maintain their success with as much predictability and security as possible – repeating the same strategy.
But this approach no longer works. Our society is undergoing a paradigm shift, and this is having a particularly strong influence on the beauty sector. Consumers are asking what beauty means today, and what it should be. Established ideals are being turned on their heads – evolving into something more individual, imperfect, and diverse than they once were. In tangible terms, people’s desires are changing – they want something new. These have always been the central element of any branding work, and now, it’s about finding the required visual responses and redefining these in a new and different way.
Every brand in the industry now has the opportunity to present its own definition of beauty…. The only requirement: it has to be done well
The COVID-19 crisis has and will continue to increase pressure on the entire economy, including the beauty sector. But all shakeups give brands an opportunity to think anew, reflecting on its past and present performance, and where it wants to be.
The good thing about these modern, fast-moving times – despite the crisis – is that variety and diversity are back and in style. Every brand in the industry now has the opportunity to present its own definition of beauty – with a high chance of market acceptance. The only requirement: it has to be done well.
It’s time to take the path of change – with as much passion and energy as possible. It’s your chance to stand out and thrive.
The Peter Schmidt Group has compiled a consumer insights study based on 750 responses from China, Germany and Japan. The study explores cultural perceptions of beauty, the drivers that inspire consumers to make a purchase, and the key touch points that beauty brands should be focusing on. Email strategie@peter-schmidt-group.de to request an extract; peter-schmidt-group.de.
The post How can global beauty brands compete with newer rivals? appeared first on Creative Review.