How The Beauty Industry Is Adapting To Change

Almost none of the industry leaders and upcoming independents ignored the indications of the change in the market.

Camillo Pane, the CEO of Coty, talked about speed. “Brands are created at the speed of light,” he said. “The beauty industry is becoming increasingly complex. Our instinct is to dislike complexity. But we either embrace it, or we’re not going to be around.”

 

Marc Rey, the President & CEO of Shiseido Americas, pointed out that traditional makeup was down 1.3% in 2016. But independent brands were up 42.7%. His implication was that the growth of independent brands was a reflection of a change in consumer tastes that everyone in the business has to respond to. The question is how.

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Kat Von D of the eponymous beauty company talked about how the barriers to entry have been lowered, creating a competitive threat to the established players. “It’s like music, everyone can do it now so in order to succeed you actually have to be f**king good.” She also talked about how customers have changed. Referring to the growth of the cruelty-free market she said, “millennials really do care.”

Mike George, the president and CEO of QVC, recognized the threats coming from sources that are much bigger than the beauty industry itself. He said there is a “collapse of institutional and brand authority.” He believes there are four reasons for the changes:

  • Erosion of trust in society
  • Race to the bottom (he’s referring to everyone trying to compete by selling at the lowest price)
  • Craving for authenticity
  • Shifting sources of influence.

He was very down on e-commerce. He said, “E-commerce creates a race to the bottom where price is the primary attribute and retailers devalue the role of brands. In beauty we’ve resisted that but it’s hampered so many categories.” I disagree with him on that one. While there is certainly lots of price competition for comparable products in e-commerce, whether it’s online or in traditional stores, my observation is that consumers want unique products and experiences and they will pay for them when they’re what the consumer wants. It makes me wonder whether QVC is feeling squeezed by e-commerce and the possibility that video on demand over the web will threaten their franchise.

He also talked about changing boundaries in the beauty business, referring to several phenomena:

  • Masstige (inexpensive but marketed as luxury)
  • The desire of consumers to have beauty products along with health and wellness products all together in one
  • Creating spa experiences at home.

All those phenomena involve an overlap in categories that used to be discrete.

He lamented the way technology is impinging on the way consumers want to live. “With all technology, we see consumers craving to bring humanity back to an increasingly impersonal world and increasingly impersonal shopping experience. We need to find ways to simplify the overwhelming complexity of the world we live in.”

Jo Malone, the founder of the beauty brand of the same name who has now founded another brand called Jo Loves  said, “I speak to teenagers and I ask them, “What do entrepreneurs mean to you?” She said the teens tell her three things:

  • “They set goals and walk towards them and fulfill them with warrior-like tactics”
  • “They’re people who change the language of the world and cause people to want to drop everything and follow them.”
  • “They question and challenge everyone and everything but they deliver world-changing products and concepts and they add a lot to our lives.”

Malone summarizes these three answers into three words: passion, resilience and creativity. She also believes that we have to “change the way we create fragrance.” She thinks about fragrance all the time. During a presentation by Vicky Tsai of the brand Tatcha regarding modern day geishas’ beauty habits, Malone asked her, “what do Geishas smell like?” (Tsai told her, “They smell like babies.”)

Malone believes that millennials (which she used to believe was “something you planted in your garden”) aren’t just looking at their phones when you see them zombie-like in public places. “They create a community and their own language and their own world and communicate and consume in a different way.” Referring to consumers’ ability to do your marketing for you by communicating with each other on social media, she said, “They take it all up and spread the word for you. You think they’re not taking it in but they are. They don’t want to be just your consumer, or be entertained by you, they want to create with you, they want to touch the heartbeat and be part of the creative process… they want to be part of it.”

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Source:

https://www.forbes.com/sites/richardkestenbaum/2017/06/19/how-the-beauty-industry-is-adapting-to-change/#f473bef36813

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