Beauty Landscape

Part
01
of four
Part
01

Beauty Industry Trends

The increasing focus on the damage caused by human consumption and plastic use, and the need to preserve our planet is reflected in the global beauty and personal care market with many companies adopting more ecological practices including minimizing waste and water use is prevalent. In line with this, consumers are seeking to use fewer steps in more streamlined routines means that multitasking beauty products are trending. Another trend identified was that of personalization of cosmetic products and skincare, often incorporating technology such as AI and AR, and enabling brands to become more inclusive by meeting the needs of consumers not catered to by the narrow range of mainstream offerings.

Sustainability, zero waste and corporate transparency

  • Market research firm Mintel declared the global beauty trend in 2019 to be that of sub-zero waste. The first ever "packaging free cosmetic shop" opened in the UK in early 2019 by Lush, known for their "naked", zero packaging of solid products.
  • Many beauty brands are focused on decreasing the impact of plastic packaging that normally accompanies their products, such as Ren, which is creating a bottle made from "reclaimed ocean plastic" and seeks to be zero waste by 2021. Other packaging being introduced includes containers which are both recyclable and compostable, such as that from the L'Oreal-incubated brand, Seed Phytonutrients.
  • With the consumer demand for sustainable products also comes the demand for transparency from beauty brands. More brands such as The Ordinary and NIOD, clearly list ingredient trade names on their products so that consumers are able "to easily research the benefits of each".
  • As well as transparency about the provenance of beauty product packaging and ingredients. Consumers are also looking for transparency in the pricing breakdown such as offered by Beauty Pie.

Minimalistic routines and multitasking products

  • After the trend for elaborate skincare routines with steps numbering in the double-digits, a new Korean trend for more minimal routines, also known as "skip-care" is expected to grow.
  • Vogue noted in an article devoted to the skip-care trend that this meant an up-tick in multi-tasking products, which also leaned into the sustainable beauty trend as packaging is also reduced.
  • From a survey conducted in the UK, 28% of women had started to use few products in their skincare routine, particularly millennials of which 54% responded having minimized their routine. These statistics support the idea that women in the West are getting on board with this Asian trend.

Personalization, inclusivity and technology

  • Lancome, part of the L'Oreal group, has introduced a machine in London, UK which uses AI to custom-make foundation, selecting from a range of 20,000 shades.
  • Nearly 50% of consumers "like the idea that a beauty product is personalized especially for them" and 33% believe these products "give better results", concluded market research firm Mintel.
  • This wider range of shades means a greater ability for cosmetics to more accurately match a more diverse range of skin tones, including those at both ends of the spectrum that "have been too often neglected".
  • The European beauty industry in particular is investing in technology in order to offer consumers very personalized products.

Research strategy

Our research team reviewed articles from beauty industry sites including Cosmetic Business, Premium Beauty News and Beauty Independent, as well as mainstream consumer fashion and beauty sites such as Vogue and Harpers Bazaar, business media and market research sites including Mintel. We identified topics that occurred across multiple articles from distinct publications as current or expected trends.
Part
02
of four
Part
02

Beauty Industry Disruptors

Two significant disruptors in the beauty and personal care industry are Emily Weiss and Rihanna.

EMILY WEISS (GLOSSIER INC., INTO THE GLOSS)

  • Emily Weiss is the founder and CEO of Glossier Inc. She is a beauty enthusiast and previously served as a fashion assistant and contributor for Teen Vogue and W magazine.
  • Weiss initially started her company as a beauty blog called Into The Gloss which mainly covers beauty products before establishing her D2C beauty and skincare brand, Glossier.
  • According to her, the company was designed to democratize beauty. Some top-grossing products at Glossier include Boy Brow, Haloscope, Balm Dotcom, Cloud Paint, Milky Jelly Cleanser, and Lash Slick.

HOW SHE IS DISRUPTING
  • Weiss' Glossier is disrupting the beauty industry by encouraging women to build their own top shelf of beauty products, thus creating more active beauty consumers than passive ones.
  • It adopted an approach of crowdsourcing innovation, which allowed it to receive real-time feedback from its customer/fan base of millennials (its primary target market).
  • The company thus became the "first socially-driven brand" to successfully disrupt the beauty industry.
  • "More recently, the company looks to connect the dots of movement between Glossier and Into The Gloss through customer data cross-domain analytics tools that allow the company to track people visiting both platforms. This plan helped them gain a better understanding of consumer buying patterns and cater to their preferences and needs with new product launches, further driving loyalty to the brand."
  • Glossier is also the leading brand for the no-makeup, make up trend.

WHY SHE IS CONSIDERED A MAJOR DISRUPTOR

RIHANNA (FENTY BEAUTY)

  • Robyn Rihanna Fenty, popularly known as Rihanna, is an American singer, actress, and worldwide star. She also owns a cosmetics line in partnership with Moët Hennessy Louis Vuitton (LVMH) called Fenty Beauty.
  • Chairman and CEO of LVMH, Bernard Arnault, described her as a "true entrepreneur, a real CEO, and a terrific leader."
  • She is also the "first woman of color to lead a house under the LVMH brand and the first female to create an original brand in the group."

HOW SHE IS DISRUPTING
  • Rihanna promoted a message to "disrupt and diversify the existing beauty ideal that revolves around white women" in her first advert.
  • Her cosmetic products were launched with 40 foundation color shades for the underserved population of albino men and women whose complexion is often ignored, as well as "dark-skinned black women."
  • Her approach to marketing and branding, including portraying her line's products on women putting on streetwear, posting stories of herself applying the products, and using memes and GIFs, helped her to create a beauty brand that speaks the digital language, thus garnering the attention of millennials and Gen X consumers.
  • Rihanna's brand has helped to "create a new standard of beauty that is diverse and not defined by blonde hair and blue eyes."

WHY SHE IS CONSIDERED A MAJOR DISRUPTOR
  • Her innovation to serve a broader category of women has pushed other established beauty brands such as Dior and Covergirl to re-launch their products to include more color ranges.
  • It also led them to add more women of color to their social media pages, ads, and PR lists, among others.
  • Fenty Beauty recorded $72 million in earned media value within a month of its launch and made $475.5 million in sales by the end of 2018.
  • Rihanna's brand won the Launch of the Year 2017 Beauty Inc. award by WWD in the prestige sector.



Part
03
of four
Part
03

Beauty Industry Competitive Landscape 1

Estee Lauder Companies is a global manufacturer and marketer of beauty products and is one of the leading prestigious beauty companies on major retailer websites in the United Kingdom and the United States. Avon is also a global beauty company with a presence in over one hundred countries. Revlon is a provider of beauty care, skincare, fragrance, and hair products.

AVON

ANNUAL REVENUE
PRODUCT OVERVIEW
  • Avon sells a range of beauty products suitable for the eye, face, lips, nails, and lips. The products include powder, foundation and primer, contour and highlight, blush and bronzer, gel finish, waterproof eyeliner, Lipsticks, lip gloss, lip care, and makeup tools and brushes among others.
  • Their most important brands are AVON, Avon True Color, ANEW, Avon Naturals, Solutions, Skin So Soft, Avon Senses, and Feelin Fresh.
OVERVIEW OF MARKETING MESSAGING
  • The recent marketing messaging was "Naked Proof", an anti-cellulite marketing campaign. However, due to criticism from several sources the company removed the messaging from it's marketing materials. The company is set to launch another marketing campaign later in October dubbed, "Live Your Best Life".
COMPETITIVE ADVANTAGE
  • Avon has millions of representatives working on its distribution channel across the world. Avon is globally recognized as a brand that meets the needs of women.
  • Avon has a huge customer base and they also have a decentralized product development that has led to a diverse and extensive product portfolio.
  • Avon, through its online representatives, updates its customers on new products on the market.
  • The company has enacted special incentive programs that motivate their sales personnel and reward those with outstanding sales performance.

THE ESTEE LAUDER COMPANIES

ANNUAL REVENUE
  • Estee's revenue for the fiscal year that ended in June of 2019 was $14,863 million.
PRODUCT OVERVIEW
  • The Estee Lauder Companies Inc. manufactures and markets skincare, fragrance, makeup, and hair care products.
  • The company works with the following brands: Estee Lauder, Aramis, Lab Series, Tommy Hilfiger, Kiton, Donna Karan New York, Aveda, "Jo Malone London, Bumble and bumble, Michael Kors, Darphin, Tom Ford, Smashbox, Ermenegildo Zegna, AERIN, Tory Burch, RODIN olio lusso, Le Labo, Editions de Parfums Frederic Malle, GLAMGLOW, By Kilian, BECCA and Too Faced."
OVERVIEW OF RECENT MARKETING MESSAGING
  • Estee Lauder Companies' marketing campaigns have been centered around its mission statement which is "Bringing The Best To Everyone We Touch." This marketing philosophy is focused on providing a high touch quality service and products. Consequently, this then provides a solid foundation for loyal customers.
COMPETITIVE ADVANTAGE
  • Their "portfolio of brands is diversified by category, geography, and channel, allowing them to offer consumers the very best where and when they like to shop."
  • Their cultural relevance is critical to their global success as the company ensures that their messaging, products, and in-store experiences "reflect the aspirations and desires of consumers in local markets."
  • The company is also strategic and selective about where and how individual brands are sold thus they maintain a prestige positioning while ensuring their customers have a great experience.
  • They also stay up to date with beauty trends by listening and responding to the needs of their consumers through social media platforms and digital commerce.
  • Having selective distribution has been the hallmark of the company's business strategy. They entice their customers with unique in-store experiences and "offering them valuable me" time — a respite from their daily routines — draws them to their brands and distinguishes them from competitors."
  • Estee Lauder Companies has about "1,700 e/m-commerce websites in over fifty countries. They are also the "number one prestige beauty company on major retailer websites in the United States and the United Kingdom. "
  • The company is a global leader in travel retail, which is one of the company's highest growth channels, which covers cruises, border shops, airlines, airports, and downtown locations.

REVLON

ANNUAL REVENUE
OVERVIEW OF MAJOR PRODUCT LINES
  • Revlon focuses on selling and marketing makeup products for the face, lips, nails, and eyes. They also have beauty tools such as makeup brushes and applicators, tweezers, eye tools, manicure and pedicure tools, skincare tools, and accessories and kits.
  • They also offer hair products such as bleach, root touch up, permanent hair color, hair highlights, and hair tools such as hair dryer, styler, combs, among others.
  • Revlon brands include Revlon, Elizabeth Arden, American Crew, ALMAY, Juicy Couture, and CNDC.
OVERVIEW OF RECENT MARKETING FOCUS
  • Dubbed "I Can. So I Did" is Revlon's recent influencer-backed campaign with Instagram sweepstakes. The campaign which ended in March 2019, involved a cash price of $4,000 and a trip for two to New York.
  • The purpose of the campaign was to help the company increase its sales, which declined in 2018.
COMPETITIVE ADVANTAGE
  • Revlon has been consistently improving its makeup and skincare products through consistent innovation and advancements.
  • The company is putting a lot of emphasis on competitive marketing for each of its brands and executes the plans that are programmed to ensure that the positioning of each brand is consistent across all customer touchpoints.
  • Revlon educates its customers and salon professionals about the benefits of their products.
  • Their product prices are attractive and they ensure the availability of their products through productive planning. They also have a strong and efficacious promotion, advertising, marketing, merchandising, social media, and influencer support.
Part
04
of four
Part
04

Beauty Industry Competitive Landscape 2

Proctor & Gamble (P&G) is one of the largest companies in the beauty/personal care market and focuses on value diversification for producers and in dominating the production chain, while L'Oréal focuses on technological advances and Unilever invests in socio-environmental banners. Complete details about each of these companies' efforts in the beauty and personal care industry are presented below.

PROCTER & GAMBLE

MOST RECENT ANNUAL REVENUE
MAJOR PRODUCTS LINES IN THE BEAUTY/PERSONAL CARE MARKET
  • P&G has nine total beauty brands, with an emphasis on major brands including Head & Shoulders, Herbal Essences, Olay and Gillette.
  • Located in Cincinnati, Ohio, P&G holds a significant position in the skin care and hair care business with several well-known brands like Aussie, Ivory, Old Spice, Pantene, Safeguard, Secret, Crest, Oral-B, Scope, Art of Shaving, and more.
  • The company offers a wide range of beauty and personal care products for all men and women, as well as babies and kids.
  • In fiscal 2017, Procter & Gamble streamlined its product portfolio by divesting, discontinuing and consolidating around 100 “non-strategic” brands, which included four product categories spanning 43 hair care, hair styling, color cosmetics and fine fragrance lines under its beauty brand umbrella. The goal of the restructuring, coupled with newly honed marketing and advertising objectives and expenditures (cut by 50%), was to create leaner, more focused support for the company’s remaining 65 brands across 10 key categories.
  • Procter & Gamble (P&G) is once again diversifying its beauty offering with the acquisition of Walker & Company Brands. The personal care company is adding branded beauty products focused on people of color. Walker & Company Brands, which will operate as a separate and wholly owned subsidiary of P&G, includes the Bevel and FORM Beauty hair care specialist ranges.
RECENT MARKETING FOCUS/MESSAGING RELATED TO THIS MARKET
  • The company is focusing on technological advancement. P&G is launching Proctor and Gamble's Opté gadget (P&G), a makeup printer. The technology scans the skin and precisely applies small amounts of makeup to conceal age spots, burst blood vessels and other blemishes. Due to the accuracy of the equipment, P&G has determined that, in addition to improving the result, the cost of makeup will fall.
  • Procter & Gamble stands out for sustainability with the launch of a new USP brand that is "unrestricted." The new line will cover personal care with cleansing bars designed for the face, body and hair that are both environmentally and conveniently billable thanks to a unique process that eliminates water from the end product. Packaging is recyclable and biodegradable and formulators avoid harsh chemicals.
  • With the acquisition of Gillette, P&G became the largest advertiser in the United States, spending more than $2.3 billion a year, or nearly double its second advertiser, General Motors Corp.
  • In recent years, the company has focused more of its advertising budget on online marketing and social media such as Facebook, Twitter and blogs. These actions help inject greater emotional appeal into its communications and create deeper customer ties.
  • P&G credited a shift in beauty marketing from "generic demographics" to "smart audiences," helping to improve the effectiveness of its marketing and innovation pipeline. It is using the more than 1 billion consumer IDs it needs to create audience segments and then "propensity marketing with people with similar characteristics."
  • The shift structures its marketing message, ranging from generic demographic segmentation, such as women ages 18-35, to more than 350 smart and accurate audiences, such as beginning moms or millennial professionals. So they want to reach the right people in the right places.
  • Another marketing strategy that P&G Beauty has adopted is to buy small brands, appealing to the growing demand for this market; its trying to keep these smaller brands from being associated with P&G to maintain the organic appeal of these smaller brands.
  • As an example, one of P&G's beauty brands, Olay, ran a marketing campaign focused on middle-aged women on Women's Day. The campaign reinforces a message of feminist empowerment against oppression within relationships by associating it with the marks of tension.
COMPETITIVE ADVANTAGE
  • P&G's reputation as a major marketing company matches its excellence as a manufacturing company. P&G makes significant investments in developing and improving production operations to keep its costs among the lowest in the industry, enabling it to reduce premium prices for some of its products.
  • P&G focuses on innovation to differentiate its brands from the competition. It combines the needs and possible solutions to problems by conducting research and development (R&D) and knowing what people need and want. It wants to be known as a company that is governed responsibly and behaves ethically, that is, it supports good causes and protects the environment.
  • P&G employees are well treated and offer the opportunity to improve and perform well in the company.
  • P&G's “Doing Good by Doing Good” is cause-oriented marketing. An example of "doing good by doing good" practiced by other organizations is when organizations donate to a chosen cause for each customer purchase. P&G has made it an important strategy to define its role in the community and apply social and ethical standards to its business.

L'ORÉAL

MOST RECENT ANNUAL REVENUE
MAJOR PRODUCTS LINES IN THE BEAUTY/PERSONAL CARE MARKET
  • As one of the world's largest cosmetics companies and leading beauty brands, L'Oréal began its journey in the cosmetics industry more than a century ago in 1909.
  • Its product range includes colorful cosmetics, skin care, hair, sun care products and fragrances. Its most important brands include L'Oréal Paris, Garnier, Maybelline New York and Softsheen. The company also sells luxury brands such as Lancome, Giorgio Armani, Yves Saint Laurent and Kiehl's.
  • L'Oréal specializes in professional hair care products such as Kérastase, Redken, Matrix and Pureology, and has distributors of beauty products such as The Body Shop.
  • L'Oréal also has very expensive skin and hair care brands including Pureology, La Roche-Posay and SkinCeuticals.
RECENT MARKETING FOCUS/MESSAGING RELATED TO THIS MARKET
  • The company is investing in technology. L'Oréal subsidiary Lancome has created a custom foundation machine called Le Teint Particulier that promises to find the "exact match" color for your skin using AI.
  • Lancome consultants first determine the skin tone of the face using a handheld colorimeter—a type of digital scanner. The results are executed on a computer, which uses a proprietary algorithm to choose from 20,000 different tones. Finally, computer discoveries are sent to a matching machine in the store.
  • Each brand in L'Oréal's portfolio is known for its integrated marketing communications. These brands are not only famous for their above-the-line marketing campaigns, but are also very good at the point of sale.
  • Since 2018, most of L'Oréal's marketing campaign efforts have been centered around technology, aiming to emerge in this industry. Spreads the "future" of the world beauty market, very focused on women.
  • One example is the beauty service, Modiface, which L'Oréal purchased in March, as an example of how product businesses can diversify services. It uses AR to develop custom beauty applications, offering, for example, a tool that allows consumers to try different makeup and hair products online to see how they will look.
  • L'Oréal has changed its strategy in recent years, moving away from its former goal of being the number one beauty brand instead of becoming "the number one beauty technology company".
COMPETITIVE ADVANTAGE
  • According to market research firm Mintel, the demand for custom cosmetics is growing rapidly. Almost half of consumers like the idea that a beauty product is customized especially for them. L'Oréal is investing in technologies that make products customizable.
  • Consumers of beauty products are increasingly concerned about health, giving preference to organic ingredients that do not harm the skin. This has been one of L'Oréal's main focuses.
  • L'Oréal adopted a diversification strategy to stay ahead of its competitors by expanding the market through 'Multicultural New Project Diversification New Market Development.'
  • The company is at the forefront in developing convergence solutions (hybrid cosmetic solutions for medical and other technology-based chemicals) and biotechnologies. This is inspired by the Korean market, which is gaining broad space in the global market.


UNILEVER

MOST RECENT ANNUAL REVENUE
MAJOR PRODUCTS LINES IN THE BEAUTY/PERSONAL CARE MARKET
  • Unilever has earned a place in the cosmetics industry with popular cosmetic brands such as Ax / Lynx, Dove, Lifebuoy, Pond's, Close-Up, TRESemmé, Smooth, Sunsilk and Vaseline. In 2017, Unilever announced the creation of a new company, Unilever Cosmetics International, to expand its global portfolio of prestigious beauty and fragrance brands.
  • Unilever has 38 total beauty sub-brands, many of which are basic in US pharmacies, including Nexxus, Ponds, TIGI, DIGI, Vaseline and Lever 2000. Also, it has some popular brands outside the US, including Fair & Lovely, a “fairness cream” that is marketed in India as a women's skin lightening lotion.
  • Skin Cleansing, Skin Care, Hair Care, Deodorants, Make Up and Oral Care are the top selling lines by Unilever beauty/personal care.
RECENT MARKETING FOCUS/MESSAGING RELATED TO THIS MARKET
  • The Unilever marketing campaign has been driven by social issues, such as Dove's campaign for Real Beauty, which challenges current stereotypes about beauty.
  • To set Unilever apart and combat what Jope calls "woke-washing"—the social responsibility equivalent of "greenwashing," bogus campaigns aimed at appearing environmentally conscious—he's raising the volume on the message. In an effort to transform hundreds of products such as Tresemmé shampoo and spread into beacons of justice and empowerment, Jope (chief marketing officer) has ordered executives to assign a clear, specific mission to each.
  • The new CEO says aligning each brand with a specific concern, rather than a broader abstraction of goals in the parent company, will enhance credibility. These include Lifebuoy soap, which teaches children handwashing techniques in emerging economies to reduce the 5 million premature deaths from poor hygiene-related infectious diseases a year.
  • Another drastic change that Unilever is proposing for marketing is to reduce the amount of massive beauty/personal care campaigns to real-time campaigns (via social networks).
COMPETITIVE ADVANTAGE
  • In the area of sustainability, Unilever Beauty/Personal Care works to reduce GHG emissions, reduce water use and halve the internal footprint, which is competitive in a society where consumers are charging for it.
  • Unilever Beauty/Personal Care's Sustainable Living Plan is a transformational strategy. Jope's ethical business mission, which is William Lever's maxim, is to "do good by doing good," which underlines all other CSR programs. This creates a sustainable competitive advantage by attracting people to pay more for the product.
  • The company is based on the concept of meeting unmet social needs, explained in the products that Unilever presents to the market, such as soap, toothpaste, and so on.
  • Unilever's strategies are focused on driving growth, cutting costs, helping customers and motivating employees. The company purchased 48% of its raw materials sustainably.
Sources
Sources

From Part 01
From Part 03
From Part 04