How can world magnificence manufacturers compete with newer rivals?
Changes in the beauty sector did not start with the COVID 19 crisis. If the major players had held up a mirror before the crisis broke out, the first lines of concern would have been visible. Their financial strength has of course enabled them to develop innovative products and tools, but young independent brands have outperformed them. And now the stores are closed, brands are forced to communicate more online – and newer brands do better. Why? In short, they differentiate themselves better and are characterized by a clear positioning and a personal approach. This is what sets them apart on the shelves before the pandemic. There is no reason why this will not work for them after the crisis when people return to brick-and-mortar stores to discover new beauty products and cosmetics. 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 strolled through my local drugstore every Saturday. And on weekdays I would check out the world's most expensive beauty boutiques. This has been my routine for the past two decades, and even now I can confidently say that beauty has never been so exciting. No matter what price category I am in, I always come across a dozen new products, brands, packaging, sensations, crazy ideas and a flood of inspiration. Suddenly, the coveted shelf area at eye level is occupied by five new hair soap brands. Testing lipstick is fun and even practical with augmented reality mirrors.
Creativity and boldness have found their way back into the beauty industry
And then there are new perfumes. Of course, these niche brands have their price. But finally it is possible to get fragrances that not only look good in their beautiful packaging, but also create a truly unique fragrance that lingers on the skin. Think, for example, of laboratory perfumes, WienerBlut or Michelle Pfeiffers Henry Rose. These perfumes are based on unusual ingredients – components that have long been ignored in mass-market perfumes because they fear they may polarize opinions. And there are also manufacturers who are again noticeably concentrating on quality: in terms of harvesting raw materials, their origin and skin sensitivity. The result is artistic exhibitions by the best perfumers: sensual experiences that take people to far away places, or memories of loved ones. And we are all enjoying a little escape right now.
Creativity and boldness have found their way back into the beauty industry and spoiled consumers with the joy of surprise. Passionate creatives and pioneering experts have returned to a space that was previously dominated by large icons and industrial conglomerates. And they strive to be associated with certain values, each of which appeals to the hearts and minds of their beauty conscious. Kosas or Act + Acre are examples of brands that question the status quo and bring in new ideas that embody the values of a younger generation. In the meantime, NOTO and Youth to the People show how brands can promote inclusion and diversity, in stark contrast to outdated ideals of beauty. And then there are Nécessaire and Wildist who communicate their consistent efforts to improve the sustainability and skin tolerance of their products. These are just a few examples, but all of these brands have something in common: they are a hit with younger consumers. With their modern approach, they make it easier for young people to identify with their brand, accept their messages and ultimately buy their products. They seem to devastate the conventions of established beauty giants and grow quickly on fertile ground.
Product concepts and communication strategies were far too general. They addressed everyone, but at the same time nobody at all
But is it really as new and innovative as it first appears? If you analyze every detail of the wording and concepts behind these products, you will quickly find that nobody actually reinvents the wheel. Almost all of these products are based on existing ones. In most cases, these new offers only look different and concentrate: both the product concepts and the corresponding messages are sharper and more focused.
This is the challenge for established beauty brands. Their product concepts and communication strategies were far too general for a long time. They addressed everyone, but at the same time nobody at all. The goodwill of these brands for their trustworthy processes, the consistent quality of the raw materials, the complex product development and the reliable production facilities seem to have lost relevance. New online companies can inspire consumers with their flexible production processes and marketing strategies. You proceed personally. They address their customers very individually. The result is impressive: Between 2008 and 2016, the market share of new beauty brands increased by 15.7% compared to the previous year – four times faster than that of established big players.
TIME FOR A NEW BEAUTY REGIME
As troubled as the market is at the moment, it is always worth understanding it and using this knowledge to your advantage. Experts agree – the beauty market will continue to grow. Annual growth of 7% is expected to reach $ 800 billion by 2025. But what strategy should these brands pursue if they hope to dominate the market in five years? There are three main aspects:
KNOW YOUR DNA
No matter whether your brand 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 great. It's more about knowing why people appreciate your brand. You know why people want to be associated with it and you know why they particularly love your products. These are the roots of your brand. Once you know what these roots are, you can play with them in different ways and even put them in new contexts. You can react to trends, make targeted adjustments to different markets or develop new visual elements. You are very unlikely to lose consumers in the process. If your core message remains authentic, you are also culturally credible so that you build and maintain trust.
LESS IS MORE
Established beauty brands are often geared towards addressing the lowest common denominator, bombarding consumers with bold claims and details about miracle ingredients or innovative formulas to reach the largest possible market, and repeating the same promises as their top competitors. It's time to give up the idea of jumping on every train. Instead, focus on your own specific messages and, if possible, repeat them in a very creative and entertaining way.
Don't be afraid of experiments
It is difficult for a heavyweight to change course quickly. After all, there is a big difference between a small and manoeuvrable boat or a tanker with a crew of 5,000 men. However, healthy caution should not lead to visual compromises. How am I happy about everyone? What is the best way to reach as many people as possible? This mindset has resulted in an aesthetic monoculture among the established brands. Once this big step in product launch is complete, they want to maintain their success with as much predictability and security as possible – and repeat the same strategy.
However, this approach no longer works. Our society is undergoing a paradigm shift that has a particularly strong impact on the beauty sector. Consumers ask what beauty means today and what it should be. Established ideals are turned upside down and develop into something more individual, more imperfect and more diverse than before. Specifically, people's wishes change – they want something new. These have always been the central element of any branding work. The task now is to find the required visual answers and to redefine them in a new and different way.
Every brand in the industry now has the opportunity to present their own definition of beauty. The only requirement: it must be done well
The COVID-19 crisis has and will further increase pressure on the entire economy, including the beauty sector. But all shakeups give brands the opportunity to rethink, reflect on their past and present performance and where they want to be.
The good thing about these modern, fast-moving times – despite the crisis – is that diversity and diversity are back and in style. Every brand in the industry now has the opportunity to present their own definition of beauty – with a high chance of market acceptance. The only requirement: it must be done well.
It is time to take the path of change – with as much passion and energy as possible. It is 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 examines the cultural perceptions of beauty, the drivers that inspire consumers to buy, and the key touch points that beauty brands should focus on. Send an email to strategie@peter-schmidt-group.de to request an excerpt. peter-schmidt-group.de.