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GLOBAL 2016: Changing shopping habits challenge brands to innovate

Global expansion continues despite slower economic growth

Personal care brands contended with many ongoing challenges, including the appearance of small disruptor brands enabled by e-commerce and heated competition for limited shelf space in physical stores.

In addition, consumers expected brands to supply expert advice, greater convenience, more product innovation, improved product functionality and, in some instances, a higher purpose. The shopping habits of millennials, and evolving attitudes about gender and beauty added further complication.
 
Mobile accelerated many of these trends and also facilitated the expansion of personal care products in many developing parts of the world, where brand leaders attempted to customize their offerings to meet local market needs, while also achieving global economies of scale.
 
Meanwhile, global business became more difficult. With slower economic growth in China and Brazil, price-conscious consumers considered local brands, which over time have improved in product quality and marketing expertise.
 
Two brands reappeared in the BrandZ™ Personal Care Top 15: Pantene Pro-V, a hair care brand; and Shiseido, a Japanese personal care brand offering a range of products including skin care and make-up. The brand value of the BrandZ™ Personal Care Top 15 increased 2 percent, the same modest improvement as a year ago.
 


The changing shopper
Like most consumer product marketers, the leading personal care brands filled retail shelves with product variants to drive volume by drawing consumer eye contact and consideration. But consumers sometimes looked elsewhere, to their hand-held devices.
 
Personal care shoppers traditionally shopped with a consideration set of two or three brands, according to Kantar Retail. But now, as they walked the aisles checking screens for deals and coupons, some brand leaders felt compelled to compete primarily on price, filling shelves with value and premium products and potentially shrinking the middle tier.
 
Millennials drove interest in online subscription purchasing, which impacted Gillette razor blade sales in particular. But subscription offerings also included curated offerings from brands such as Birchbox and Birchbox Man. Wellness-focused collections combined vitamins and personal care products.
 
Increasingly, millennial dads strolled store aisles, not just to fill a spouse’s shopping list, but as active decision makers with different, little-understood shopping habits, such as being more influenced by in-store signage and promotional offers, according to MediaCom research.
 
Loyalty, innovation and purpose
These changes happened in a marketplace where the major brands faced intense competition from price-competitive private labels that have improved in quality and branding sophistication.
 
Building loyalty in this world, where consumers increasingly made purchase decisions based on volition rather that habit, required brands to provide the basics – product efficacy, convenience and, value – and also to differentiate with authenticity. According to Kantar Retail, being seen as authentic required meeting consumer expectations that were both personal (Did you meet my individual needs?) and social (Does the brand meet those needs in an ethical and responsible way?).
 
To effectively communicate this information, brands often turned to bloggers and brand -advocates. Estée Lauder continued to expand its presence on social media and e-commerce sites and some of the messages came from its brand representative Kendall Jenner.
 
Still, brands encountered niche premium disruptors that have relatively easy access to the marketplace because of social media and e-commerce. To strengthen relevance and differentiation, brand leaders introduced technology-driven innovation. L’Oréal Paris introduced an online platform called L’Oréal Paris Designer and added the latest version of its Makeup Genius, an app that enables the user to virtually try on makeup and use a smart phone as a mirror.
 
Oral-B connected its electric toothbrush to a smart phone app that tracks dental hygiene over time the way physical fitness apps track exercise and wellbeing. Tracking detail hygiene linked the brand with the larger purpose of maintaining personal wellness.
 
Evolving ideals of beauty
Brands also developed creative solutions to remain relevant in the cultural conversation about beauty and gender, which continues to evolve since Dove first challenged the idealized view of female beauty, with its “Real Beauty” campaign 12 years ago.
 
Today, physical appearance is only one dimension of a more comprehensive view of female beauty that not only considers how other people view a woman, but more importantly how a woman feels about herself. Beauty becomes the outward expression of inner strength, self-confidence and character.
 
In the latest iteration of its campaign about women’s self-esteem, Dove has created advice boards on Pinterest. Ads showing the luxurious hair of Pantene Pro-V’s spokeswoman, singer Selena Gomez, ended with the tagline “Strong is Beautiful”, communicating both the benefit of the brand’s shampoo and the idea that beautiful hair radiates strength. In Super Bowl ads that also commented on masculinity, NFL players styled their daughters’ hair. Each spot ended with the tagline, “Strong is Beautiful”.
 
The shift in attitudes about beauty touched the burgeoning men’s grooming sector. Along with Gillette, L’Oréal Paris, Dove and Nivea were among the many brands occupying shelf space with expanding ranges of shaving and skin care products formulated and packaged for men, and purchased by men as both shopper and consumer.
 
Attitudes about physical beauty were also impacted by the needs of aging baby boomers. Nivea added to its Cellular range of anti-aging creams, for example. New fillers appeared, some including botox for home use, expanding the DIY aspect of the personal care category. And more products appeared for thickening and enhancing eyebrows and lengthening eyelashes.
 
Global expansion
In Asia, the pressure to look good and reverse aging is a strong trend that impacts women as well as men who, particularly in South Korea, are more likely to use make-up. The facial regime generally is more complicated in Asia; in China, women may use as many as seven facial products both morning and night.
 
Global brand leaders attempted to understand and respond to local concepts of beauty. In India, for example, L’Oréal Paris researched Ayurvedic medicine to develop products based on plant extracts. In South Africa, research by Added Value found that black South African women increasingly responded favorably to ideals of beauty based on their local heritage rather than those of the white culture.
 
Kantar Wordpanel discovered that personal care is one of the categories in which Chinese consumers will pay a premium for items related to improved health or quality of life, such as skin care or toothpaste. A local skin care brand like Herborist, which updates Chinese ancient knowledge of herbal treatments with modern technology, is marketed outside of China and illustrates the possibility of building a uniquely Chinese global brand.
 
The personal care category is somewhat less competitive in developing country markets. In much of Latin America, for example, global brands feel less margin pressure as people move into the middle class and experience certain consumer goods for the first time. At the same time, in much of the world people continue to turn to personal care products because they associate physical enhancement with success.

Brand Building Action Points

1. Be more local.
It is old advice for brands going global, but a new context makes it more urgent. In many growing country markets consumers have more money to spend and more choice as local brands improve in product quality and marketing acumen.
 
2. Innovate.
In a crowded category, innovation is important for differentiating, gaining consumer attention and growing market share. Innovation means developing new products, which can take substantial investment of money and time, but it can also mean using technology cleverly to add services.

3. Examine assumptions.
Old assumptions do not always apply to the new generations. Millennial dads, for example, shop differently than their fathers. They often are the decision maker as well as the shopper, and they are more likely than their spouses to be influenced by in-store messages.
 
4. Look beyond the category.
The category taps into larger ideas shaping people’s experience, including the changing ideals of masculinity, femininity and gender. These influences, and how brands respond to them, will shape future brand success.