Brand value increases
despite disruptive trends
E-commerce, changing attitudes influence shopping
The personal care category increased 8 percent in value, compared with a rise of only 1 percent a year ago. The four brands that rose significantly—over 20 percent—responded well to ongoing category disruptions, especially from e-commerce, where the low barrier to entry facilitated the appearance of small brands, often from Asia, with convincing stories about safe and effective products at a good price.
Referred to as the “Amazon Effect,” this disruption occurred also in the aisles of brick and mortar stores where shoppers equipped with mobile devices sometimes received coupons and other notifications to influence the purchase decision at the shelf. Social media inspired conversations that enabled new brands to build awareness with little marketing investment, and beautiful and accessible photography drew personal care browsers to Instagram.
Brands contended with these other disruptions, too: changing shopping habits, with consumers making more trips but putting less into their baskets; discounting, and the appeal of lower-price private label products; and direct-to-consumer distribution models, like subscription, that challenged traditional brands and disintermediated retailers.
Social media, particularly micro bloggers, became a source for gaining consumer insights.
However, in a category divided between older, more traditional consumers and the younger generation, where power has shifted to consumers and away from manufacturers and retailers, brands sometimes lacked a comprehensive, data-informed understanding of exactly how consumers shopped online and offline.
At the same time, changing personal values and time constraints influenced consumer attitudes toward personal care. With evolving ideas of beauty and the rise of naturalness as an ideal, people simplified their personal care regimes and used fewer products. Time-compressed lives, and a rise in people working from home, contributed to this trend.
Simplification and personalization
Women gravitated to products with multiple functions, even in Asia, where consumers traditionally follow daily multi-step beauty regimes. Both men and women used products to enhance—rather than alter—their natural appearance. Although men shaved less, they used more moisturizer, for example.
The simplification trend was in tension with the personalization trend. Consumers seem to simplify in some instances and personalize in others, usually those associated with beauty. The ultimate personalization was the development of ingredients based on genetic science. Some of the newest personal care brands did not refer to gender, as notions of gender fluidity led to product fluidity.
At the same time, new niche brands, in hair care, for example, rapidly introduced product variations, adopting the constant renewal ethos of the fast fashion. Other personal care products imitated the superfoods trend with fashionable ingredients like coconut oil. In the midst of this constant change, brand loyalty was fragile. Consumers depended on a brand repertoire and bought the sale-priced brand, as a Tinder mentality afflicted retail.
In China, niche brands, often from Korea and Japan, pressured the major brands because they are easily available online, from Alibaba or JD.com, for example. Young consumers view these brands as innovative and they create social media buzz about them, influencing older consumers.
To meet the changing expectations of consumers, and counter the impact of small disruptor brands, the large personal care companies are introducing their own versions of smaller, more nimble brands. Unilever introduced Love Beauty and Planet, a brand positioned as natural and ethical, and ApotheCARE, a more premium, natural and sensorial brand. P&G bought Native, a premium-priced natural ingredient deodorant marketed direct-to-consumer.
Technology and communication
Brands that increased most in value responded effectively to the category trends and disruptions. Shiseido, which led the personal care brands in value rise, improving 42 percent, benefited from its functional excellence. Shiseido acquired beauty a startup called MatchCo, to expand the possibilities of digital customization of makeup using a mobile device. The technology matches the users skin and recommends the appropriate makeup.
Japanese provenance underpinned Shiseido’s reputation for technology and proven functionality, and its ability to combine premiumization with scale. In Japan, the brand planned to focus on skin care products, and in China it emphasized its digital strategy and brand prestige. Shiseido launched a three-year plan to become one of the top three global prestige cosmetic brands.
Estée Lauder also did well in Asia, particularly China, where it is available in 117 cities. The brand experienced a rebound in skincare, and also benefited from the changing desires of Chinese customers who are purchasing more makeup and fragrance. Its use of technology included an augmented reality (AR) mirror in some stores, and its social media activity helped draw more young people to the brand with online influencers hosting how-to videos.
Strong appeal to young people and growth in China drove strong sales results for Lancôme. In a collaboration with the digital company YouCam Makeup, Lancôme hosted live-streaming, AR makeup demonstrations in the run-up to Halloween, which leveraged the increasing use of extensive makeup use during the fall holiday. Lancôme launched an elaborate philanthropic effort called the “Write Her Future” campaign, in which the brand’s ambassadors, including actors Penélope Cruz, Julia Roberts, and Kay Winslet, participate in a social media campaign to fight illiteracy among women.
Clinique personalized communication and connected well with younger customers, emphasizing the purity of its ingredients. In an innovative marketing event, Clinique organized a catwalk presentation on the Champs-Élysées in Paris. Clinique compared the skin care routine with the oral care routine, attempting to change behavior and increase frequency. Adapting to changing consumer habits, the brand also marketed its line of make-up designed to remain intact during workouts.
Changing views of beauty
L’Oreal accelerated its investment in digital, with the acquisition of AR provider ModiFace, which will serve L’Oreal Paris and its sister brands. L’Oréal Paris repositioned its hair care products in the US as remedies for hair damaged by curling irons and other styling processes. Actor Wynona Ryder introduced the campaign in an ad aired during the Golden Globes. The brand did well in Asia, despite the competition from local brands. L’Oreal Paris continues to innovate and use social media effectively. It benefited from growing popularity of masks with its recent launch of Pure Clay Masks.
In an effort to more effectively reach young people, Olay participated in a new partnership with two magazines, Cosmopolitan and Seventeen, and Amazon. Some of the editorial is accompanied by QR codes that link to additional content and purchase options. Also appealing to young consumers, the mass brand Garnier launched a campaign for recycling beauty products. Social media influencer Remi Cruz is the spokesperson for the campaign, called Rinse, Recycle, Repeat.
Dove continued to refresh its view on real beauty by connecting to culturally resonant issues around femininity and masculinity. In the UK, it launched the Self Esteem Project, with online tools to help girls feel confident in their own skin. The #RealBeauty Pledge campaign continued with women at all stages of life talking about their idea of beauty. The brand introduced Baby Dove in the US, Canada, and the UK. And to the support the effort, Dove aimed to alter incorrect stereotypes of motherhood with a YouTube campaign called #RealMoms.
Pantene introduced a premium hair product using micellar technology, which removes impurities. And it promoted its line of shampoo for African-American hair, emphasizing its beauty and multiplicity of styles, with the tagline, “Strong is Beautiful.” Head & Shoulders introduced a packaging innovation to meet consumer environmental concerns, with a bottle made from recycled beach plastic. The brand selected US skier Gus Kenworthy as a brand ambassador whose strength of character enabled him to reach the Pyeongchang Winter Olympics as an openly gay athlete personifying the brand’s “Shoulders of Greatness” campaign.
New products, programs
With the introduction of its Nivea Urban Skin Range, the skincare brand, owned by Beiersdorf, a German company, continued to innovate and extend the specialized products it offers for specific needs. The urban range, formulated to counter the effects of pollution, reflects consumer interest in quality ingredients. In line with other trends, Niva introduced an app with Google, and the brand derived 25 percent of its China sales from its e-commerce relationships with Alibaba and JD.com.
The oral hygiene sector faced continued pricing pressure, especially in developed markets. Brands drove growth with new products. Introductions in North America, included new toothpastes like Colgate Clean-in-Between, with a foaming agent for cleansing spaces between teeth, and Crest Gum Detoxify with a foam that cleans below the gum line. Colgate introduced a toothpaste with ayurvedic ingredients in India.
Gillette added a subscription model, called “Gillette on Demand,” with blades also available by texting. The brand also revised its advertising to shift from shaving to grooming, leaving room for the popular stubble look. The brand has been at the eye of the storm of disruptors, including the advent of subscription model; simplification of personal care regimes, with men shaving less; and changes in attitudes toward masculinity. Ultimately, a brand known for blade innovation, asked how much innovation does a man need, and how much is he willing to pay for it?