Cultural forces shape products and marketing
Need to personalize complicates brand offerings
Increased expectations for personalized products complicated the personal care category’s response to major cultural forces, including concerns about health and wellness, sustainability, and inclusivity. Particularly in the West, women rejected idealized notions of beauty in favor of expressions of individuality that varied by occasion.
Opting for speed over pampering, many women with busy lives adopted simplified regimens to enhance natural beauty and radiate healthiness. Multi-functional products reduced time and effort but also provided a level of personalization, particularly in skincare. Others with busy lives, often women of color, continued to devote significant time to their beauty regimes.
Concerned with wellness and sustainability, consumers scrutinized labels for assurance of vegan and cruelty-free ingredients. Products needed to be “woke,” but they also needed to work. Brands emphasized technological innovations that improved efficacy.
While upstart brands continued to challenge category leaders, major brands featured more direct-to-consumer options. They also introduced packaging and product formulations to protect the environment, and they expanded the notion of inclusivity to embrace a non-binary view of gender.
The pace of category growth slowed with the Covid-19 shutdown of retailers and beauty salons, and the quarantine of people at home. Demand persisted, however, partly because of the need to keep up appearances during online meetings, and the e-commerce proportion of purchasing increased. The personal care category rose 4 percent in value compared with 2 percent a year ago.
To improve the sustainability of their products and packaging, brands introduced more waterless products, including face wash and shampoo bars packed in recyclable paper. Waterless products appealed to consumers not only because of their ease on the environment, but because they last longer and are easier for travel. In a process called compaction, brands provided products in smaller bottles by reducing the amount of water in the formulation.
Holland & Barrett, a UK specialty store, developed a return-refill-reuse scheme for personal care products, using a mail subscription service called Beauty Kitchen that operates refill stations in physical stores, including at least one at a Boots London location. Mass market refill programs were expected to expand.
At EuroShop 2020, the retail industry exhibition devoted to retail store fittings, the expanded presence of sustainability-related products included machines for refilling bottles of shampoo, shower gel, and other personal care liquids. Upcycling—reusing a plastic bottle for another purpose, as a vase, for example—also became an emerging trend.
Unilever reported that the 28 brands in its portfolio that are most advanced in meeting corporate sustainability goals, which include Dove, grew 69 percent faster than the rest of the business and produced 75 percent of company growth.
Because personal care products are typically used in the bathroom, they are usually not near a home’s recycling bin, which makes recycling inconvenient. The consumer’s desire for convenience and time-saving options in part drove the rise of the direct-to-consumer trend, which crossed categories, and has been a factor in personal care for at least a decade since the introduction of Birchbox, the subscription service that delivers a selection of personal care products every month.
Recently, the direct-to-consumer trend shifted from a strategy introduced by start-ups to compete with the retail distribution of established brands, to an approach adopted by major brands that acquired start-ups to learn from their experience, improve service to customers, and gain more customer data.
P&G acquired Billie, the subscription-based women’s shaving products and body lotion brand, and Colgate acquired Hello Products, a subscription-based oral care brand devoted to natural ingredients and packaging. At the same time, Edgewell Personal Care, owner of Wilkinson Sword and Schick, decided to not acquire Harry’s, the subscription-based shaving brand, after the US Federal Trade Commission ruled against the deal.
Dollar Shave Club, which was started in 2011 and bought by Unilever five years later, illustrates the power of insights D2C brands can derive from the data they collect. To offset business lost because men are shaving less often, Dollar Shave Club introduced a wide range of grooming products.
Brands heard from consumers in other innovative ways. Launched in France several years ago, an app called Yuka scans personal care and food products, rates them according to the healthiness of their ingredients and, when necessary, recommends healthier alternatives.
Brands introduced innovations to meet the consumer desire for more personalized, sustainable, and healthy products. Clinique ID offered a system that reduces the range of its moisturizer sku’s, while also expanding the possibility of customization. Customers select base moisturizers and then add the capsule of a concentrated formula that matches their personal skincare need.
L’Oréal introduced the Perso, an AI device that links skin needs and local air quality to dispense a customized portion of facial cream. A hand-held device called Opte, introduced by P&G, scans and analyzes skin for age spots and other discoloration, and then dispenses a customized serum for covering and fading. It also collects data for the user and manufacturer to track changes.
The connected electric toothbrushes of Oral-B collect data with a smartphone app that tracks brushing technique and thoroughness to help consumers improve oral health care. The data enriches the brand’s knowledge of consumer brushing behavior. The Colgate connected toothbrush works with an Apple app and is sold in the Apple store.
In a technological initiative that addressed consumer concern about wellness and sustainability, Colgate in Europe launched a brand called Smile for Good that not only listed the ingredients, but also the function of each ingredient. Colgate developed a recyclable toothpaste tube and open-sourced the technology.
Pantene collects personal data with a Hair Advisor questionnaire that assess hair care needs before recommending the most appropriate product. Samsung has a device called LUMINI that analyzes the user’s face and recommends the appropriate skincare products. The Korean beauty brand SK II introduced pop-up stores using AI-empowered mirrors and robots to assess customer skin care needs and recommend products.
Given the multiplicity of forces shaping the personal care category, the challenge for brands is to first hit all the right notes—being natural, sustainable, and an advocate for a vision of beauty that emanates from within—and then to market that appeal effectively.
Glassier, barely five-years old, has become a sensation among young women by delivering these qualities exclusively online except for a few experiential stores or pop-ups. Having expanded the notion of beauty over 15 years ago with its Real Beauty campaign, Dove is reclaiming that space with a campaigned called “Show Us,” which argues that media perpetuates idealized versions of female beauty.
Brands often are popularized by online influencers. The founder of Glassier herself was an online influencer before she developed her own brand. Micro influencers, people focused on a narrow niche, have particular appeal. Although younger women are the primary audience for online influencers, one of the best-known Instagram celebrities is 90-year-old Baddie Winkle who launched a line in cooperation with INC.redible Cosmetics and Sephora.
Meanwhile, some of the sustainability initiatives, especially the reduction of packaging, presented challenges for brands. Reduced packaging limits the space available for brand marketing communications, which is critical for retail shelf presence.
Asian and own-label brands
In an effort to win back some of the personal care business that diverted to Sephora or Amazon, mass merchants worldwide reassessed their personal care offerings. The online availability of lower-priced but high performing personal care products, often from Asia, opened the possibility for other challengers, such as the own-label, value-priced Lacura range of beauty and personal care brands from the Germany-based food discounter Aldi.
In the US, retailers offer own-label brands at a range price point segments. Target offers its Smartly, Up and Up, and Marlowe brands. With is Cleen Beauty brand, Wal-Mart tried to tick all the beauty product boxes about natural ingredients and inclusivity and add one more—affordability, with products priced under $10.
Some of the trend-setting brands come from Asia, such as the Korean Glow Recipe, or are influenced by Asian beauty regimes. Tatcha, a Japanese American creation, was recently acquired by Unilever. Similarly, Unilever purchased the popular start-up IT Cosmetics several years ago. Unilever also bid for Drunk Elephant, another Sephora best-selling brand that ultimately was purchased by Shiseido.
Asia has not only been the origin for many beauty trends, it is also a key market for many of the multinational brands. L’Oréal Paris, Lancôme, Garnier, and Estée Lauder enjoyed strong sales in China, particularly from accessible luxury. Skincare and makeup revenue in China increased 11 percent and 12 percent, respectively, during 2019, according to Kantar Worldpanel. While demand in China declined during the peak of the pandemic, it rebounded quickly as the country recovered.
Keeping up appearances,
people purchase online
The effect of the Covid-19 pandemic on personal care varied by sub-category, which range from grooming essentials to luxury makeup and fragrance. Closure of department and specialty stores along with beauty salons depressed overall sales, although the proportion of online purchasing increased with people quarantined at home. Hand soap and hair coloring experienced strong demand. Because of virtual meetings using Zoom or other technology, personal appearance remained important, at least from the neck up. In contrast, the use of protective masks that concealed the lower part of the face softened demand for lipstick, while sales remained relatively strong for eyeliner and related products, according to some reports. A relaxed at-home attitude produced a new term in men’s grooming—corona-beard. In China, first in and first out of the pandemic, luxury brands experienced a surge in demand as the country reopened.
Brand Building Action Points
- Meet multiple needs
Some people are looking for products that make them feel good about themselves with minimal effort. Others are willing to put in the time to create an influencer-inspired style. In both instances, the product that excites the customer will be the one that responds to individual needs, respects the environment, and works well.
- Recognize cultural shifts
Recognize not only individual behaviors, but also the larger cultural shifts behind those behaviors that may influence an entire category. If women color their hair less, for example, it may signal a shift in attitudes about aging or natural appearance. Consider how those changing attitudes will open opportunities for new products and services.
- Simplify choice
Consumers are engaged in the personal care category, but perhaps not with the same level of engagement as in the past. Retail shelves filled with product choice are more likely to confuse than inspire consumers who are trying to simplify their lives and have the option of buying online.
- Minimize packaging
Minimize packaging and move away from single-use plastic. These actions benefit both society and business. Consumers have a lot of choice and will reject brands that do not comport with their values. Being sustainable is not a point of difference. It is a point of departure.
- Challenge the challengers
Many personal care challenger brands initially gained the attention of consumers, especially young people, because they publicized the purity of their ingredients and sustainability of their packaging. Established brands have invested heavily to reformulate and repackage their products and reform their supply chains. Those changes enable the established brands to tell stories that challenge the challengers.