Beautiful disruption: the Insta-brands driving the beauty business
You don’t need me to tell you beauty is big business. My own bathroom cabinet is bulging with magic that keeps me moving but, for the core beauty consumer, mostly female, it’s truly a multi-billion dollar industry with incredible innovation and some smart marketing that drives it ever onwards. Not only that - a less personal indicator is the visibility of the sector in the agenda at the Palais next week at Cannes Lions.
The global beauty industry is worth more than $250bn according to Euromonitor. Historically, large legacy brands have dominated. But like many other industries, ‘born digital’ brands have experienced the fastest growth, and are now disrupting segments across the beauty spectrum.
According to McKinsey, these upstarts are almost all single-brand beauty companies with a focus on conscious consumerism – meaningful brands as we like to think of them at Havas. Natural or organic ingredients are one of the biggest industry trends as consumers increasingly want to know what’s inside; diversity in every sense is another key component of appeal.
The major beauty players often see these upstarts as challenger brands but that would be to underestimate their impact. These are disruptor brands. They are changing the game forever through digital content and the buying public are responding. Double digit growth is coming from these new players who understand the power of ‘insta-marketing’.
E-commerce is a major force for beauty as direct to consumer brands harness the power of social and other digital platforms. But it’s the duality of e-comm and ex-comm – experiential marketing – that is really allowing communities to swarm around brands. Gatherings like BeautyCon allow groups to get together, share techniques and new looks – and generate content that adds to the volume of chatter and buzz.
Beauty disruptors encourage people to experiment across a wide range of different brands from mass to prestige which is challenging the traditional price mechanics and customer segmentation within the category too.
The color-cosmetics category particularly appeals to the vlogger generation, due to its visual nature, fueling a burgeoning demand for make-up tutorials.
This is where disruptors dominate in making connections at scale.
Take UK beauty and skincare brand Charlotte Tilbury as an example. Charlotte Tilbury has 256 videos currently on YouTube and 574,828 subscribers.
By comparison, L’Oréal Paris UK & Ireland’s official YouTube channel has 660 videos but only 45,290 subscribers. Personality power, authenticity and novelty combine to disrupt and empower a new brand to succeed.
It’s not just YouTube either. Beauty brand disruptors are achieving connections at scale across all social channels, supported by micro influencers (with between 10,000 to 100,000 followers), influencers (over 100,000 followers), and a generation of shoppers who seek out brands that are authentic and relevant to them.
One of the new brands everyone is watching in the USA right now is Glossier – not only has this team built a great looking brand and retail experience that excites the next generation of mega-shoppers, they’re responsive to customer feedback, literally adapting product lines and creating towards consumer demand.
The market leading beauty companies may have been monitoring these disruptors but because their market dominance is far from being challenged, it’s only now that they’ve understood the relevance of this tidal shift. In response, some have gone on the acquisition trail, looking to buy up promising start-ups with digital expertise while others have focused enhanced resources on digital and influencer marketing.
With disruptor strategies appealing so widely to the beauty-buying public, leaders in the sector need to move fast too, be open to new kinds of distribution and more agility in their communication plans. But perhaps most important of all, major players have authenticity themselves – from Revlon to L’Oreal, P&G to Estee Lauder – these are businesses with incredible expertise and heritage.
Today’s consumers look for authenticity – these brands have it in spades and can use it to their advantage if they pivot to create more meaningful ways to connect with new consumers.
Greg James is the global chief strategy officer, Havas Group Media.