Opinion / The Beautiful and the Damned
Are upstart beauty brands leading the way in embracing the Third Age of Consumption, asks Contagious’ Head of Trends, Katrina Dodd?
Last week, Kantar Futures’ J. Walker Smith and Andrew Curry wrote on our blog about the Third Age of Consumption, spelling out some of the key capabilities of companies built to thrive in the emerging business landscape. One of the points that particularly caught my eye was this: ‘Fast-following and flexibility matter more now than experience and familiarity.’
Nowhere is that more evident right now than in the ultra-dynamic Beauty category. For years the preserve of long-established brand behemoths, disruptive new players are taking advantage of their own lack of legacy baggage to align with the values and behaviour of their target audience and capture their own share of an industry expected to be worth $461bn by 2018, according to Research & Markets.
Best Face Forward
Over the past few years the rise of visual culture, evidenced by an entire generation’s embrace of the selfie, has created an unprecedented focus on the face. At the same time, it has also created a new generation of beauty experts who have rapidly superseded brands as the go-to authorities on the full spectrum of cosmetics and skincare available.
To understand just how thoroughly the market has changed for incumbents over the past few years, consider this: video advertising experts Pixability reported that YouTube tracked 5 billion views of beauty-related videos in the month of June, 2016. But an eye-opening 97.4% of the conversation and social media buzz surrounding beauty brands on that platform was generated not by brands, but by beauty vloggers and other independent content creators.
By contrast, 81% of the views that did take place on brand-owned channels were paid views driven by YouTube’s TrueView ad platform.
The impact of this thriving vlogger community says a lot about the qualities that their audience increasingly seeks out in beauty content, in beauty brands and in the products themselves.
The relentless appetite for tutorials indicates an ongoing need for guidance on how best to use the bewildering array of products on the market. Vloggers also provide validation, helping to separate the must-haves from the meh, and making it easier for their viewers to spend wisely. They stay up to date, publishing new tutorials breaking down the latest looks. They’re aspirational figures, but unlike the pop stars, actors and models that often sign on as ambassadors for brands, the inspiration they provide is more relatable and attainable. And while vloggers are clearly influencers, they’re regarded as more independent and honest and accessible than celebrity ambassadors under contract to a specific brand.
The new brands thriving in this intensely competitive sector are embracing those same factors – validation, trust, transparency, responsiveness and relevance – to devastating effect. Here are three of my favourites:
ColourPop / This born-on-Instagram brand is basically the Zara of the cosmetics world. While the Spanish apparel retailer is considered the embodiment of the term ‘fast fashion’, ColourPop is powered by the same vertically-integrated approach. Its parent company, Seed Beauty, has the capacity to get a new product from inception to fulfillment in 27 hours flat. This agility combined with a ninja-like aptitude for influencer marketing on Instagram makes it insanely responsive to the evolving needs and obsessions of its young customer base. ‘We’re not coming at this from a top-down approach,’ says company president Laura Nelson. ‘It’s not a personality-driven brand; it’s not a makeup-artist brand. We want to listen to our fans more than we want them to listen to us.’ In his latest ‘No Mercy / No Malice’ newsletter, Professor Scott Galloway suggested that ‘the ability to respond to signals (fashion shows, Google search patterns, Instagram engagement) and the capacity to translate those signals into product that gets into the channel fast (intelligence) is the strongest signal of a firm's revenue growth.’ By that measure, ColourPop is one to watch: making things people want rather than making people want things.
The Ordinary / The latest launch from disruptive skincare specialists DECIEM, The Ordinary is a line of functional skincare products and foundations built around the promise of transparency. Company founder Brandon Truaxe has a background in computer science rather than cosmetics, and sees much of the luxury beauty sector as ‘a scam’. Consequently, The Ordinary offers total clarity on the active ingredients used in each product, with a no-frills approach to branding and packaging... Tellingly, most of the products in this range cost from £5-£15: it turns out, you see, that even the industry’s most effective substances are surprisingly cheap to produce. As Truaxe puts it, ‘there is nothing luxurious or educated about overpaying for a commodity.’ The Ordinary’s launch is timely when you consider that not only are people better-informed about the products they buy, they’re also increasingly likely to search for products by benefit and ingredients rather than by brand alone.
Beauty Pie / Launched late last year, this membership-only online makeup brand sells premium beauty products at factory cost… Different levels of Beauty Pie membership can be purchased, allowing each user to buy products up to a certain value – with no mark-up. Like Amazon prime, the membership fee encourages customers to do more of their buying through the Beauty Pie platform, as it maximises the value they get from their membership. ‘Our biggest hurdle is getting women to understand how little a part of the cost of a standard luxury skincare or cosmetic product is actually ‘the product’. And that 90 per cent of what they’re paying for is what we at Beauty Pie jauntily refer to as LMAO (Landfill Marketing and Overheads).’ Welcome to the new reality, where your immediate competitors can legitimately make fun of your business model – and thrive by encouraging their customers to share the joke. When ‘experience and familiarity’ are as likely to breed contempt as to build your brand, it’s time to move on, and ideally move fast.
The transparency ushered in by the internet and social web makes it easy to see through the mystique of brands to the less magical realities of the businesses behind them.
The smartest companies are using this increased visibility as an opportunity to get closer to consumers, listening to their feedback and taking cues from their comments and behaviour to guide and validate their decision-making. While this might be harder for legacy brands to embed into their typically top-down, command and control approach, some established players are making it work: Benefit, in particular, has eschewed traditional marketing in favour of sharpening its social skills.
And the point of course, is not to get hung up on what’s going on in the Beauty category: it’s about taking the time to look around and think ‘What’s next?’