Let’s plunge together into the beauty industry!

Beauty has been a core-focus of every population for ages, and so cosmetics surround us. And it won’t be a surprise to underline the special place taken by make up and skin cares in this industry –with 38,3% of market share of the whole beauty industry[1]-, as we do all give importance the way we look and we want to take care of our skin to be nice looking as long as possible. Beauty standards and rituals, but also the trends vary all over the world even though their fame may have gone global. Who has never got lost on the Internet looking for an ancestral ritual from the other side of the world that would clear and protect your skin to make it look as a baby skin? But as for companies, it is another story. Indeed, their brand strategic concerns are really different from a region to another and there are many things to take into consideration before going abroad such as the culture differences, the beauty standards, consumers’ expectations etc and then, adapt their positioning according to the target market.

Led by some global players such as L’Oréal, Estée Lauder or Shisheido, the cosmetics industry has expended steadily all over the world over the last past years, driven by three main regions: Asia and Pacific (with 36,5% market share), North America (24%) and Western Europe (20,2%).[2] Indeed, it is important to underline the great role that has taken Asia in this industry over the last past years, becoming a great player and especially thanks to Korean products whose brands are getting more and more famous and demanded all over the world. Who could have guessed that?

The cosmetics industry is highly involved in product development and represents a really innovative sector driven by high investments in R&D, but also by us, the consumers. Indeed, your favourite brands are listening to you! Have you never wished that your lipstick could really support a party eating and drinking all night long? They’ve exhausted your wish! “If only my sun care product could tell me when to reapply it”… And guess what? They are working on it! [3]

It is important to understand the different forces that are driving this industry such as changing lifestyles, increase of the mass market access in developing countries, rising need for skin care products to do rising pollution, advanced in beauty treatments, the importance of making packaging more attractive for brands to differentiate themselves from the competition, the rising awareness of environmental issue and so on. [4] All these factors influence companies’ strategies, the way they communicate, but also the brand image they build around their product.

And in relation to that, we have identified three main strategies in 2015: the rising importance of digital communications in cosmetics, the rise of the middle classes in the New Markets but also and we’d like to insist on that point: the increasing awareness towards environmental concerns that imply people to care more and more about the products’ origin and production process.

 As brand experts, we have identify four main products segments:

  • Mass market lead by brands as L’Oréal, Mac or Benefit
  • Luxury brands such as Yves Saint Laurent and Chanel
  • Environmental friendly brands such as Lush, Absolution, Caudalie
  • And last but not least brands offering dermatological products as La Roche-Posay, Vichy, Normaderm and others do.

And the objective remains always the same, whatever the category is: to make you believe that their brand is much better than others. And believe us, they make all their energy in it!

Indeed, in a highly competitive market it is important to see how brands differentiate themselves from the competitors by studying their different concerns. It seems obvious that packaging would be different among the different segment we’ve defined but how the standards were established for luxury brands for instance, or why are all the brands focusing on the same channels? And why are endorsement strategies so used in cosmetics’ communications? What kind of emotional insights are used to make people feel closer to a brand or more involved in the purchase process?

But beside all these points, it is important to underline that brand equity and brand personality are deeply relative and they need to be well adapted to the different brands’ context.

Dare to be disruptive, breaking rules is trendy!

And indeed, some brands are emerging on the cosmetics market with totally new business models that create a new form of competition such as Birchbox[5] and My Little Box, which are targeting young generation and that have been the pioneers of a new generation of cosmetics products as so many other box brands have appeared since.

 On the other hand, digitalization has reshaped the whole business environment, and cosmetics brands didn’t escape this phenomenon, as they are getting more and more present on social networks, enjoying the wide range of possibilities offered by these interactive platforms. Instagram, Snapchat, Pinterest, blogs… Good ways to convey the message you want to pass in a creative way. And they otherwise represent other advantages for brands such as through the new influencers that have appeared such as bloggers and Youtubers that in a way make free advertising by recommending your products; but that also may be very tricky if you receive negative comments. Marketing and Advertising represent the most important part of the budget of cosmetics companies as consumers are highly influenced by people. Let’s take a look at the endorsement strategy that has been used for ages in this industry: 15% of consumers affirm that celebrities influence their purchase decision.[6] Indeed celebrities are present in almost every communication campaigns to create a buzz around a product and are used for the perceived value of a brand as they represent certain standards of living and values to which brands want to be assimilated.

In the fast changing world we are living in, everything can change so fast and it is important to remain aware of the business environment change and to keep forecasting what could happen next in order to remain in the race. We may ask ourselves what would be the future of companies’ brand strategies regarding for instance either experiential technologies or the tomorrow’s codes of beauty.

Your devoted powder chaser, Camille.

[1] https://www.franchisehelp.com/industry-reports/beauty-industry-report/

[2] L’Oréal website (2016). Annual Report: cosmetics market, L’Oreal Finance. ONLINE. Available at: http://www.loreal-finance.com/en/annual-report-2015/cosmetics-market. Last accessed: 10 Nov’16.

[3] Anonymous. Innovation and future trends in the cosmetics industry, Cosmetics Europe. ONLINE. Available at: https://www.cosmeticseurope.eu/cosmetics-industry/innovation-and-future-trends-cosmetics-industry/. Last accessed: 10 Nov’16.

[4] Rajput N. (2016). Cosmetics Market by Category and by Distribution Channel – Global Analysis and Industry Forecast, 2014-2022. ONLINE. Available at: https://www.alliedmarketresearch.com/cosmetics-market. Last Accessed: 10 Nov’16.

[5] Drell L. (2011). Beauty Delivered: How Birchbox is disrupting the cosmetics industry, Mashable. ONLINE. Available at: http://mashable.com/2011/08/16/birchbox-katia-beauchamp-interview/#aPCAlzO5ikqo. Last Accessed: 10 Nov’16.

[6] Tyrimou N. (2015). Youtube Bloggers and Celebrities in Beauty: powerful advertising tool or competition, Euromonitor International. ONLINE. Available at: http://blog.euromonitor.com/2015/09/youtube-bloggers-and-celebrities-in-beauty-powerful-advertising-tool-or-competition.html. Last Accessed: 10 Nov’16.

Featured image:
Samuelco. (2015). Sephora: 5 produits d’été indispensables à shopper, Olibe. ONLINE. Available at: http://www.olibe.fr/actualite/beaute/sephora-5-produits-d%C3%A9t%C3%A9-indispensables-%C3%A0-shopper.html  Last Accessed 22 Nov’16.


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