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CONTENTS 18
JULY/AUGUST 2017 | VOLUME 185, NUMBER 7
FEATURES 8 The State of Beauty, Q1
How prestige beauty and Amazon’s dominance drove results.
10 Dollar Shave Club, Goop and Dermstore on Beauty Success
How category disruption, content-powered brands and strong buyer strategies can generate growth.
16 These Are 2017’s Most Valuable Brands A ranking based on sales and consumer brand perception.
18 The Future Is Premium
The beauty and personal care forecast through 2021 points to increased premiumization and personalization. BY NICHOLAS MICALLEF
24 Beauty Consumers of Every Age
42
A close-up examination of the habits and attitudes of millennials, Gen Xers and baby boomers; part one of a four-part series. BY DENISE HERICH
30 Influencer Marketing Strategies for Indie, Mass and Luxury Brands
How to drive conversion among the frivolous millennials and tech savvy boomers. BY SOURABH SHARMA AND TRINA ALBUS
36 Indie Beauty’s Authentic Revolution
Indie founders and retail experts on consumers’ thirst for authenticity, the role of founder stories and the market’s desire for uniqueness.
30
BY LAURA ZIV
42 Differentiating Luxury Design
Redefine what luxury means by starting new packaging trends that go against the grain. BY SHERI L. KOETTING
48 Global Skin Care Market
Global and regional market figures and trends.
50 U.S. Skin Care Market
Total market figures and market share by categories and segments.
52 SoCozy’s Hush: Breaking the Cycle
36 2
Contents
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of Sensitivity
Founder Cozy Friedman on what it takes to build a hair care brand for children and babies. Global Cosmetic Industry | July/August 2017
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www
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CONTENTS EDITORIAL
Director Editor in Chief Research Analyst Assistant Editors
Digital/Social Media Editor
Jo-El M. Grossman Jeb Gleason-Allured | 1-630-344-6069/jallured@allured.com Nicole Urbanowicz | 1-630-344-6053/nurbanowicz@allured.com Jennifer Novoseletsky | 1-630-344-6045/jnovoseletsky@allured.com Brooke Schleehauf | 1-630-344-6032/bschleehauf@allured.com Lisa Schryver | 1-630-344-6068/lschryver@allured.com Audrey Latimer | 1-630-344-6067/alatimer@allured.com
ADVERTISING SALES Business Development Manager Kim Jednachowski | 1-630-344-6054/kjednachowski@allured.com Business Development Manager Paige Crist | 1-630-344-6060/pcrist@allured.com Fragrance Coordinator Kasia Smialkowski | 1-630-344-6025/ksmialkowski@allured.com
24
AUDIENCE DEVELOPMENT Marketing Specialist Marie Galvan Marketing Specialist Alyssa Derby Customer Service 1-888-399-0899/customerservice@gcimagazine.com
54 Milk Makeup & Becca Cosmetics: Burning the Playbook
These up-and-coming brands are taking two distinct paths to success.
DEPARTMENTS 6 Spark: How Beauty Upstarts Succeed
DESIGN Graphic Design Manager Senior Graphic Designer Production Manager
Lisa Hede Hon Bannapradist Bryan Crowe
CORPORATE Partner & President Partner & CEO Controller Digital Products Director Executive Assistant
Janet Ludwig George Fox Linda Getner Rose Southard Maria Romero
BY JEB GLEASON-ALLURED
8 Markets & Trends 48 Skin/Sun/Anti-aging 52 Hair 54 Makeup 58 Bath/Body/Grooming/Fragrance
RESOURCES 62 Products & Services Showcase 64 Advertiser Index
Digital Edition Exclusive The State of Beauty Startups Founders, investors and retailers discuss what it takes to succeed and grow. Turn to Page DE1 of your digital July/August edition @GCI_Magazine
facebook.com/gcimagazine
OTHER ALLURED PRODUCTS Allured Business Media 1-630-653-2155 • fax 1-630-653-2192 336 Gundersen Drive, Suite A Carol Stream, IL 60188-2403 USA www.Allured.com
Alluredbooks Cosmetics & Toiletries Bench Reference Cosmetics & Toiletries magazine Cosmetics & Toiletries magazine: Portuguese edition Cosmetics & Toiletries Summit Skin Inc. magazine Face & Body Midwest spa expo and conference Face & Body Northern California spa expo and conference Face & Body Southeast spa expo and conference Perfumer & Flavorist magazine World Perfumery Congress Flavorcon
Subscriptions: Subscribe online: www.GCImagazine.com/subscribe In the US, telephone: 1-888-399-0899, Outside the US, telephone: 1-847-559-7557 (9 AM–5 PM Central, Mon-Fri) | Fax: 1-847-291-4816 E-mail: customerservice@gcimagazine.com Print subscriptions: Available free to qualified individuals located in the United States. All other countries may subscribe to the digital edition. Periodicals Postage paid at Carol Stream, Illinois, and additional mailing offices. Change of address: Give both the new and old addresses. Allow two months for a change to become effective. Global Cosmetic Industry (ISSN 1523-9470) is published eleven times per year as Jan., Feb., March, April, May, June, July/Aug., Sept., Oct., Nov. and Dec. issues by Allured Business Media, 336 Gundersen Drive, Suite A, Carol Stream IL 60188-2403 USA. Copyright 2017. Free subscriptions to Global Cosmetic Industry are available to qualified individuals. The publisher reserves the right to determine qualification of free subscriptions. Replacement issues are available only through single copy sales. Single copies: $20; GCI Directory Issue: $35 (Add $10 per order shipped to Canada; add $15 per order to all other countries.) Periodicals postage paid at Carol Stream IL 60188 and additional mailing offices. POSTMASTER: Please send address changes to Global Cosmetic Industry, PO Box 3009, Northbrook, IL 60065-3009. Change of address: Give both the new and old addresses. Allow two months for a change to become effective.
Members of the American Business Media. All correspondence regarding business, editorial, advertising and production should be sent to Global Cosmetic Industry, 336 Gundersen Drive, Suite A, Carol Stream, IL 60188-2403 USA. Allured Business Media makes all attempts to publish accurate information; however, this publication may contain technical inaccuracies or typographical errors. The reader assumes all risks concerning the suitability and accuracy of the information within this publication. Allured Business Media assumes no responsibility for and disclaims all liability for any such inaccuracies, errors or omissions in this publication and in other documents referred to within or affiliated with this publication. www.GCImagazine.com
4 Contents Global Cosmetic Industry | July/August 2017
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SPARK
| BY JEB GLEASON-ALLURED
How Beauty Upstarts Succeed
I JEB GLEASON-ALLURED Editor in Chief jallured@allured.com @GCI_Magazine
GLOBAL COSMETIC INDUSTRY MAGAZINE EDITORIAL ADVISORY BOARD ALISA MARIE BEYER Coastal Salt & Soul
MARIE ALICE DIBON Alice Communications, Inc.
JESSICA ESTRADA Hue For Every Man
FADI MOURAD Dollar Shave Club
ADA POLLA Alchimie Forever, The Polla Beauty Group
ART RICH, Ph.D. A. Rich Development
RICK RUFFOLO R4 Innovations
CRISTINA SAMUELS Mode Cosmetics
LAURA SETZFAND Epiphany
recently had the pleasure of listening to a day of talks from Howard Murad (founder of Murad), M.D., Bobbi Brown (the eponymous founder and former head of the legendary beauty brand) and Carrie Gross (CEO and co-founder of Dr. Dennis Gross Skincare) regarding life as a beauty startup. Each founder launched his or Bobbi Brown founded her namesake beauty brand her business in a different decade, but in 1992 and helmed it for more than two decades. retained lessons that still resonate today. This month’s digital exclusive, “The State of Beauty Startups,” delivers expertise from investors, founders and retailers about what it takes to succeed as an emerging brand in 2017, including: • Founders: A strong founder story creates excitement among investors, retailers and consumers, and gives brands a distinct point of difference among the competition. • Digital & direct: The internet and social media have lowered the barrier to entry for distribution and marketing in the beauty industry, giving even the smallest brands a direct connection to consumers. • Speed-to-market: Indie brands can launch products in as little as six months, compared to the lengthier process at top multinationals, which may require as much as three years to introduce new products. • Beyond the hero: Brands must have a strong concept that can expand and evolve beyond a single product in order to sustain growth and avoid fading away. • Money: While financing is obvious, many new brands underestimate how much capital they’ll burn through. Failure to properly calculate can sink even the most innovative brands.
New Faces on the Board I’m delighted to welcome two new additions to our advisory board: Jessica Estrada, co-founder of Hue For Every Man, and Fadi Mourad, chief innovation officer, Dollar Shave Club. Estrada has more than 25 years in the fashion industry and after noticing a lack of high-end men’s grooming products geared toward a polyculture market, she left the apparel industry to focus on men’s grooming. Working as a freelance brand strategist, she has helped more than 20 apparel startups gain more than $50 million in new business. Mourad’s role at Dollar Shave Club includes overseeing product development, package development, regulatory and R&D, while also expanding the product portfolio and bringing product concepts to life. His past experience includes time as a chemist at Bath & Body Works, overseeing the development of Lab Series Skincare for Men at Estée Lauder and fragrance brands Aramis, Tommy Hilfiger, Kiton and Sean Jean. Most recently he acted as vice president of product development and innovation for Bumble and bumble. Estrada and Mourad will have a hand in shaping Global Cosmetic Industry’s READ THE DIGITAL content and mission, and we’re so excited EXCLUSIVE: “THE STATE to begin collaborating. OF BEAUTY STARTUPS.” Turn to Page DE1 of your digital I hope you enjoy this month’s issue. July/August edition. See you in September. Available to subscribers, only.
6 Spark Global Cosmetic Industry | July/August 2017
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CONSUMER GOODS
LEND GLAMOUR T O D A I LY L I F E
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MARKETS & TRENDS The State of Beauty, Q1
A
ccording to a report from NPD (www.npd.com), U.S. prestige beauty product sales totaled $4.0 billion in the first quarter of 2017, representing a 4% increase from the same period, 2016. Prestige makeup was the biggest gainer in beauty, with the eye category expanding at the fastest rate. Travelsize makeup product sales rose 47% in the same period. For year-over-year growth totals by segment, see the figures presented below.
Makeup Growth • Total category: 6% (total: $2 billion) • Eye shadow: 14% • Eye brows: 12% • Mascara: 5% • Overall face makeup segment: 20% • Face primers: 18%
Skin/Sun Care Growth • Total category: 5% ($1.4 billion) • Face masks: 47% • Acne treatments: 16% • Body cleansers: 9% • Sunscreen: 11% (total: $17.6 million)
Fragrance Growth • Total category: -1% (total: $684.6 million) • Home scents: 16% (candles, diffusers, room fresheners, potpourri, etc.) • Fine fragrance: 0% “The consumer desire for products that work with them, simplifying their routines and offering instant gratification in both appearance and experience, is the force pushing some of the biggest trends in the beauty industry today,” said Karen Grant, global beauty industry analyst, The NPD Group. “Whether they need a quick hair or makeup fix after the gym, on an airplane, or are looking
Prestige makeup was the biggest gainer in U.S. beauty in the first quarter of 2017.
to create a warm, sensory experience in their home, consumers have made clear their need for immediacy without sacrificing comfort or quality.”
Amazon’s Prominent Role in Beauty Care Growth In the first quarter, overall U.S. health and personal care sales dropped by about 1%, according to new data from One Click Retail (http:// oneclickretail.com/insights/). Most of the drop came in the brick-and-mortar channel, while online sales rose. Want to guess who dominated that growth? Amazon, which now has the largest
online market share in the category. In the first quarter, Amazon owned $1.3 billion of the $80.6 billion U.S. health and personal care market, according to the firm. While the overall segment shrunk by 1%, Amazon grew 30%. In 2016, Amazon’s sales in the segment totaled $4.7 billion, meaning its Q1 2017 results comprise 27.5% of last year’s total. This data is critical for the future of the industry, given that Condè Nast and Goldman Sachs’ “The 2017 Love List Brand Affinity Index” found that Amazon is the second-most popular app with teens and millennials, second only to Snapchat.
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In the first quarter of 2017, Amazon owned $1.3 billion of the $80.6 billion U.S. health and personal care market.
Predictably, sales among Amazon Prime members have greatly outpaced general Amazon shoppers by as much as a factor of 5x. Prime Pantry accounted for 5.5% of health and personal care sales in the first quarter of 2017. Personal care was the top growth category among Amazon Prime shoppers, led by hair care in the United States.
U.S. Personal Care Growth, Amazon • Skin care: 85% • Feet, hand and nails: 200% • Bath and shower: 80% • Body: 70%
U.S. Personal Care Growth, Amazon Prime • Hair care: 85% • Styling products: 160% • Shampoo and conditioner: 75% • Skin care: 125% • Feet, hand and nails: 145% • Bath and shower: 145% • Skin care: 130% • Men’s care: 100% • Personal lubricants: 150% www.GCImagazine.com
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• Personal care: 115% • Bar soap/body wash: 370% • Oral care: 120% • Antiperspirants/deodorants: 90% • Shaving cream/gels: 80%
U.K. Personal Care Growth, Amazon • Shaving and hair removal: 90% • Miscellaneous shaving and hair removal: 180% • Razors and sets: 80% • Skin care: 220% • Feet: 470% • Baby/infant/child: 290% • Personal lubricants: 70%
U.K. Personal Care Growth, Amazon Prime • Bath and shower: 390% • Bathing accessories: 390% • Personal care: 200% • Shaving and hair removal: 160% • Shaving cream and gels: 360% • Razors and sets: 130% • Oral care: 110% • Manual toothbrushes: 160% • Toothpaste/whiteners/mouthwash: 100% n Markets & Trends 9
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BBR15: Dollar Shave Club, Goop and Dermstore on Beauty Success
M
azur Group’s Beauty Biz Roundtable 15 (BBR15), a biannual event featuring talks from industry leaders, recently took place at the Le Méridien Delfina Santa Monica Hotel. The event presented marketing and business insights for attendees who hailed from large, small and emerging brands, including Ipsy, Sephora, Goop, Dollar Shave Club, Dermstore and Sexy Hair Concepts. Below are a selection of highlights.
How Dollar Shave Club Continues to Disrupt Men’s Grooming When Dollar Shave Club (DSC) was acquired by Unilever in June of 2016 for $1 billion in cash, it gave the multinational giant a foothold in men’s grooming and direct-toconsumer subscription services, while simultaneously shaking up the larger shaving and grooming sector. The company was founded in 2011 by Michael Dubin, but the brand really took off when, on March 6, 2012, DSC uploaded a YouTube video entitled “Our Blades Are F***ing Great,” which featured Dubin offering a funny viewpoint on everything that was wrong with the shaving category and how DSC offered a solution. The ad has become a modern classic in viral marketing and has contributed to the brand’s reputation as a category disruptor. The foundational DSC video promised overwhelmed and confused male shoppers that the company wasn’t going to fleece its consumers with overpriced blades, an idea that has forced top competitors to lower their prices and launch their own subscription-based models. Men’s grooming has always been a slow-moving market plagued by consumers who lack confidence
Blair Lawson, head merchant of Goop.
in product differentiation and quality. These consumers have long suffered a lackluster department store, drugstore and big box retail experience, particularly when it came to understanding why one product was better than another, or even why certain grooming products were necessary in the first place. While there’s room for aspirational marketing in male grooming, DSC has shown that truthful, transparent consumer communication can upend existing norms. And, once the male consumer becomes more engaged and educated, it is likely he will begin seeking out increasingly sophisticated products and ingredients. At DSC, it’s all about the member, according to Fadi Mourad, the company’s chief innovation officer, product. DSC has more than 3 million subscribers in the United States alone. Mourad, who has a chemistry background and previously held roles at beauty companies such as Estée Lauder, notes that DSC drives product development based on subscriber feedback generated by surveys and other research.
The company tests out its product concepts with trained expert panels that assess everything from product texture to packaging to the fragrance to the final product. Because DSC is a problem-solution brand, Mourad has little interest in chasing emerging and faddish product claims. Instead, he and his colleagues identify subscribers’ pain points, frustrations and unmet needs. The product development teams then set about creating products that meet all of the subscribers’ requirements. In the brand’s marketing, DSC focuses on problem-solving and clearly explains the purpose of its ingredients. For instance, DSC’s shower line, Wanderer, explains: “Wanderer’s sulfate-free formulas gently cleanse while protecting your skin’s natural moisture.” Mourad says that DSC’s subscribers shower for two reasons: to wake up at the start of a new day or to destress and relax when the day’s over. As a result, DSC crafted the Wanderer range to include an Awakening scent, comprising mint and cedarwood, and a Calming scent, comprising amber and lavender.
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Early product prototypes were shown to DSC’s testers, which yielded the insight that men, whether using the bar soap or body wash format, used a loofah to bathe. The problem? Men tended not to replenish their loofahs and thus were cleaning themselves with bacteria-infested tools. (If you want all the gory details, just read DSC’s original online content, “What Else Are You Sharing When You Share a Loofah?”) As a result, DSC quickly developed a shower tool to accompany the Wanderer series. The result was a loofah that was too small and could not be worn as a glove, which the users preferred. It simply didn’t work. Because of its subscriber and product development models, DSC is able to create and launch products faster and respond to consumer needs and feedback more quickly than its traditional personal care counterparts. DSC’s small team and unified operational guidelines allow it to get products to market in about six months for a relatively low cost and with a greater degree of market confidence. In addition, the subscriber model allows DSC to avoid retailer timelines and constrictions. When things go wrong, as they did with the Wanderer loofah,
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Goop’s contextual commerce has offered readers opportunities to learn about and purchase so-called clean beauty swaps, non-toxic sun tanners and non-toxic deodorants. DSC quickly owns up to the issue and responds with an apology and revamped product. The second iteration of the Wanderer loofah, which was retooled and launched within six weeks, was sent to every customer that had received the lackluster version, free of charge. Mourad noted that the mini crisis built respect and credibility among customers, as well as positive brand awareness. DSC’s agility will allow it to grow well beyond the core blade business. Today, in addition to body wash, the company offers the Dr. Carver’s line of shaving products, including Easy
Shave Butter and Mandatory Prep Scrub; the Boogie’s line of styling products, including Smart Hair Paste and Casual Hair Clay; the Big Cloud line of skin defense products, including Wind Master Lip Balm, Daily Face Moisturizer with SPF 25 and Good Shake Hand Cream; and One Wipe Charlies, flushable moist wipes which contain aloe vera and chamomile. The company will also explore new subscriptions, including starter kits for wives to purchase for their husbands. DSC appears to have no plans to change the way it services or learns from its subscribers.
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Goop: Content-powered Beauty As a brand, Goop is all about making every choice count. The lifestyle brand, founded by its namesake, actress Gwyneth Paltrow, has captured the zeitgeist since its founding as a newsletter in 2008 by embracing consumers’ increasing desire for meaningful lives. These women, who tend to live in urban centers, usually work, are busy and interested in wellness, and earn roughly $100,000 or more each year. By focusing on these shoppers, Goop has become a leader in cutting-edge wellness and clean beauty, elevating the visibility of its own brand, as well as those of like-minded players such as French Girl and Beauty Chef. One thing hasn’t changed in nine years. Goop’s twin secret weapons remain its high-profile founder and its content, which help drive product launches and ongoing ecommerce. The brand’s beauty content and product mix are overseen by beauty director Jean Godfrey-June, who previously served a similar role with Lucky. In her official Goop profile, Godfrey-June says, “I love the Goop clean-beauty position and I hope to be part of the change—gorgeous beauty products should not have to be toxic!” During a presentation at the latest BBR event, Blair Lawson, Goop’s head merchant, explained that Goop has established itself as a destination for clean beauty products and content because shoppers want to consumer content and products at the same time. Lawson noted that Goop balances third-party and in-house products to ensure neutrality and authenticity. The brand engages in advertising partnerships with outside brands as part of its ecommerce business, but Goop’s team will not integrate any brands into the company’s shops if they are deemed non-clean beauty. Goop also doesn’t launch or introduce any product without the buy-in of the content team. Goop’s contextual commerce has offered readers opportunities to learn
At right: Fadi Mourad, Dollar Shave Club’s chief innovation officer, product.
about and purchase so-called clean beauty swaps, non-toxic sun tanners and non-toxic deodorants. It has also pushed the envelope, as with its popular article, “Better Sex: Jade Eggs for Your Yoni.” (Just Google it for more details.) Goop by Juice Beauty products, launched at the beginning of 2016, are 70% organic, or more, and have been accompanied by the release of a book, “Goop Clean Beauty.” The product range includes a Revitalizing Day Moisturizer ($100), Replenishing Night Cream ($140), Perfecting Eye Cream ($90) and Luminous Melting Cleanser ($90). Goop has also introduced its own fragrances, including Eau de Parfum: Edition 01—Winter ($165), “a perfume of cypress smoke, snow, sensual quiet,” and the latest introduction, Shiso Edition 02 ($165), which comprises shiso leaf extract, oakmoss extract and Bulnesia sarmientoi wood oil. The new scent’s components (all ingredients are listed on the website) are touted to “manifest sexual attraction and relationships,” “alleviate colds/chill and rejuvenate skin,” and “alleviate emotional emergencies and release past wounds and trauma.” This mix of “woo” spirituality and clean functionality are a signature of the Goop brand. Goop’s retail strategy reflects its unique position in the market. The
company recently executed a brand activation for Edition 02, Shiso in New York that featured samples of the spicy green fragrance and offered psychic readings. Goop has also partnered with Nordstrom to curate a component of the retailer’s Pop-In@Nordstrom store-within-a-store program from May 12 to June 25. The pop-up shops, which have been established in Seattle, Dallas, Chicago, Los Angeles, Vancouver, Canada, and elsewhere, offer a mix of products across wellnessoriented categories, including beauty. The program allows Goop to make its digital presence more tangible. “They [Goop] have a way of conveying wellness concepts so they are not only easy to understand, but also adopt and make a habit into a ritual,” said Olivia Kim, vice president of creative projects at Nordstrom. “Whether it’s through health, fitness, or food, or whatever is manageable through your day, integrating self-care should be easy!” Paltrow added, “Our pop-ups have been an incredible opportunity to really connect with our readers and shoppers across the country—this partnership with Nordstrom allows us to provide that experience on a heightened level of scale, touching new markets and shoppers in the process.” Goop currently ships only to the continental United States, but Lawson
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indicated this will eventually change as interest in the Goop brand has gone global. The brand has also expanded into the vitamin space, with curated packets offering energy or post-natal replenishment. Looking ahead, Goop is producing more skin care products and is hosting its debut wellness summit in Los Angeles in June. And, while about 25 physical stores around the United States currently carry Goop products, the company is working to launch its own retail store in the not too distant future. Goop is entering the omnichannel.
How to Get Your Brand on the Shelf: Lessons from a Beauty Buyer Beauty and personal care buyers want three things:
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• A product that’s different • Clear benefits and effective packaging • A well-aligned price But that’s just the start. Jessica Chung, director of merchandising at Targetowned Dermstore, shared these insights during a BBR roundtable discussion. Chung spent her career merchandising products such as appliances for retailers including Target. Today, she handles digital merchandising for Dermstore, which boasts the tagline “Shop Hard to Find Skin Care.” Chung noted that merchandising principles are essentially universal and can be translated to any category. Here’s a quick breakdown of what a retailer is looking for:
1. A great product with a great story Chung noted that buyers are product junkies, but that they’ve seen virtually
everything. That’s why it’s incumbent upon brands to clearly explain why their products are different and how they fit into the retailer’s assortment. This is why brands should always shop the prospective retailer’s brick and mortar stores to fully understand what’s in and around the space you want to occupy. Finally, when you do make your pitch, make sure it’s impactful and short.
2. An aligned strategy Chung encourages brands to understand their buyer and the buyer’s goals—especially whether they will expect you to be exclusive to their channel. Understand the context: • Does your product fill a gap in the retailer’s offerings? • Will it help the retailer keep the shopper in the store longer? • Will it cannibalize sales of existing products or drive incremental sales?
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• Can you make the case that your products can drive growth at the retailer or provide them with a point of difference? • How will carrying your products make the buyer look good? • What margin are they expecting? Buyer knowledge will allow you to craft a merchandising strategy that is unique to each retailer. This will show that you’ve done your homework and are thinking of the interests of your retail partners. At the end of the day, the buyer will want to feel that his or her financial goals and merchandising objectives will be fulfilled by the brand.
3. Readiness to execute Have a marketing program laid out for the meeting. Show the buyer that you’re ready to activate the retail partnership, that you can generate brand awareness and can direct consumers to purchase products at the buyers’ stores. Be prepared to coordinate marketing with retailer promotions to maximize impact. Chung warned that marketing plans are a must because simply being on the shelf is not enough to generate success. And the retailer will not do the work for you. Brands should leverage all the tools they can manage, including proximity marketing, social media, influencer marketing, etc. In addition, she said that brands should have a strategy for going off price within certain limits, especially in categories such as skin care. Brands should also be aware of the retailer’s discount calendar to ensure discount offers don’t pile up. Finally, brands should consider whether they will be able to offer consumer enticements such as gift-with-purchase.
4. Reliability Do you have your finances set to fulfill orders? Have you selected reliable vendors? Will you be able to deliver the right order on time? The answers had better be “yes,” but Chung warned against overcommitting during a buyer meeting. The fees for late or
damaged deliveries are significant, not to mention the damage that will be done to your credibility.
5. Sales potential Do you have a clear statement on the product positioning, a sales history that can point to recent and long-term growth? What are your projected sales?
6. The right partnership personality Buyers are busy and have little patience for products that don’t sell. So make sure you’re the type of partner they like working with. Be sure you’re an expert in your category, are solution-oriented and a good communicator, and that you understand the retail and brand business. Buyers like to work with brands and people that are a valueadd, said Chung. So make your collaboration easy and as brief as possible. If you can, give them back some of their time. And, especially when working with a top retailer like Ulta, Walmart or Target, you may want to bring in a sales rep for your brand. These
professionals have existing retailer relationships, which means they’ve already established trust, which can get you a meeting.
Go Slow Chung offered a word to the wise: scale up slowly. Big retailers like Target, which has about 1,800 stores, are too large to offer one-size-fits-all product mixes. As a result, it’s important that brands have a segmented approach that focuses on only the most effective doors. If your brand does go chain-wide at a top retailer, said Chung, you’d better have a solid strategy behind doing so. Chung also noted that big retailers are particularly slow to bring on new brands. As such, you must be patient following a buyer meeting. Keeping front of mind means following up on questions that were raised in the meeting, sending quarterly updates on your business, or even sharing relevant information such as market research or other insights that make you look like a useful knowledge partner. Whatever you do, don’t become a pest. n
Update F-3, which appeared on page 17 of the June 2017 issue of Global Cosmetic Industry, inadvertently omitted the value and currency of the global hair care market values. The updated figure appears below. We regret the error.
F-3.
Global hair care market values, 2016 ($/billions) (source: Euromonitor International)
Geographies Asia Pacific
2016 22.6
Eastern Europe
3.6
Latin America
11.8
Middle East and Africa
5.5
North America
13.9
Western Europe
13.8
Research Sources: Beauty and Personal Care: Euromonitor from trade sources/national statistics Note: Historic regional/global values are the aggregation of local currency country data at current prices converted into the common currency using fixed exchange rates; www.euromonitor.com.
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THE INDUSTRY LEADER IN PATCH TESTING TEST WITH THE BEST! • FDA REGISTERED •
“THE FINE ART OF PERSONAL SERVICE”
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MARKETS & TRENDS
These Are 2017’s Most Valuable Brands
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L’Oréal Paris is the world’s most valuable brand by a wide margin; pictured here is the brand’s Spring/Summer 2017 Holographic Color Melt collection.
ccording to new research from Kantar Millward Brown (T-1; www.millwardbrown.com), L’Oreal Paris is the world’s most valuable personal care brand, having grown 2% year-over-year to $23.9 billion. (The calculation tabulates consumer brand perception and financial data.) Lancôme and Shiseido were the fastest-growing brands by value, both boasting 10% growth, while Dove experienced a year-over-year gain of 6%. The entire top 15 list collectively increased in value by 1% over the last 12 months. Notably, six of those top brands decreased in value in that time.
T-1. Top 15 most valuable personal care brands, 2017
Rank 2017 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
(Source: The BrandZ) Brand L’Oréal Paris Colgate Gillette Lancôme Nivea Garnier Clinique Dove Estée Lauder Pantene Pro-V Olay Crest Shiseido Oral-B Head & Shoulders
Country of origin France U.S. U.S. France Germany France U.S. U.K. U.S. U.S. U.S. U.S. Japan U.S. U.S.
Brand value 2017 ($M) 23,899 17,740 16,278 9,401 6,799 6,461 5,969 5,792 4,215 4,090 3,752 3,341 2,691 2,670 2,423
Brand value change 2% -3% -1% 10% 1% 1% -4% 6% 1% 5% -4% -8% 10% -3% N/A
Rank 2016 1 2 3 4 5 6 7 8 9 11 10 12 14 13 New
The firm noted that brands that appear on its Top 100 brands grew 50% more in value year-over-year than the S&P 500 and 3.5 times the MSCI All Country World Index. In addition, the average age of a brand is now 67 years, compared with 84 years in 2006, according to Kantar Millward Brown’s analysis of its Top 100 list. According to the firm’s analysis, the brands that fared best have managed to incorporate personalization, digital initiatives and authentic marketing in ways that fended off competition from niche and indie brands. For instance, Shiseido Americas has acquired California tech startup MatchCo, which has created a mobile app that allows consumers to scan their skin tones in order to generate a custom foundation based directly on their individual data. And Pantene Pro-V introduced its Strong is Beautiful campaign to diversify beauty ideals, as well as the expectations placed upon women. Meanwhile, brands such as L’Oréal Paris have benefitted from strong growth as a result of high communication competency. Per the Kantar Millward Brown analysis, top competition threats include Too Faced, Boots No.7, Wardah, Avene, Fair and Lovely, and O Boticário, as well as retailers’ private label brands. Many of the regional brands could become global threats as technology allows businesses expand worldwide instantly, lowering the barrier to entry for entrepreneurs. n
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GROWTH FORECASTS
THE FUTURE IS
PREMIUM The beauty and personal care forecast through 2021 points to increased premiumization and personalization.
| BY NICHOLAS MICALLEF, Senior Beauty and Personal Care Analyst at Euromonitor International
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uromonitor International’s latest data* reveals a strong beauty and personal care (BPC) industry in 2016, with respectable 5% growth. For the second consecutive year, the premium segment outperformed its mass counterpart, with nearly 6% growth. Here, we explore the dynamics driving these trends.
* www.euromonitor.com/beauty-and-personal-care @GCI_Magazine
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Premiumization and Personalization for All? Beauty and personal care forecasts point to an increasingly premium future between 2016 and 2021 (F-1), with a compound annual growth rate (CAGR) of 3.6%, compared to 2.4% in the mass segment. China and the United States are predicted to contribute 54% of the $20.3 billion in absolute gains in premium beauty Global Cosmetic Industry
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over the forecast period, with China expected to catch up with the United States in terms of contribution to absolute gains. This trend is more evident in discretionary categories, as greater value is delivered by premium brands. With premium color cosmetics anticipated to grow at a CAGR of 4.2% over 2016–2021 globally, the total category has the potential to overtake hair care as the second largest category beyond this forecast period, as the gap in value sales narrows. While global mass color cosmetics and skin care remain stronger than the premium segment—predicted to add $6 billion and $12 billion in absolute gains, respectively—the key regions of North America and Western Europe reveal a healthier outlook for the premium segment. Mass skin care and color cosmetics could potentially experience the same fate as mass fragrances, which are in decline in North America and experiencing a flat 0.1% CAGR in Western Europe over the same period. These regions are now dominated by premium fragrances. The premiumization trend, prevalent in discretionary categories, is pushing mass brands in a similar direction.
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North Amewrica conquers premium beauty and personal care in per capita expenditure, which is expected to top $90 by 2021. As more consumers seek the quality and product results associated with premium formulations, mass brands will have to change to survive in the marketplace. Meanwhile, as living standards improve, luxury is becoming more accessible to ordinary consumers, notably millennials, who tend to be at the forefront of lifestyle changes. For wealthier consumers, this is more pronounced through personalized services, such as smart diagnostics. Whichever group consumers fall into, brand owners must embrace the fact that the purchasing process is increasingly knowledge-based, with consumers more capable of distinguishing science from marketing. Going forward, the use of digital technology such as augmented
reality and artificial intelligence will become more sophisticated and mainstream. The end result: personalization for all?
North America Dominates Premiumization Asia Pacific leads premium BPC forecasts over 2016–2021, and is expected to generate $6.6 billion in absolute gains. However, this amounts to just under half of the mass segment equivalent. The region’s premium segment prospects are explained by its large demographic, which has expanded as more consumers in East Asia trade up from the mass segment. Luxury is increasingly more accessible in the form of smaller packs. In addition, regional premium players such as
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GROWTH FORECASTS
AmorePacific are making inroads in several Asian markets. Nevertheless, North America conquers premium BPC in per capita expenditure, which is expected to top $90 by 2021. The region’s premium beauty forecast predicts absolute gains over 2016–2021 to amount to $5.8 billion, double the prospects in mass beauty. This makes North America ripe for the high-end prestige market, such as personalized beauty and upmarket small-batch niche labels. As premium beauty becomes deeply embedded, the competitive challenge lies not in the product quality, but in making them as distinct and as individualized as possible.
Makeup Rules Beauty At 7.2% growth, it was another stellar year for color cosmetics, further fortifying the segment following the 6% growth in 2015. To compare, skin care slowed marginally to less than 5%, largely the outcome of a slowdown in China. Other key categories, notably fragrances and hair care, posted stronger growth in 2016 versus 2015, helped by improving disposable incomes in emerging markets. Dynamic color cosmetic brands fueled category growth, including Nyx, Urban Decay and Kiko Milano, as well as a plethora of niche labels, such as Milk Makeup and Too Faced. Nyx and Kiko Milano grew via retail network expansion, supported by in-store
Premium color cosmetics have the potential to overtake hair care as the second largest beauty category beyond 2021 as the gap in value sales narrows. digital technology that enhanced the consumer experience. Winning brands are typically leveraging digital platforms to communicate their message. For example, Glossier was born out of a beauty blog utilizing crowd-sourced insights, while Milk Makeup’s growth was partly motivated by a strong online following, as well as unique attributes, such as its weightless formula for a brush-free application, and an ecoconscious and hipster positioning.
Top Consumer Drivers Evolving consumer lifestyles are the key drivers behind premium beauty’s vigor. These dynamics stem from crossindustry megatrends, which have also been observed in foods and apparel.
1. Green Consumption & Customization Purchasing decisions are increasingly motivated by consumers’ quest for healthy living and “green” consumption, in which “natural” now encompasses products with eco credentials, sustainable sourcing and clean labels. Moreover, as consumers seek experiences over possessions, they will consume fewer products and reallocate income to premium products, largely in view that these would better fulfil their needs and priorities. These trends are driving customization and personalized beauty, reinforced by smart technology, which is catapulting forward the desired lifestyles.
2. Beauty and Wellness Nyx and Kiko Milano (pictured) grew via retail network expansion, supported by in-store digital technology that enhanced the consumer experience.
Meanwhile, the pursuit of prevention and wellbeing is driving innovation beyond cosmetics. For
AB Crew exploited the surfacing of athleisure beauty to target active consumers with muscleenhancing and recovery topical solutions.
example, Burt’s Bees entered beautyfrom-within with protein shakes, while AB Crew exploited the surfacing of athleisure beauty to target active consumers with muscle-enhancing and recovery topical solutions.
3. Dermocosmetics on the Rise The resilient dermocosmetics segment is boosting brands such as Rodan + Fields and La Roche-Posay, both of which grew in double digits in 2016. This growth is also channeling
Exuviance boasts makeup that leverages its dermocosmetic heritage to complement its skin care solutions.
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GROWTH FORECASTS
Yun Probiotherapy is taking dermocosmetics to a new level with live probiotics.
innovation in this segment. For example, Exuviance boasts makeup that leverages its dermocosmetic heritage to complement its skin care solutions.
4. Probiotics Products formulated with live probiotics that claim to act on skin care issues by helping to balance the skin’s bacterial flora represent a novel entry in the beauty industry. Among the pioneers are Mother Dirt and Yun Probiotherapy, both of which take dermocosmetics to a new level.
5. Devices Beauty devices continue to advance. In 2016, 8.3 billion electric facial cleansers were sold globally, reflecting the growing quest for “smart” solutions. Personalization plays a crucial role in device innovation, assisting users in developing daily
habits, tracking results and using products that exactly match their requirements. Device design is also increasingly aimed at “clean living.” For example, Dermalogica’s Breezometer partnership tracks pollution levels in the user’s environment to recommend the bestsuited Dermalogica product.
High-growth Markets At the country level, Brazil and Russia have restored their place among the most promising growth markets. While the economic situation improved in Brazil, brand owners also resorted to measures such as frugal innovation and promotional offers to keep demand intact. Meanwhile, Russia was boosted by local players, such as Natura Siberica and Faberlic, and higher spending in
Russian high streets, as consumers shunned shopping destinations such as Paris and London and spent less in travel retail. These dynamics helped Brazil and Russia post growth of 4.8% and 9.8%, respectively. The markets of India and Indonesia nearly doubled in size between Russia was boosted 2011 and 2016. In by local players, such 2016 alone, India and as Natura Siberica Indonesia expanded and Faberlic, and at 9.2% and 10.6%, higher spending in respectively. Projections Russian high streets. point to similar ongoing dynamics. Although India is expected to suffer in the short term from demonetization, it is forecast to recover quickly as retailers facilitate cashless transactions. n
NICHOLAS MICALLEF is a senior beauty and personal care analyst at Euromonitor International, which he joined in April 2014. In his current position, he publishes a significant number of studies related to corporate strategies, market entries, competitive intelligence and opportunity analysis in the beauty and personal care industry with particular emphasis on fragrances, deodorants , health-based beauty and oral care among others. His industry expertise includes multinational companies’ strategies, objectives and challenges and his analysis regularly features in the trade press.
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CONSUMER DATA
BEAUTY CONSUMERS OF EVERY AGE
A close-up examination of the habits and attitudes of millennials, Gen Xers and baby boomers; part 1 of a 4-part series. • The beauty consumer of today places strong emphasis on her family and friends and won’t make a move without their input and opinion. • She views beauty as a necessity and buys more of it than she did a decade ago. • Today’s beauty consumer also places less emphasis on classic distinctions of luxury or mass and has room in her makeup bag for products of all shapes, sizes and, importantly, prices.
@GCI_Magazine
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| BY DENISE HERICH, The Benchmarking Company
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oday’s beauty consumer is savvy and educated, inquisitive and curious. As always, she is keenly interested in finding products and solutions that will solve her particular beauty concerns and, importantly, she wants those solutions to work, to fit her lifestyle
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and to be perfect for someone like her. She also wants them to be a good value for the money, but that doesn’t necessarily mean cheap. For today’s avid consumer—of beauty products and everything else—information has become the name of the game. For The Benchmarking Company’s (TBC) 2016/2017 PinkReport: Ten-Year Beauty Benchmark—A Consumer Love
Global Cosmetic Industry
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Affair with All Things Beauty,* we took a look at how far beauty has evolved over the past decade, and what that evolution means to brands in terms of guiding marketing plans, devising customer acquisition strategies and implementing loyalty programs. Covering everything from technology to the rise of social media to the impact of consumer reviews, this report compares the beauty consumers’ wants, needs, brand favorites, expectations and buying behaviors against those of 10 years ago, as well as unveiling trends that we expect will have a major * The Benchmarking Company’s (TBC) “2016/2017 PinkReport: 10 Year Beauty Benchmark: A Consumer Love Affair with All Things Beauty,” provides an in-depth look at the U.S. female beauty consumer. This report details extensive quantitative primary research designed to uncover the aspects of this consumer’s interaction with beauty, as well as what is and is not driving her interest in your brand or store. Thousands of U.S. women were invited to take part in the online survey, which was completed by 6,212 female beauty consumers who have used beauty products within the past 12 months of the study date. The comprehensive survey instruments, which included more than 75 in-depth questions, were developed based on exploratory psychometric and demographic questions. In order to qualify for this study, respondents had to be female and live in the United States, be between the ages of 18 and 70, and shop for beauty products. All research was conducted between May and June, 2016.
impact on beauty over the next decade. More than 300 brands were covered in this study, as well as every major retail distribution channel. In Part 1 of this article, we will get to know today’s beauty consumer— in particular, the specifics of how millennials, Gen Xers and baby boomers differ in their attitudes toward beauty (see Know Your Beauty Consumer). In Part 2, we will explore how our beauty spending habits have evolved over the past decade and what is driving beauty spend today. Part 3 will take a peek at what categories and brands are leading beauty today. In Part 4, we will explore a few of the trends gearing up to shape beauty for the next 10 years and beyond. This four-part series includes charts, graphs, and beauty consumer data found nowhere else.
Say Hello to Today’s Beauty Loving Consumer The beauty consumer of today is a digital diva and a traditionalist, triedand-true (see T-1). She places strong emphasis on her family and friends and won’t make a move without their input and opinion. Beauty is both a necessity and a desire to her, and she is buying significantly more and more of it than she did a decade ago. However, unlike her consumer of yesterday, today’s
T-1. A beauty consumer snapshot, 2006 vs. 2016 Category
2006
2016
Age: 25–39
52%
43%
Household income above $50K/year
43%
56%
Marital status: married
53%
58%
Shops for beauty: monthly
18%
41%
How she discovers beauty
Saw it in a store
Friends/family
Top motivator to purchase
Product was on sale
Free sample
Favorite magazine
Cosmopolitan
Allure
Internet use (per day)
Doesn’t use internet (43%)
3–8 hours daily (65%)
Favorite store for beauty products
Walmart
Target/Walmart
Favorite website
Yahoo.com
Amazon.com
Favorite color cosmetics (mass)
CoverGirl
CoverGirl
Favorite color cosmetics (masstige)
Avon
Physician’s Formula
Favorite color cosmetics (prestige)
Clinique
Urban Decay
Favorite social site
MySpace
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Consumer Data 25
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CONSUMER DATA
KNOW YOUR BEAUTY CONSUMER The Millennial (age 18-34) Shopping Habits • 38% of millennials shop for beauty every month, 27% are shopping weekly and 9% are shopping daily! • Sephora (40%), Ulta (37%), and Bath & Body Works (31%) are her favorite brick and mortar beauty stores. • 64% of millennials say they purchase more at Amazon.com than they did 10 years ago. For older millennials, women in their early 30s, this signals an uptick in beauty shopping at Amazon.
Purchase Influencers • 49% of women of this generation report being online (not related to work) more than six hours a day; 38% note that more than 50% of this time is spent on social sites, including Facebook, Twitter, Instagram and Snapchat. This means one third of women in this generation are spending no less than three hours per day on social media. • The girlfriend-to-girlfriend influence is strongest in this generation; 67% say they learn about new beauty products from friends. • Millennials are swayed by what is trending in social media; 58% admit that what a blogger or vlogger says greatly influences her purchase decision, while 52% say that a product or brand trending in social media sways her intent to buy. • 71% of millennials say they spend significantly more time online than they did 10 years ago. • When she’s in the market for new beauty products, millennials use the internet to compare prices (76%), read reviews (72%) and actually make a purchase (63%). • Millennials’ favorite magazine sites are Cosmopolitan.com (46%), Glamour.com (36%), Allure.com (35%) and InStyle.com (21%). • Millennials are the generation most likely to watch an online tutorial; 53% say they are swayed to purchase a product after watching an online tutorial. • 86% of millennials are highly influenced to purchase a beauty product as a result of reading positive reviews, the highest percentage across all generations.
The Gen Xer (age 35–49) Shopping Habits • 42% of Gen Xers shop for beauty monthly, on par with millennials and more than baby boomers; 25% shop weekly, with another 7% shopping daily. • 56% of Gen Xers are purchasing more from home shopping channels than they did 10 years ago.
• 90% of Gen Xers post comments and reviews on Amazon.com. • 90% of Gen Xers have purchased beauty products from their favorite all-time beauty brand in the past 12 months.
Influencers • 72% of Gen Xers say they spend significantly more time online than they did 10 years ago. • Gen Xers are browsing: Allure.com (68%); Glamour.com (48%) and Cosmopolitan.com (41%). • 39% spend more than six hours online, daily (non-work related). • Approximately one third of Gen Xers spend more than 50% of their online time on social sites such as Facebook, Twitter, Snapchat and Instagram.
The Baby Boomer (age 50+) Attitudes & Habits • 81% of baby boomers say consumer claims (from women similar to them) are influential in their decision to purchase beauty products. • 84% want to know that a product is made specifically for someone “my age.” • She is a product loyalist; 59% state that big brands offer products that are “tried and true,” and she expects to use these products for at least the next 10 years.
Influencers • 91% of boomers are members of Facebook, while 64% look to Pinterest for inspiration and 51% are sharing tweets on Twitter. • She regularly visits Allure.com (65%), InStyle.com (46%) and Glamour.com (43%) for information on beauty brands and products. • Although not as engaged online as younger consumers, 86% of baby boomers post comments and reviews on Amazon.com; 87% of boomers read reviews on Amazon.com, 43% on Sephora.com and 40% on Ulta.com.
Shopping Habits • 42% of baby boomers shop for beauty monthly, which is just slightly more than millennials and the same as Gen Xers. However, boomers are the least likely to shop weekly or daily for beauty. • 54% of baby boomers are purchasing more from home shopping TV channels (and websites) than they did 10 years ago, while 53% are purchasing more from doctor’s offices and 51% are purchasing more from specialty beauty retail stores. n
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SGD becomes Verescence. A new chapter of our story begins with Verescence, now solely focused on the world of Perfumery and Cosmetics. Our new name reflects what we are today: a global glass manufacturing leader for the beauty industry, strengthened by our know-how, diversity, and talents, with the ultimate ambition to reach excellence for our customers.
MADE OF GLASS AND PASSION.
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CONSUMER DATA
beauty buyer places less emphasis on classic distinctions of luxury or mass. Today, there is a place in her makeup bag for products of all shapes, sizes and, importantly, prices.
She Wants Proof She Can Trust from “Women Like Me” Today’s beauty consumer is no longer a passive recipient of beauty information. Rather than traditional advertising as a means to motivate her to buy, consumers of all ages are looking for proof of efficacy from women like them before they buy. It’s not enough to hope that a product will work for her. Today, she wants to be sure. Today’s beauty consumer is looking to answer the question: “will this product work for someone like me?” She gets her answer through consumer reviews and claims. Eightythree percent (83%) of women say positive consumer claims from “women like me” are influential to extremely influential in her decision to purchase—even more so than clinical claims, which 25% of consumers rank as extremely influential—and 61% agree that before and after pictures of women who have used the products are influential to extremely influential. Consumer claims don’t just influence what she already knows she is going
T-2. Where the beauty shopper is going to read and post reviews, 2016 Site
Reading
Posting
Amazon.com
88%
88%
Sephora.com
54%
37%
Ulta.com
50%
31%
Brand retail site
31%
23%
to purchase; nearly half of women admit they would buy/use more beauty products if they could read consumer claims from women like them that affirmed that the products work. To show how much beauty consumers have changed, in 2006 using the internet to search for consumer claims or read online product reviews wasn’t even mentioned by beauty consumers because the internet just wasn’t her go-to source for information. Interestingly, second only to free samples, 2016 survey respondents noted that positive reviews have the greatest influence on them to purchase a beauty product. Eighty-six percent (86%) of consumers noted that a product that was highly reviewed by many consumers would sway them toward purchase. When she’s online, 77% of beauty shoppers say that the presence of consumer claims—such as, “98% of women said they saw a reduction in fine lines”—is an important factor
in determining which websites they frequent for both browsing and purchasing. For a breakdown of product review habits, see T-2.
Part 2: Beauty Shopper Habits, Motivations and Needs Next up, in Part 2 of our four-part series, we will explore how shoppers’ beauty habits have evolved over the past decade. We’ll also look at what’s driving her interest in beauty, how she gets her information on beauty and what she wants from her favorite beauty brands. n Based in sun-seared San Diego, DENISE HERICH is co-founder and managing partner at The Benchmarking Company. The Benchmarking Company provides marketing and strategy professionals in the beauty and personal care industries with need-to-know information about its customers and prospects through custom consumer research studies, focus groups, its annual PinkReport™, and consumer beauty product testing for marketing claims. www.benchmarkingcompany.com
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INFLUENCER MARKETING
Indie brands have been successful in part because they utilize social media almost exclusively, sans traditional media. The lower financial risk of this strategy enables easier measurement of ROI with digital data points.
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Influencer Marketing Strategies for Indie, Mass and Luxury Brands How to drive conversion among the frivolous millennials and tech savvy boomers. | BY SOURABH SHARMA, Fig or out, and TRINA ALBUS, Magenta
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as there ever a marketing handbook that taught brands how to launch a product? Perhaps. But the notion is less reliable today. At a recent Cosmetic Executive Women (CEW) event in New York, Robert DeBaker, president and CEO of Becca Cosmetics, explained that the influencer strategies of recent years no longer work and that, consequently, brands must be willing to burn their playbooks every year or two (see Page 54). This puts significant stress on the organization and product pipeline, but this is how brands stay competitive today. The ways in which people browse, shop and use technology and social media to make their decisions creates challenges for traditional, legacy beauty brands, and opportunities for new and indie brands. Regardless of brand type—mass, masstige, prestige or luxury—the employment of social and digital marketing, alongside influencer marketing, is key in driving conversion with the frivolous millennials and the tech savvy boomers.
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Indie Brand Strategies Indie brands are only getting hotter, with natively digital brands cropping up frequently. At the CEW Insider Awards, the indie category grew from having a one catch-all award to four: brand, fragrance, makeup and skin care.* Indie brands have been successful in part because they utilize social media almost exclusively, sans traditional media. The lower financial risk of this strategy enables easier measurement of ROI with digital data points. Furthermore, consumers trust product recommendations from their favorite influencers more than traditional ad campaigns. This is useful for indie brands with limited budgets, as it is more cost-effective to collaborate with a big influencer or several micro influencers than buying print ad space. *The indie winners at this year’s ceremony were as follow: New Game in Town (Indie Brand Beauty Award), Charlotte Tilbury Beauty; New Game in Town—Fragrance (Indie Fragrance Award), Charlotte Tilbury Beauty Scent of a Dream; New Game in Town—Makeup (Indie Makeup Award), Milk Makeup Holographic Stick; and New Game in Town—Skin Care (Indie Skin Care Award), Farmacy Beauty Honey Potion.
Los Angeles-based indie ColourPop is a digitally native cosmetics brand that has successfully leveraged influencer marketing by partnering with KathleenLights to co-create the “Where the Light is” eye shadow quartet. Influencers like KathleenLights work on product development and are involved in color selection, manufacturing, naming, packaging and marketing. This results in more authentic products and content that
Los Angeles-based indie ColourPop is a digitally native cosmetics brand that has successfully leveraged influencer marketing by partnering with KathleenLights. Influencer Marketing 31
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INFLUENCER MARKETING
Retail & Mass Brand Strategies
Tarte Cosmetics leveraged influencer collaborations and hashtags to generate an earned media value of $44 million by August 2016, according to Tribe Dynamics; pictured is the brand’s Tight Bright Clay Multi Mask.
connect with consumers and drive sales. According to Tribe Dynamics (www.tribedynamics.com), “Where the Light Is” drove the generation of $1.3M EMV: $561K by KathleenLights herself, and $784K by the community of beauty bloggers supporting her and responding to her work. Similarly, Tarte Cosmetics leveraged influencer collaborations and hashtags to generate an earned media value of $44 million by August 2016, according to Tribe Dynamics. The brand coined the term “Tartelettes” for its followers and the hashtag #worksofarte for new launches. It also created a unique travel-based hashtag, #trippinwithtarte, allowing users to buy products while the influencers were traveling.
In January 2017, Maybelline New York worked with Manny Gutierrez and Shayla Mitchell to launch its Colossal Big Shot mascara.
Social media and influencer marketing are most effective for retail and mass brands, as these reach a large and diverse audience. Maybelline New York, with its 5.1 million Instagram followers, posts innovative collaborator videos and partners with beauty vloggers for makeup tips and tutorials. In January 2017, the brand worked with Manny Gutierrez and Shayla Mitchell to launch its Colossal Big Shot mascara. These influencers accurately represented the notion that fans could “lash like a boss.” Similarly, Dove Men worked with American rugby players across the six-week Rugby World Cup, with resulting contests on Twitter using a #ScrumTogether hashtag. By refining entries and conversations and building the campaign during this time period, the brand was able to target its 35+ sport-loving male demographic, resulting in Twitter’s measured 67% like-for-like sales uplift, compared to 2014. Nyx Beauty Bars employ tech and social differently, creating a unique instore and online experience. Shoppers scan a barcode or use an Instagram hashtag to find everything from product details to tutorials. This makes
it a unique experience, which has enabled Nyx to double its global store count in 2016.
Luxury Brand Strategies By definition, luxury is about creating a value from the distance between the brand’s aspirational nature and its consumers. By valuing scarcity or exclusivity, a luxury brand can catapult itself to higher levels of perception. Social media, by its nature, embraces democracy, diversity and puts everyone on a level platform. The interaction between brand and consumer can be tricky, which is why luxury players have been slower adopters of social media and influencer strategies. However, the risk of losing their enigma and exclusivity has been outshone by luxury beauty brands that embrace it. Influencer marketing is effective for luxury brands, but they have to ensure they find influencers who represent the affluent and fashionable lifestyle to which they want to be associated. For example, Guerlain partnered with influencers from Style Coalition to offer personalized products, while Clinique tapped bloggers to promote a three-step skin care system for the #FaceForward campaign. Beyond promoting the skin care line, Clinique celebrated the
NYX Beauty Bars employ tech and social differently, creating a unique in-store and online experience.
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Clinique promoted a three-step skin care system for its #FaceForward campaign, which celebrated the spirit of bold women by partnering with women from fashion, health and the arts.
spirit of bold women by partnering with women from fashion, health and the arts—Tavi Gevinson, Hannah Bronfman and Margaret Zhang—and asked them what advice they would give to their future selves. Launched on Tumblr and boasting 1.6 million female millennial visitors monthly, Millward Brown found that these users had an uplifted view of Clinique, with 51% of them recommending the brand to a friend, 52% willing to talk about the topic of self-advice and 59% likely to purchase Clinique. Luxury brands are also known for selecting prominent faces for their campaigns. Social media has changed how these are selected, which explains why Kendall Jenner, with a tag of
Oscar de la Renta’s Something Blue campaign selected Instagram pictures from the couture feed of #MySomethingBlue and posted them on Pinterest, allowing for an interactive promotion, supplemented by a Facebook app.
“ultimate Instagirl” based on her 50 million Instagram followers, became the face of Estée Lauder. (The brand recently announced that it would discontinue its Estée Edit collaboration with Jenner by the end of this year.) Meanwhile, fragrances from Burberry and Oscar de la Renta have launched on Facebook and Instagram, respectively. Oscar de la Renta’s Something Blue campaign selected Instagram pictures from the couture feed of #MySomethingBlue and posted them on Pinterest, allowing for an interactive promotion, supplemented by a Facebook app. The result enabled shoppers to view the new product from various aspects outside of traditional print and promotional advertising.
The Payoff The trust that influencers have with their audiences is significant enough to impact bottom lines. For instance, the winner of the CEW 2017 Most Buzzed About Beauty Collaboration Award was the Becca x Jaclyn Hill Champagne Collection, a face palette that inspired cocktails of color and light for the perfect, customized #champagneglow. The palette sold out all 41,000 units in just two hours, while the collaboration generated more than 1 billion social media impressions.
A youthful nail polish brand like Essie can more effectively run Snapchat or Instagram campaigns, like the creation of National Nail Polish Day on June 1, during which users recalled their favorite nail color with the hashtag #essielove; pictured is the brand’s Wild Nudes collection.
Know Your Demographics Millennials epitomize the change in marketing strategy from traditional to social, but brands must step back to understand their target market and social media behavior. Campaigns aimed at boomers prove most effective on Facebook, the demographic’s preferred platform. Conversely, a youthful nail polish brand like Essie can more effectively run Snapchat or Instagram campaigns, like the creation of National Nail Polish Day on June 1, during which users recalled their favorite nail color with the hashtag #essielove. Understanding market needs and touch points is key to driving conversion. Ultimately, social media can work well across different price points and brands, as long as brands can match target demographics and platforms to their own core identity and values. n
SOURABH SHARMA (sourabh@ figorout.com) has a keen eye for understanding consumer behavior in the digital world, which prompted him to start his digital marketing and public relations company Fig or out, focusing on beauty and fashion brands. He has 10+ years of experience in the marketing space with a background in brand management, influencer marketing, social media and management consulting, having worked for multinationals, startups and small businesses. He brings perspective to marketing through understanding of various consumer demographics and how they embrace digital platforms to make choices and influence decisions. As a fashion influencer and food critic himself, he keeps an eye out on trends in overall lifestyle, and how digital strategies evolve and impact them.
TRINA ALBUS (trina@ magentaagency.com) is the founder of Los Angeles-based Magenta, the social marketing agency for beauty brands. Albus has 20 years of experience in digital and has been acknowledged by the industry since 2009 as a thought leader in social media marketing. She balances her time running the agency and teaching digital marketing and influencer marketing seminars through her partnership with New York-based Association of National Advertisers (ANA). Before founding Magenta, Albus spent 15 years putting her knowledge of economics, math and statistics to work for the technology and marketing groups at startups, management consulting firms, and large multinational corporations. A micro influencer herself, Trina keeps an eye out for emerging antiaging beauty and skin care trends for her YouTube channel, Beauty Beyond 40.
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A new breed of retailers are gravitating toward brands with high quality products, sophisticated packaging and an active founder that is taking the messaging forward.
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Indie Beauty’s Authentic Revolution Indie founders and retail experts on consumers’ thirst for authenticity, the role of founder stories and the market’s desire for uniqueness.
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he indie brand revolution is unfurling before our eyes, with one inspiring brand founder after the next seducing customers with one-of-a-kind products and stories of passion. At the heart of this is the irresistible singlemindedness of entrepreneurs with a vision to innovate, create and connect with like-minded people on social media. Increasingly, indie beauty is big business, with significant recent acquisitions including Coty acquiring a 60% stake in social selling beauty brand Younique for about $600 million in cash, Estée Lauder’s purchase of Becca Cosmetics for an undisclosed sum and Unilever’s purchase of Living Proof, also for an undisclosed sum. A recent report from Kline Group (www.klinegroup.com) scoped out the latest batch of what it deemed “Beauty’s Most Buyable Brands.” The criteria included brands with a strong following and a point of difference. According to Kline, top buyable beauty brands tend to cluster in makeup and skin care and include: • Anastasia Beverly Hills (on-trend color cosmetics) www.GCImagazine.com
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• Drunk Elephant (non-toxic skin care) • Josie Maran (natural and eco-friendly skin care) • Milk Makeup (genderless, on-thego, easy-to-use makeup) • NudeStix (on-the-go beauty)
What is Indie? “Independent brands offer a deeper emotional connection to consumers,” said Nader Naeymi-Rad, co-founder of the Indie Brand Expo (IBE). “They are about discovery and curiosity.” Launched in 2015, IBE is a fastgrowing tradeshow that showcases rising indie brands. It enables indie owners (those who control at least 50% of the brands they operate) to meet a spectrum of buyers, from top retailers like Sephora, HSN and Whole Foods, to smaller channels (“the cousins of indie brands, except on the retail side”) like Detox Market, Cult Beauty and Credo.
and demographics, and which are environmentally friendly. In short, nonmainstream products. The change in consumer preferences also extends to how people are shopping for beauty, shifting from celebrity-driven advertising to influencer YouTube videos as a key purchase driver. “Consumers are moving away from old, established brands that have been over-marketed,” said Naeymi-Rad. “Women look up less to movie stars and more and more to people who overcame big odds and have made a difference. A founder’s story and a mission-oriented business, like [skin care brand] Violets Are Blue, are very
Customization, Heart and Design: A Powerful Combination “What’s providing oxygen to the market is the distinct shift in consumer preferences,” said NaeymiRad. Today, people are looking for innovation, customized solutions, products that suit their values, lifestyles
“A founder’s story and a mission-oriented business, like [skin care brand] Violets Are Blue, are very appealing to consumers.” Niche, Indie & Luxury Beauty 37
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appealing to consumers. It’s harder for large multinationals like P&G to infuse authenticity in their brands like indies do.” The founder story of Violets are Blue’s Cynthia Besteman is emblematic of Naeymi-Rad’s point. Besteman was diagnosed with breast cancer in 2011 and quickly cleared her lifestyle of anything toxic or misleading labeled as natural or organic. This, paired with a love of formulating her own skin care, led Besteman to develop Violets Are Blue four years ago. The brand comprises natural ingredients and has a simple motto: “skin care does not have to be complicated; in fact, keeping it simple is best.” Besteman’s personal story is at the heart of her branding and marketing, something that is difficult if not impossible for multinational brands to replicate. Aesthetics and supply dynamics also play a role. Naeymi-Rad explained, “Twenty years ago, indie products looked grungy, now they look prestige. As demand has gone up, supply has become easier. This, coupled with e-commerce removing barriers to entry, and access to digital influencers, has leveled the playing field.”
Vapour Organic Beauty, a color cosmetics brand with synthetic-chemical-free formulations, has found a home at fashion retailer Free People (part of the URBN portfolio).
Getting Retail-Ready So what makes an indie brand stand out to retailers? “There is a desire for a more elevated natural beauty,” said Leilah Mundt, founder and CEO of Crème Collective, a beauty and wellness brand management agency that acts as a matchmaker between indie brands and retailers. The agency counts brands such as Rituel de Fille, Patyka, Worker B, The Beauty Chef and Vapour Organic Beauty in its portfolio. It’s telling that Crème Collective receives five to 10 submissions per week from indie founders. Indeed, demand for indie brands is increasing exponentially, and is said to be in the double-digits, or two to three times the overall market, according to a recent Kline study.
Of course the products must deliver on efficacy, but indie brands must also have a unique story to tell if they are to rise above the fray. “There is so much emotion that goes into building a brand,” said Therese Clark, partner and head of creative at Crème Collective. “You can’t copy or manufacture the authenticity of indie brands. Brand-builders can get stuck in product development. We are able to coach a brand if something is a little off with the messaging or the packaging needs to be changed.”
The Beauty Learning Curve Indie Beauty Expo also provides support to entrepreneurs with its preshow Connect Indie workshops, which enable brand owners to learn and
A new breed of retailers are gravitating toward brands with high quality products, sophisticated packaging and an active founder that is taking the messaging forward. To meet that demand, Mundt and her team focus on helping brands get retail-ready, which translates into making sure that all the elements of a brand are aligned before the agency finds a retail home for its clients. “A new breed of retailers are gravitating toward brands with high quality products, sophisticated packaging and an active founder that is taking the messaging forward,” said Mundt. “We get to know brand owners and their story, and do all the vetting on behalf of retailers. I have no interest in getting a brand into a retailer that is not a good fit.”
network with other founders, as well as industry experts. “Buyers are also realizing that they need to adjust the way they work with indie brands, by incubating them and building a relationship with them,” said Naeymi-Rad. “Indies are not L’Oréal. They don’t have a global supply chain, so buyers need to work without those capabilities. It’s about discovering indie gems and finding the best way to work with them.” Niche retailers with a smaller footprint are geared to work with indie brands, said Naeymi-Rad. For many small brands, indie retailers such as
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INDIE BRAND UPSTARTS
Alaffia’s brand DNA centers around the fair trade of shea butter in West Africa and has expanded to personal care products featuring the natural riches of the region, including the Everyday Shea Body Wash in lavender, which includes unrefined shea butter, virgin coconut oil, neem extract and lavender essential oil.
Indie Lee is a brand that epitomizes the clean beauty elements and strong founder story facets of indie beauty. For example, Indie Lee Rosehip Cleanser ($32) is formulated with just a handful of ingredients, most notably rosehip oil, and soothes rosacea-prone skin while reducing the appearance of wrinkles.
RMS Beauty’s founder, Rose-Marie Swift, built her brand around her years of professional makeup expertise and a health crisis that led her to focus on the ingredient content of beauty products. The resulting brand has been a big hit, including popular launches such as the Signature Sets palettes, which include “bright colors and iconic finishing touches” and are available in two variations: Mod Collection and Pop Collection.
Austalia’s Frank Body was an early leader in the coffee scrub arena. The sexually charged brand has expanded beyond its signature scrubs to offer a wide range of SKUs, including the Glow Mask, comprising goji berry extract, shea and cocoa butter, Arabica coffee seed oil, and cranberry and raspberry seed oils.
Chaos Makeup is a brand that thrives on active color fast-moving trends. Its vegan Kaleidoscope Rainbow Highlighter ($26) lends an iridescent glow without glitter for a dewy effect. The brand also offers Color Shifting Highlighters ($25), which change shades depending upon the viewing angle and lighting. For instance, Ice transitions from green to blue to purple, while Moon shifts from green to yellow to orange. The brand is also developing what it calls its Mood Cream cosmetic, which changes color when it comes in contact with water.
Herbivore Botanicals is a brand born from the trend toward natural products and was founded in 2011 by Alex Kummerow. The brand began on Etsy, but has expanded to Sephora, Nordstrom, Urban Outfitters and more. The brand features on-trend minimalist design and includes SKUs such as the Pink Clay skin-softening mask.
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CAP Beauty in New York City and Shen Beauty in Brooklyn are the best places to start when it comes to distribution. Naeymi-Rad continued, “Everyone wants a piece of Ulta’s business. The smaller retailers can’t beat Ulta by price or local presence in suburban strip malls, so they promote a differentiated brand selection. Mindful retail buyers are looking for brands with real value.” Some large retailers, such as Urban Outfitters, are also aggressively scouting indie brands at IBE, according to Naeymi-Rad, making them the newest havens for indie beauty. For Crème Collective, this knowledge helped them place Vapour Organic Beauty, a color cosmetics brand with synthetic-chemical-free formulations in its portfolio, at fashion retailer Free People (part of the URBN portfolio). Other brands, such as luxury green skin care brand Patyka, have found a retail home
in fast-growing, natural beauty emporiums such as Credo.
Making Retail Connections Sephora spotlights its own selection of indie brands via its Scouted By Sephora program, enabling brands such as athleisure beauty player Yuni (“mindful beauty for an active life”) to gain prominent distribution. “For a small indie brand, starting to work with large retailers is an important step as it requires much more planning and investment [than a small indie retailer],” said Emmanuel Rey, cofounder of Yuni. “It takes time to adjust to the various departments involved, including merchants, marketing, e-comm, logistics and finance.” By contrast, working with smaller retailers—such as luxury e-tailer Cult Beauty, with which Yuni recently partnered—brings out different facets of the relationship.
“For a small indie brand, starting to work with large retailers is an important step as it requires much more planning and investment [than a small indie retailer],” said Emmanuel Rey, co-founder of Yuni.
“Smaller indie retailers have a very personal relationship with brand founders, and it is very easy to formulate and put in place an overall plan,” said Rey. “That said, with a big retailer, once the fundamentals are in place, it is usually quite easy.” He concluded, “The indie revolution is obviously fueled by the information access through digital and social media, but also by a certain defiance of young consumers toward big corporations in general. There is a true thirst for authenticity and to be able to connect almost directly to the founders. In this respect, we are amazed by the amount of direct personal communication we receive.” n
LAURA ZIV is a creative brand strategist specializing in For many small brands, indie retailers such as CAP Beauty in New York City and Shen Beauty in Brooklyn are the best places to start when it comes to distribution; however, some larger retailers, including Urban Outfitters, are seeking to differentiate themselves with a selection of indie brands.
beauty, fragrance and personal care. Her work spans trend analysis, innovation, ideation and concept development for brands. Ziv has a Master of Arts from Oxford University, and previously worked as a magazine writer and editor for international magazines based in New York.
Trends, insights and breaking news every business day: www.GCImagazine.com/newsletter www.GCImagazine.com
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THE FUTURE IS PREMIUM
Differentiating
Luxury
Design Redefine what luxury means by starting new packaging trends that go against the grain.
| BY SHERI L. KOETTING, MSLK
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Global Cosmetic Industry
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aterials, finishes, shapes, colors, typography, and imagery all play a role in creating a cohesive luxury experience. Some of these design choices are so ubiquitous that they have become canons in the luxury space. However, for every tried and true industry canon, there is a counter trend that emerges to challenge the norm. Indeed, the most innovative trends in luxury are happening in the indie beauty space. By no means exhaustive, the subsequent canons and trends are important for both emerging and established luxury brands to consider as they launch products or rebrand existing lines.
Package Materials and Finishes A quick perusal through the fragrance, hair care and skin care aisles at premium retailers reveals a number of visual and material cues that have become the standard in luxury packaging. Glossy metallic caps, collars and bottles dominate. The sheer amount of gold and silver is at times so prevalent that it is difficult for any one brand to stand out on the shelf. In contrast, brands that exercise restraint through a controlled use of gloss and metallic have the ability to make waves. Restraint: Rather than cover its whole package in gold, Lisa Franklin London utilizes large expanses of white with a decisive gold accent. The L of the brand’s logo is gold and becomes the core graphic element on the package.
The epitome of restraint: Lisa Franklin London utilizes large expanses of white with a decisive gold accent. www.GCImagazine.com
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Package Shape
Unique metallic: The controlled use of bronze, a less common metallic, with additional soft colors and cork caps, makes for a refreshing, flexible system.
Another skin care brand, Amala, has packaging that is mostly white with bronze foil stamping and delicate line drawings. The controlled use of bronze, a less common metallic, with additional soft colors and cork caps, makes for a refreshing, flexible system. Soft touch: The use of soft touch finishes to counter high gloss and metallic is another trend that we are seeing. Skin care brands Kora Organics and Nude are using soft touch to enhance the tactile quality of their packaging. There’s an approachable quality to soft touch that just makes one want to pick up and use the product. Prismologie goes one step further by foil stamping type on its soft touch tubes, creating a beautiful contrast.
Package shape is a powerful core brand asset, especially if using a custom mold that can be protected as intellectual property. For luxury brands, this is often essential to give you a competitive advantage. In some cases, shape can even become more identifiable than your logo. Sleek and organic shapes: In the skin care and hair care categories, standard jars, pumps and tubes that are close to stock shapes or actual stock components are still prevalent. If investing in a custom mold, consider going far beyond standard profile shapes in order to stand out. Crystalized/fragmented shapes: Shiseido is doing just that. In several of its serums, eye treatments and moisturizers, the brand employed curved, tapered profiles reminiscent of Brancusi sculptures. Lancôme is using a similarly tapered profile in its rehydrating toner and anti-aging serum. In both cases, the results are incredibly sleek, unexpected shapes that convey speed and performance. On the opposite end of the shape spectrum is a brand such as Clé de Peau Beauté, which uses a highly reflective crystal shape for its limited edition cream, inspired by the decadence of the Roaring Twenties. The package is impressive, and impossible to ignore. Similarly, Swiss brand La Prairie uses crystal shapes in its Platinum Rare cellular cream to signify a premium level. It is one of the few products
Distinctive shape: Clé de Peau Beauté uses a highly reflective crystal shape for its limited edition cream, inspired by the decadence of the Roaring Twenties.
Distinctive design: Swiss brand La Prairie uses crystal shapes in its Platinum Rare cellular cream to signify a premium level; it is one of its few products priced over $1,000, and the package structure clearly conveys this price difference.
priced over $1000, and the package structure clearly conveys this price difference. Seamless package profile: Another predominant trend in the shape category is a seamless profile from bottle to cap. Giorgio Armani uses black caps and bottles in several of its creams and serums to create a sleek seamless silhouette. NARS is doing the same in several of its products across the skin and makeup categories.
Color Seamless: Giorgio Armani uses black caps and bottles in several of its creams and serums to create a sleek seamless silhouette.
Soft touch: Prismologie takes the soft touch a step further by foil stamping type on its soft touch tubes, creating a beautiful contrast.
Soft touch: Kora Organics uses soft touch to enhance the tactile quality of its packaging.
Color is another top brand identifier that consumers notice at retail. The canon for traditional luxury brands is an abundance of gold and silver, along with white, black and rich jewel tones. Muted and pastel tones: When conveying luxury, it is best to stay away from strong, potentially garish colors such as
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Muted: Cosmedicine uses a pastel color palette, combining it with touches of metallic for an added punch.
primaries and fluorescents. However, there is a trend toward pastels and muted tones—pinks, lavenders, peaches and minty greens, often paired with black type. Premium skin care brand Cosmedicine is employing this color palette, combining it with touches of metallic for an added punch. Gradients: Soft gradients are also in vogue. Japanese bath and body product brand Sai-sei uses a beautiful teal to white gradient that dissipates as you go up the tube. The result is a look that evokes hydration, which is the core benefit of the product. Skin care brand Tatcha is using the same color gradient in several of its moisturizers.
Ultra Transparency In the luxury space, transparency and colored glass is canon, especially for fragrance and skin care brands. There’s something authentically
elegant and honest about seeing the formulation inside. Taking this a few steps further, there is a movement of using transparent bottles and placing the raw hero ingredient inside. Several indie bath and body brands, and even established brands such as Nars, are using this method. The ingredient, usually a flower, appears to be suspended in the liquid, creating a magical effect. A good example of this technique is Nars’ Monoï Body Glow II Beauty Oil.
Typography Typography has an inherent voice without saying a word. Traditionally, luxury brands have used serif and ornate script typefaces, often adding extra embellishments to convey refined classicism. These typefaces are safe choices that have stood the test of time. Sans serif: Newer brands are redefining the typographic language of luxury with sans-serif typefaces and simplified compositions. Brands such as La Prairie, Prismologie and Herbivore Botanicals are using sans serif typefaces similarly—as all caps with generous tracking and abundant space, yielding an airy, sophisticated look. Whitespace: In order to achieve this, it is vital to simplify your copy to the absolute essentials across all applications. This starts on your packaging, with simple product names and benefits. Don’t over-explain. Instead, be provocative and create intrigue with smart naming and copy writing. Remember, in most cases, the only elements on your primary package are the logo, product name and required information. Your typography is doing all the work, so it must be on point.
Imagery
Transparency: There is a movement of using transparent bottles and placing a raw hero ingredient inside, as seen in Nars’ Monoï Body Glow II Beauty Oil.
Imagery plays a big role in creating the luxury experience online, in-store and in print collateral. The canon is to use highly stylized, surrealistic and dramatic photographic techniques, offering consumers an escapist experience. These images are the result
Whitespace: Brands like Herbivore Botanicals are using sans serif all caps with generous tracking and abundant space, yielding an airy, sophisticated look.
of highly produced photo shoots, used in seasonal campaigns, advertising and core website pages. Consistent image treatments: In this age of Instagram and Snapchat, luxury brands must be generating new content daily in order to engage with their followers. For this everyday social imagery, we are seeing brands develop unique photo treatments using consistent filters, background colors or lighting techniques to create a unified feel. These treatments not only allow companies to assert a distinct point of view, but also to establish easy brand recall among their followers.
Finding the Opportunity To a certain extent, brands must be aware and adhere to the canons of luxury branding in order to compete and cater to customer expectations. However, companies that are truly innovating are redefining what luxury means by starting new trends that go against the grain. There is still plenty of opportunity and untapped potential in the market. Find and seize the relevant visual opportunities in your product category, and your brand will be poised for success. n
SHERI L KOETTING (sheri@ mslk.com) is the co-founder and chief strategist of MSLK (http://mslk.com/ beauty-packaging ), a marketing and design agency based in New York. MSLK specializes in helping beauty brands find their voice in today’s crowded marketplace through 360° brand positioning—from overall brand strategy to brand identity, packaging, retail experience, websites and social media campaigns.
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SKIN/SUN/ANTI-AGING Global Skin Care Market: Driven by Innovation The global skin care industry (F-1) is experiencing new product and ingredient innovations that point to continued growth. One of the most prominent drivers is the expansion of consumer skin care rituals. Earlier this year, while speaking at a CEW event in New York, Priya Venkatesh, VP/DMM skin care/hair care and merchant product innovation at Sephora, noted that, while Americans may never adopt 15-step skin care rituals, they will be open to easy, quick-acting solutions such as essences, if presented with the right opportunity. Google data appears to back up Venkatesh’s insights, particularly in the area of masks. The tech giant released data that showed the top 10 mask-related skin care videos in the United States, France and Japan received 98 million total views in 2016. In addition, consumers worldwide appeared to be seeking mask solutions beyond the face, including the lips, body and heels, as well as more novel ingredients such as carbonated formats and Aztec clay. Meanwhile, consumers are also increasingly adopting facial oils like the Exfoliate & Nourish
Global skin care market by region, 2016; F-1. courtesy of Euromonitor International Asia Pacific $58.90 billion Eastern Europe $4.20 billion Latin America $7.90 billion Middle East and Africa $4.10 billion North America $18.90 billion Western Europe $20.20 billion
Oil Scrubs by St. Ives, and serums, such as Resist Omega+ Complex Serum by Paula’s Choice. Ingredient companies are offering new innovations to support the expansion of skin care rituals. For instance, Vantage/Lipo Chemicals recently introduced its Lipobead Detox with Charcoal, which can be applied in skin care (purifying clay masks, pearlized cleansers, etc.), baby care, and bath and shower products. The system encapsulates activated charcoal within the naturally derived cellulose Lipobead, which rubs out completely when applied to the skin. The action creates a visual effect for the consumer, signaling that dirt, oil and toxins are being drawn out of the skin as the appearance of pores is minimized. Skin care is also a significant category for natural positioning as consumers and retailers continue to scrutinize product labels more intensely. The trend has led to the launch of premium and mass products as diverse as ScandiDerma’s Cˇuvget product family, which are powered by Arctic chaga, a cold-resistant fungus that can reduce the oxidative damage to human skin, to the mom-andbaby-positioned Boppy Bloom Skincare Collection, which comprises coconut oil, vitamin E and shea butter. Natural innovation has also spurred a range of new launches from ingredient suppliers. For instance, BASF has introduced Collalift 18, an extract of African mahogany bark, which reportedly improves the skin’s elasticity and visibly reduces pores, lines and wrinkles, and the botanically derived Dermagenist, which helps diminish visible signs of aging by improving skin density and firmness through an epigenetic pathway. And IBR
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Ltd. has launched IBR-CalmDeAge (INCI: Glycerin (and) Water (aqua) (and) Phoenix Dactylifera (Date) Seed Extract), which allows skin to rest, relax, revive and rejuvenate by slowing down cell proliferation and the effects of environmental aging factors. IBR-CalmDeAge also provides antioxidant protection, relief from rosacea and reduction of dark circles. Meanwhile, suppliers have introduced ingredients that offer new levels of functionality and efficacy. For instance, Vantage/Lipo Chemicals’ PreBio Defense is a biomefriendly combo of encapsulated polysaccharides that “act as a powerful food supplement and conditioning agent for the habitation of beneficial microorganisms found on our skin,” according to the company. The system can be applied in serums and facial creams for preventative skin care. Also in the microbiome-friendly arena, Givaudan’s Revivyl (INCI: Propanediol (and) Orobanche Rapum Extract) is a skin renewal accelerator that protects epidermis stem cells, reactivates cellular metabolism, stimulates epidermis cell differentiation, reinforces the skin barrier, reactivates natural exfoliation and protects the skin microflora. Meanwhile, Hallstar has introduced Micah, a sun care and anti-aging ingredient, which reportedly halts the photo-aging
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Ingredient companies are offering new innovations to support the expansion of skin care rituals. process before it begins. “Independent clinical research shows that Micah, unlike sunscreens or antioxidants, prevents 100% of free radicals, ROS, inflammation, and DNA damage from UVA and visible light, at a use level of only 0.2%,” said Robert Hu, vice president of R&D at Hallstar. n
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SKIN/SUN/ANTI-AGING
U.S. Skin Care Market: Driven by Natural Trends U.S. skin care retail sales in 2016 were valued at about $20 billion, according to new data from Kline Group.* This represented 4% growth, year-over-year, led by top growth segments, which were, in descending order:
F-1. Sales share of skin care categories, 2016;
data courtesy of Kline Group
• Men’s skin care • Sun care • Facial treatments • Hand and body lotions • Baby care products For sales share of skin care categories, see F-1; for sales share of skin care segments, see F-2. In the mass category, the largest in skin care, new players such as SheaMoisture have launched products, including baby care, according to Naira Aslanian, project manager of Kline’s consumer practice. Retailers like CVS are also introducing their own baby care, typically with a natural or organic positioning. Natural positioning dominates the prestige space, meanwhile, where brands such as Tatcha and Honest Beauty boast double-digit growth, according to Aslanian. In addition, natural positioning is propelling the expanse of Lush’s retail expansion. Meanwhile brands such as Rodan & Fields and Neurium International have succeeded by leveraging social selling in the direct-toconsumer space. n
F-2. Sales share of skin care segments, 2016;
data courtesy of Kline Group
*www2.klinegroup.com/cosmetics
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The Beauty Shield Collection by e.l.f. includes the Vitamin C Shield Pollution Prevention Serum($16), Skin Shielding Moisturizer SPF 50 ($12), Skin Shielding Primer SPF 50 ($12), Daily Defense Makeup Mist ($8), Dual Defense Cleansing Facial Brush ($8), Recharging Magnetic Mask Set ($24) and Massaging Overnight Recovery Cream ($14). This collection is meant to prevent the signs of aging, sun damage, and dullness and dryness due to environmental stressors. Key ingredients: Carrot seed oil, sunflower seed oil, vitamin C, vitamin E and argan oil.
The Sunless Tanning Collection by Comodynes includes Sunless Tanning Towelettes ($15) that allow for a portable color fix that can be used on the face and body. The towelettes include ingredients such as DHA Plus, erythrulose, and a moisturizing complex that contains butylene glycol and the film-forming polymer UCON 75-H-450.
Virospack has manufactured the packaging for Mined’Or’s Cellular Relaxing Treatment, a serum created specifically for beauty salons. The pack comprises a dropper with a white rubber bulb, silver metallized cap and a vial capacity of 3 ml; the standard bottle has high transparency that shows off the pipette, formula and white printing.
The Hydration Burst Collection by Botanics includes the Dual Action Cleanser ($8.99), which transforms into a soothing moisturizer that does not leave the skin feeling dry or tight; the Hydrating Day Cream ($15.99), which boosts moisture and soothes sensitive skin; the Burst Micellar Cleanser ($8.99), which is a non-rinse cleanser that removes makeup without leaving skin feeling dry; and the Light Serum (pictured; $15.99), which is a non-greasy formula that helps to restore the skin’s natural barrier. Key ingredients: Olive fruit oil, glycerin, water, panthenol, potassium sorbate. The line retails at Target.
The Rejuvenator Dry Oil Emulsion ($78) by C2 California Clean is a moisturizer and antiaging oil that uses bioactive ingredients to boost cell and collagen production. The dry oil provides inside and outside protection for the skin and does not leave a greasy feeling after use. Key ingredients: Swiss apple stem cells, water, glycerin, olive glycerides and sunflower seed oil.
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HAIR SoCozy’s Hush: Breaking the Cycle of Sensitivity When New York children’s salon owner Cozy Friedman launched her SoCozy line of clean, salon-quality kids hair care in 2002, retailers were unsure of how to merchandise the line. However, as products aimed at children and their parents have grown in sophistication, distribution channels have caught on. Today, SoCozy retails at Target, CVS, Walgreens, Old Navy, Toys R Us and Babies R Us, BuyBuy Baby, grocers, salons and numerous others. In 2015, the brand was in 1,883 doors; in 2016, that number rose to 7,724. Today, the brand is in roughly 8,000 doors. Speaking with Global Cosmetic Industry, Friedman noted that the digital landscape has leveled the playing field for smaller brands like hers, allowing SoCozy to viably compete on a national level. Today, the brand’s range includes the easy, multifunctional Cinch products; Behave styling products; Boo! lice prevention hair care; Boing curl care; Splash post-swim care; and the new gentle hair care line, Hush. The Hush range is in line with a wider trend of skin care trends migrating into the hair space, particularly regarding sensitivity. Hush comprises Sensitive 2in1 Soothing Shampoo + Conditioner ($9.99), Sensitive Scalp Serum Balancing Treatment ($9.99), Sensitive Leave-in UltraGentle Detangler ($9.99) and Sensitive Styling Foam Natural Hold ($9.99). Roughly half of the population suffers from some level of sensitive skin that is still developing, said Friedman. The issue is more acute for babies and toddlers who have uniquely thin and delicate skin. Friedman consulted with Dr. Dendy Engelman, a board-certified dermatologist, to build the Hush range and, in her words, break the cycle of sensitivity. The line comprises a proprietary blend of six ingredients that help balance the skin’s pH levels to hydrate and nourish the scalp. In addition, the tube of the Sensitive 2in1 Soothing Shampoo + Conditioner features a soft massaging brush that “helps to lift away dirt, flakes and oil, plus supports the increase of micro-circulation and oxygen to the root,” according to the brand.
SoCozy has introduced the Hush line of baby hair care products for sensitive skin.
formulated without parabens, sulfates, synthetic colors, propylene glycol, formaldehyde, alcohol, gluten and nuts. Friedman explained that the concept of “clean” products has begun to trump aspects such as natural or organic. People (particularly millennials) are committed to wellness and living cleaner, healthier lifestyles. Parents inherently want what’s best for their children, and this includes the products they use on their hair and body. The brand’s formulations—which adhere to the California Safe Cosmetics Act of 2005—are built to allow parents to feel good about every ingredient listed on the bottle.
2. Efficacy
Retailers are beginning to build kids sets and baby sets in response to an emerging consumer demand, said Friedman. But success required that her brand fulfill a number of key considerations.
These parents also demand that products work, Friedman noted. So, leveraging an expert panel and insalon testing, SoCozy has developed a problem/solution positioning. The company’s salons, located on the Upper East and West Sides of Manhattan, recently celebrated their 1 millionth haircut, according to Friedman. Each customer interaction creates new knowledge for the brand regarding consumer issues, as well as the effectiveness of various products and techniques. In addition to optimizing formulas, the salon experience has allowed Friedman to customize SoCozy’s packaging. The products are designed with flip caps that can be opened with a thumb, allowing parents to deploy product with just one hand. The brand also uses spray nozzles that deliver the optimal amount of product, compared to a standard pump.
1. Clean Formulations
3. Authenticity
Friedman noted that millennial moms are well-informed by influencer videos, product reviews, etc., and averse to conventional chemicals. As such, the SoCozy range was
Finally, Friedman explained that today’s moms care about the authenticity of the brands they buy. As a result, SoCozy has created relationships with about 1,500 kid-centric
3 Keys to Building Kids Hair Care for Today’s Parents
52 Hair Global Cosmetic Industry | July/August 2017
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influencers like Boston Mama (“GUYYYYSSSSS this stuff works like magic.”) and #curltalk SoCozy ambassadors Katie Salzano and her daughter, Kaia. Influencer-crated content is central to SoCozy’s marketing strategy, said Friedman. These unpaid influencers must love the brand and have real issues they’re trying to solve for their kids. This generates genuine feedback, photos and other content that the brand is able to leverage in its social media channels and blog. The small-scale nature of its partner influencers, which typically are in the range of 10,000 followers, allows SoCozy to have a more intimate connection with followers. Friedman explained that, importantly, the brand has real relationships with its influencers and salon clients,
n.
allowing SoCozy to hear directly from them what they want and are looking for in their products. The brand is able to incorporate this feedback into its product development.
The Next Phase of Growth SoCozy continues to listen to what consumers want for their babies and children, and watch emerging trends in adult hair care to understand what innovation it can next deliver to the category. The brand will continue to push its position in the clean product space across the salon, specialty food, drug and mass channels, including Amazon. Meanwhile, SoCozy has a number of new and differentiated products in the pipeline for 2018 and beyond. n
Moroccan Mud-Poo by Shea Terra Organics ($16) is a natural hair wash that produces healthier, livelier hair, according to the brand. The shampoo deep cleans and detoxifies the hair using an ancient clay mineral. The herbal blend massages dirt away and leaves hair feeling soft and smooth. Key ingredients: Moroccan lava clay, USDA certified organic olive oil, cold pressed carrot seed oil, rosemary essential oil, cold pressed watercress oil, cold pressed henna oil, cold pressed calendula oil, marshmallow root. PK4 Dietary Supplements by Philip Kingsley ($44) comprise a soy protein enriched with amino acids that are reportedly beneficial for improving hair growth, health and quality. The supplement is notably helpful for those who do not get enough protein in their daily diet. Key ingredients: Soya Protein Isolate Powder.
Yonwoo’s Powder Spray dispenses powder via a dip tube that moves when the actuator is pressed in order to shake up the powder. This avoids powder hardening issues. The innovation can be applied to cosmetics and personal care formulations, including dry shampoo. www.GCImagazine.com
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Albéa’s Reflexion all‑plastic barrier laminate tube features a metallic effect that can have mirrorlike reflections, shaded reflections, and brushed aluminum and hot stamp effects. All effects are done with ink with no hot stamping. The packaging is appropriate for skin care and hair care.
The Keratin Complex PicturePerfect Hair Bond Sealing Masque ($35) deep conditions hair for a smoother, shinier finish. It also uses a moisturizing butter that penetrates the cuticle and seals the bonds of the hair to retain moisture and strengthen locks against environmental stress. Key Ingredients: Aloe leaf juice, olive oil, moringa oil, macadamia oil and avocado oil. Hair 53
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MAKEUP Milk Makeup & Becca Cosmetics: Burning the Playbook Milk Makeup and Becca Cosmetics are a study in contrasting success stories. Both are fun, fashionable and digital-first, but the similarities end there. Milk is a from-the-gut, expansive brand that is willing to explore any product category its consumers will support, while Becca is a data-driven, tightly curated brand powered by just a handful of hero products. These were among the subjects covered during Fashion Group International’s (FGI) “Pioneering Beauty” event in New York, which featured a panel comprising Emily Dougherty of Elle, Robert DeBaker of Becca, Verane De Marffy of YSL Beaute, Dianna Ruth of Milk Makeup and Linda Levy of Macy’s.
Milk Makeup’s Holographic Stick is an icon in easy, multifunctional, genderless beauty.
Becca Cosmetics: Burn the Playbook Without a great product, neither a pioneering brand nor a legacy player can hope to succeed in beauty, said DeBaker. At the end of the day, he said, the products must be a winner on performance. The perfect example from Becca Cosmetics is the Shimmering Skin Perfector, which is a workhorse for the brand, offering the efficacy consumers expect. Becca initially launched digital-first out of simple financial necessity. The brand had just 4,000 Instagram followers at the time, a number which has climbed above 1.7 million today. DeBaker noted that Becca could activate sales on Instagram and track sales activity following postings in channels such as Sephora.
About 80% off Becca Cosmetics’ sales come from just a handful of SKUs, ensuring that Becca will never be a 300-SKU brand; pictured are the brand’s Liquid Crystal Glow Glosses.
The brand also engaged influencers to expand its reach, leading to more product sales gains. Wherever the consumer went, Becca went. DeBaker still holds to that formula, pledging to be wherever his consumer is and to speak to her however she prefers. The executive likened the approach to the different ways various friends might like to socialize—one wants a quiet coffee, while another may want a night out in the club. This requires a willingness to burn the playbook every year or two, said DeBaker, who noted that the influencer strategies of recent years no longer work. Of course, he said, this puts lots of stress on the organization and product pipeline, but this is how brands stay competitive. Now, having been acquired by Estee Lauder, Becca is able to expand globally at a rapid clip. Still, the brand is focused on the productivity of its investments because “cash is king.” Becca continues to keep its product assortments to a tight minimum, driven by heroes that can be marketed across multiple retail channels. In fact, DeBaker said that about 80% off its sales come from just a handful of SKUs, ensuring that Becca will never be a 300-SKU brand. As for the future, Becca is aligning itself to be digital first, brick-and-mortar second. As a result, said DeBaker, the brand is focused on boosting content merchandising and sampling, and directing human capital toward digital.
Milk Makeup: Beyond Color Ruth noted that Milk Makeup’s founders surveyed existing products, particularly in the professional makeup space, and realized that nothing on the market spoke to them. Understanding that the core audience for the brand wanted to do their makeup quickly and easily became inherent in its DNA. Milk Makeup is engineered for creative men and women, said Ruth, and has always stayed true to that core. As a result, since pitching the brand to Sephora two years ago, Milk Makeup has taken off. Today, the brand has created specific SKU sets and exclusives for its two key retailers: Sephora and Urban Outfitters. Milk Makeup has expanded far beyond color with a wide range of SKUs in an array of categories, including dry shampoo and deodorant. Why? Because Milk is fundamentally a lifestyle brand. In the future, said Ruth, Milk could expand beyond beauty to feminine care, ingestible wellness products, vitamin sprays and even water. There are no limits to where the brand could go next. The brand tends to eschew data in favor of gut instincts, said Ruth. The company and its employees are relatively young, and it’s the employees themselves that inspire each new SKU. As Ruth put it: they are the consumer and the brand.
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Milk Makeup also appears less interested in following the consumer than it is in leading them with new launches, which aren’t inspired by conventional trend data or insights. In addition, 100% of its marketing comprises videos and other content generated by employees and the founders, as well as tutorials. Milk Makeup is also unconventional in its genderless approach to marketing its products. Many men purchase the brand’s makeup and skin care, seeking the same thing women want: undetectable beauty products. Ruth explained that men tend to like products like the Blur Stick in order to address their texture issues or post-shave irritation. In the end, all that matters are ease of use and high functionality, with ingredient contents a lesser but significant concern that is increasingly shared by men. As someone in the FGI audience pointed out, it’s tough to remain “cool” over time. Ruth noted that Milk will continue to pursue instinctive innovation and mentor a new generation of staffers to power new ideas. n
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From left: Verane De Marffy, YSL Beaute; Linda Levy, Macy’s; Emily Dougherty, Elle; Dianna Ruth, Milk Makeup; and Robert DeBaker, Becca Cosmetics; photo credit: Eric Michelson.
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MAKEUP
Baralan’s Link overcap allows two to four makeup or nail polish products to be connected. The system offers a solution for multiple packaging and can be paired with 8- and 10-ml Baralan Mina bottles. The company has also unveiled its Baralan News App, which is available on the Google Play store and Apple App Store. Anisa International is celebrating 25 years of brush-making and cosmetic tool design. The company recently launched three patent-pending fibers as part of The New Naturals, which include substitutions from squirrel, goat and pony hair. Anisa Telwar Kaicker, founder and CEO of Anisa International, said, “It is the friendships and partnerships I have garnered over the years that have given my company the support and encouragement to keep going. It was a very humble startup 25 years ago as I was not formally trained to build a business, but with the assistance and shared opportunities of my peers within the industry—I learned a way to grow this global organization that I truly take pride in.”
Clarisonic has introduced the Sonic Foundation Brush ($35), a micro-blending device that generates 18,000 micro-blends per minute to create an airbrushed effect with any liquid foundation, concealer, contour/cream stick, highlighter, color correcting primer or cream blush. The brush absorbs small amounts of the foundation, which prevents clumps, reduces waste and allows for better coverage, according to the brand. The foundation brush head can be combined with any Clarisonic device to create a 2-in-1 cleansing and blending tool. The tool retails at Ulta.com.
Sweat Cosmetics’ 3-in-1 sweat-resistant mineral foundation ($42) leaves skin with a heathy glow. Available in five shades, the loose sunscreen powder is packaged in a compact jar and helps to protect and repair active skin. Ingredient highlights: 16% zinc oxide, milk thistle, vitamin E. The SKU retails at www.sweatcosmetics.com and www.sephora.com.
The Manicure Kit, Pedicure Kit and Pedicure Pro Kit by Safe-T Nails ($4.99/each) are waterless systems that reduce the amount of chemicals washed down the drain, while reducing the risk of infection through single-use kits. The Manicure Kit includes a pair of plastic gloves that contain an active cream cuticle softener, moisturizer and hand sanitizer, disposable towel, nail stick, nail file, and nail buffer. The Pedicure Kit includes a pair of plastic socks containing active cream, disposable towel, nail stick, nail file and nail buffer. The Pedicure Pro Kit includes the same as the Pedicure Kit but also provides a plastic cover with a buffing pad.
The industry and consumers are increasingly focused on the customization of beauty products. Ofra Cosmetics has responded to this growing trend by launching its customizable magnetic Pop-Up Palette, which houses magnetic makeup godets that can be tailored and rearranged for personal preference, while offering hands-free makeup application. The palette holds 48 g of product and retails for $21; the magnetic godets retail for $10.
56 Makeup Global Cosmetic Industry | July/August 2017
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MAKEUP
Estée Lauder has announced the launch of an augmented reality- based (AR) product try-on that is supported by ModiFace’s Light Field Rendering technology. Shoppers on the brand’s web and mobile websites can virtually try on products in different shades on a photo or live video while viewing the product on the brand’s e-commerce product pages.
The Wild Nudes Collection ($9/each) features nine sheer and nude nail polish colors, including Skinny Dip, a light peach pink with a hint of black; Bare with Me, an apricot tone with a gray cast; Wild Nude, a light tan with a wash of white; Without a Stitch, a light gray; Mooning, a light blue with black undertone; Exposed, a mossy green with white overcast; Truth or Bare, a light cinnamon brown with hint of red; Clothing Optional, a natural sienna brown; and Winning Streak, a dark purple with grayish tone.
Sun Chemical’s Ecocert SunPURO oxides have now achieved COSMOS approval. The COSMOS approval helps protect people and the environment by confirming ingredients are safe for human health and are sustainable. “Our SunPURO pigments are produced with the highest quality standards resulting in heavy metals levels that surpass global regulatory requirements,” said Kelly Dobos, cosmetics technical manager, Sun Chemical. 58 Makeup Global Cosmetic Industry | July/August 2017
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BATH/BODY/GROOMING/ FRAGRANCE
Wally’s Natural has launched its on-the-go Organic Body Oil Roll On ($9.99), which reportedly reduces the appearance of scars, stretch marks and dry skin. The quick-absorbing formulation leaves no greasy residue and is free of mineral oil. Ingredient highlights include sesame, chickweed and calendula oils. The SKU retails at Walmart, Whole Foods, GNC, select baby shops and the brand’s own site; the SKU was recently approved for CVS. The company’s signature product is the ear candle and oil, which can be used hand-in-hand to calm and relax consumers. The products have a strong business in the spa channel and Latin America, according to the company. Future products may include scrub products for kids, as well as an expansion into Safeway.
Carestia Arcade Beauty has debuted a new innovation for brand promotion, the Scented Sticker. The stickers are made from a fragrance card that can be printed, embossed or hotstamped with a customers’ specific image or logo, and can be cut into a desired shape. The stickers are offered individually or as a decorated sheet and can be applied to paper, metal, plastic, glass or wood. www.GCImagazine.com
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Belle Aire Creations has introduced two proprietary and patented technologies to meet the demands of managing malodor for personal care, beauty and home care. Applications could include the control of body and mouth odor, household and pet odors, the smell of ammonia from hair coloring and more. Total Malodor Management (TMM) and TMM Natural were developed to modify, neutralize and eliminate poor smells on contact with more than 90% malodor counteraction efficacy. The technologies are beneficial to manage a range of issues, including body/foot odor, mouth odor, ammonia from hair coloring, gym and sport clothing odors, and product-based notes. “Until now, masking and specifically targeted malodor counteraction strategies have been the best option to combatting and managing malodors,” said Don Conover, president of Belle Aire Creations and scientist and master perfumer behind the development of this technology. “Our multidimensional TMM and TMM Natural formulas contain a set of uniquely performing ingredients that work together synergis tically to reduce malodors.” The company also continues to experiment with “effective controlled-release systems with increased, longer-lasting malodor reduction.”
c i w C T S E
o ( c c ( A w g
w m e A i a h
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Elé Corporation’s Pel-Amph ALP is a vegetable-derived mild co-surfactant with broad regulatory approvals and a good INCI: Arginine Lauraminopropionate. Arginine has enjoyed positive press for its contributions to mild shower gels, bubble baths, cream soaps and shaving foams in which it offers good wetting and foaming. PelAmph ALP is already on the market in an undisclosed male grooming shampoo.
60 Bath/Body/Grooming/Fragrance Global Cosmetic Industry | July/August 2017
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Wellness has been driving a wide range of beauty and personal care concepts. Now, Fytt, a new skin care brand that takes its inspiration from the juicing trend and seeks to bridge skin care and wellness, has introduced the Green Juice Body Scrub Treatment Collection, comprising the Hit Restart Detoxifying Body Scrub Treatment ($54, 15 fl oz/443 ml; available at FyttBeauty.com), Gain Strength Antioxidant Body Scrub Treatment (coming soon) and Boost Energy Energizing Body Scrub Treatment (coming soon). Hit Restart offers a “detox blend” containing USDA-certified organic kale (for nourishment with vitamins A, C and K), spinach (for antioxidant-powered environmental protection, spirulina (B complex vitamins for skin revitalization), cucumber (anti-inflammation components such as vitamin C and beta-carotene) and flaxseed (minerals for cleansing and detoxification). The Gain Strength Antioxidant Body Scrub Treatment comprises beets, berries and kiwi, while the Boost Energy Energizing Body Scrub Treatment contains ginger and carrot. The blend, which is recommended for use two to three times a week, exfoliates, detoxifies and nourishes for smoother, softer, firmer, more vibrant skin, according to the brand. The product’s texture evokes its juicing concept and packs a mint-cucumber fragrance. As part of its mission to deliver nutrition to the skin, Fytt has unveiled its 10-Free No Toxins Promise, which excludes parabens, SLS and SLES, propylene glycol, mineral oil, PEGs, triclosan, DMDM hydantoin, DEA, TEA and MEA, BHA, and synthetic fragrance. “Being in the industry for more than a decade, we know that many skin care products in the marketplace boast trendy ingredients and are short-term solution-oriented,” said Founding Partners, Kellie Chen and Kevin Vu. “They’re not focused on the essential nutrients your skin needs to stay fundamentally healthy in the long-term.”
Quadpack’s wooden cap has been applied to the bottles of Guerlain’s feminine fragrance range, L’Art et al Matière. The bottles were designed to showcase clean, contemporary lines and feature a golden metal plaque. The wooden caps are made of beech from certified sustainable forests, and are lacquered with an amethyst color and finished with a matte varnish.
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PRODUCTS and SERVICES
showcase
CONTRACT MANUFACTURING
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kjednachowski@allured.com • 1-630-344-6054 62 Products and Services Showcase Global Cosmetic Industry | July/August 2017
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AD INDEX The Advertiser Index is provided as an additional service for readers to obtain information on companies and their products. The publisher assumes no liability for omissions or errors.
PAGE
ADVERTISER
35
Albéa Group
13
AMA Laboratories, Inc.
1-845-634-4330
www.amalabs.com
49
Anisa International, Inc.
1-404-869-6475
www.anisa.com
Aware Products
1-818-206-6700
www.awareproducts.com
Baralan USA
1-718-849-1600
www.baralanusa.com
15
Bioscreen Testing Services
1-310-214-0043
www.bioscreen.com
11
Biosil Technologies, Inc.
1-201-825-8800
www.biosiltech.com
58
Classic Cosmetics, Inc
1-818-773-9042
www.classiccosmetics.com
29
Clinical Research Labs, Inc.
1-732-981-1616
www.crlresearchlabs.com
Cosmetic Group USA, Inc.
1-818-767-2889
www.cosmeticgroupusa.com
Cover 2
Cosmopak USA/Cosmopak Europe
1-516-767-9119
www.cosmopak.com
Cover 3
Fusion Packaging
1-214-747-2004
www.fusionpkg.com
HCP Packaging
1-203- 924-2708
www.hcpackaging.com
Identipak Inc
1-956-630-4403
www.identipak.com
28
Inoac Packaging Group, Inc.
1-502-348-5159
www.inoacusa.com
57
Kisaco Research/Beauty & Money
51
Lady Burd
1-800-345-3448
www.ladyburd.com
23
Lipotec, LLC
1-201-850-1213
www.lipotec.com
47
Luxe Pack Monaco
33-474-731-693
www.luxepack.com
39
MakeUp in New York
1-609-683-3952
www.makeup-in-newyork.com
Mane USA
1-973-633-5533
www.mane.com
21
McKenna Labs
1-858-581-6888
www.mckennalabs.com
61
McKernan Packaging Clearing House
1-775-356-6111
www.mckernan.com
25
MORRE-TEC Industries, Inc.
1-908-688-9009
www.morretec.com
45
Reed Exhibitions/in-cosmetics NA
22
Simplex Filler Co., Inc.
1-707-265-6801
www.simplexfiller.com
60
Spectra Colors Corp.
1-201-997-0606
www.spectracolors.com
59
Sun Deep Cosmetics, Inc.
1-800-985-2228
www.sundeepinc.com
U.S. Nonwovens Corp.
1-631-952-0100
www.usnonwovens.com
Verescence
1-212-753-4200
www.sgdgroup.com
Welch Holme & Clark Co., Inc.
1-973-465-1200
www.welch-holme-clark.com
YonWoo/PKG
1-631-981-8701
www.pkggroup.com
3 Cover 4
1
55 17, insert
7
5 27 9 33
PHONE
WEB SITE www.albea-group.com/en
www.beautyandmoneysummit.com
www.in-cosmeticsnorthamerica.com
Trends, insights and breaking news every business day: www.GCImagazine.com/newsletter 64 Ad Index Global Cosmetic Industry | July/August 2017
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DIGITAL EDITION EXCLUSIVE
THE STATE OF
BEAUTY STARTUPS FounderMade Beauty highlights what it takes to launch and grow a compelling brand in 2017. | BY JEB GLEASON-ALLURED, Editor in Chief
F
ounderMade Beauty recently presented a look at the world of independent beauty startups, including founders, investors and retail leaders. Like FounderMade’s Wellness Summit, the event pointed to the key trends shaping the industry.
Beauty Startups: 1989 vs. 1992 vs. 2011 vs. 2013 vs. 2017 1989
Though Howard Murad, M.D., founded his namesake brand about 25 years ago at the age of 50, his brand’s journey offers lessons to today’s beauty startups.
Though Howard Murad, M.D., founded his namesake brand about 25 years ago at the age of 50, his brand’s journey offers lessons to today’s beauty startups. Speaking as part of the recent FounderMade Beauty event in New York. Dr. Murad recounted his progression from pharmacist to doctor to entrepreneur, including his adoption
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of an esthetician at his dermatology office and the launch of his original day spa. Rather than a flash of innovation, the Murad brand was built through a gradual evolution as skin care expanded beyond the traditional three-step cleanse, tone and moisturize dynamic. Early on, he said, dermatologists were treating ailments, such as psoriasis, but had less capacity to deal with pigmentation spots, wrinkles, etc. Dr. Murad began to prescribe compounded prescriptions that he customized for his patients. These compounds became the core of his brand, becoming an early booster of AHA in skin care. Expanding his services beyond his practice, Murad hired consultants and a lawyer, who warned him against anti-wrinkle and pigmentation claims. He added that the worst naysayer is oneself, though there are always plenty of people willing to tell entrepreneurs why their businesses won’t work. Undeterred, Dr. Murad saw that while competition was strong in mass market skin care, there were few cosmeceutical treatments available for consumers. If founded today, Dr. Murad may have leveraged the resources of a VC or Kickstarter campaign, but in 1989 he was forced instead to mortgage his house—twice. The founder built
Celebrity hair stylist, Harry Josh, founder of Harry Josh Hair, started his brand in 2013. Josh noted that he’d received offers to launch hair care “wet goods,” but that he believed the market already too saturated with “great products.”
his business slowly, across salons and doctor’s offices, but soon realized he needed to broaden distribution. At trade shows, Dr. Murad found it difficult to sell his scientific message regarding the benefits of harshsounding ingredients such as glycolic acid. So he hired some DRTV experts, created new packaging and launched an infomercial that featured two sisters—one who’d used Dr. Murad’s products, and one who hadn’t. The spot
Bobbi Brown founded her namesake beauty brand in 1992 and helmed it for 27 years.
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was, in Dr. Murad’s words, “a disaster,” which sold few products. He went back to the drawing board with new DRTV experts and had much better success. In fact, Dr. Murad said that he couldn’t keep up with demand at first. And success had a downside. Salons, which often expected to have exclusive distribution of brands, were unhappy to see Murad products on television. But he persisted. Today, Murad is widely available at major retailers such as Sephora. And, in 2015, Unilever acquired Murad for an undeclared sum, adding to its stable of prestige brands, including Dermalogica, Kate Somerville and REN. The acquisition allowed Dr. Murad to transition to the next phase of his career and the brand’s positioning. Echoing the broader wellness trend impacting beauty, Dr. Murad has refocused his mission to help consumers improve diets, minimize “techno stress” related to social media saturation, reduce sedentary lifestyle habits, and diminish the sense of loneliness and social isolation consumers may feel in this day and age (EyesUp.com). As Dr. Murad put it, better lives lead to better skin.
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1992/2017 Bobbi Brown founded her namesake beauty brand in 1992 and helmed it for 27 years. Now, she finds herself an entrepreneur for a second time in a very different world. When asked to reflect the toughest part of founding a startup, Brown said: finding and hiring the right people. Initially, she sold her products out of house, then leveraged a serendipitous meeting with a Bergdorf Goodman buyer into a retail partnership. After that, Brown expanded to Neiman Marcus and, eventually, QVC, which helped with her brand visibility. She was also able to use her media presence, notably on the “Today Show,” to raise her brand profile. In addition, she kept her products the same, even as she expanded overseas. If she were to start the brand today, she conceded, she would likely have done things completely differently. For her next venture, Brown is developing a lifestyle brand that will encompass beauty from the inside out by leveraging elements of health and wellness. (If that’s not enough, she’s also opening a hotel in New Jersey.) On this point, Brown’s latest book, “Beauty from the Inside Out: Makeup, Wellness, Confidence,” offers a preview.
Carrie Gross, CEO and co-founder of Dr. Dennis Gross Skincare, noted that the brand, which bears her husband’s name, first got on the beauty map with its Alpha Beta Peel.
The lifestyle guide includes “beauty food recipes, fitness tailoring, recommendations on nutrients, and restorative yoga and mindfulness,” according to the publisher. In addition, Brown has piloted her lifestyle concept with a concept shop ant Lorde & Taylor, which features beauty products, supplements, ethical brands and athletic wear.
Pree Walia, founder of Preemadonna, manufacturer of Nailbot.
Brown told the audience that the synthesis of topical products and what one ingests will be the next beauty frontier, and added that consumers are also seeking simple choices.
2002 Carrie Gross, CEO and co-founder of Dr. Dennis Gross Skincare, noted that the brand, which bears her husband’s name, first got on the beauty map with its Alpha Beta Peel. Unfortunately, the product’s launch coincided with a widely popular episode of Sex and the City, in which the character Samantha uses a chemical peel, rendering her face an unsightly and painful mess. Gross noted that, if nothing else, the controversy got people talking about the polarizing treatment. The Dr. Dennis Gross brand was originally sold out of his clinic, then expanded across the professional channel for spas and estheticians. Having at-home products was a logical extension, Gross said, because “when you invest in your skin, you want products at home to protect your investment.” Beginning in the professional space also gave the brand
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CUTTING THROUGH THE K-BEAUTY CLUTTER Soko Glam bills itself as “the most trusted Korean beauty shop” by curating a slim, easily navigable selection of 27 brands, including Klairs, Neogen, Erborian, British M and Etude House. Chief curator Charlotte Cho co-founded the portal in 2012 with her husband with a mission to make beauty education more fun. (Interestingly, in a major pivot, Memebox recently repositioned itself as an education hub for K-beauty, ceding the bulk of sales and shipping to external retail partners.) Cho realized that K-beauty’s focus on high-quality products with affordable prices (aided in part by low-cost labor) satisfied a need in the U.S. market. But there was significant consumer confusion in the West. Because SoKo Glam was an early mover in K-beauty, it was able to establish relationships with some of the country’s biggest brands and became a go-to hub for consumers seeking products that they would actually use and which were genuinely effective. Today, Cho spends roughly one-third of the year in Korea to keep track of the rapid-fire market by visiting retailers, dermatologists and brands. The Korean beauty industry is proud of its proficiency, so experts are happy to share their insights. In addition to discovering new brands, Cho’s trips to Korea allow her to better tell product and brand stories, which are critical for consumer education.
K-beauty Education Cho noted that Soko Glam was born not only to cut through the clutter of launches coming out of Korea, but to help educate Western consumers about skin care. Compared to their Korean counterparts, it is generally understood that these consumers tend to have a more remedial idea of how to care for their skin. K-beauty offers a high level of innovation and unique products and categories. With the right education, Cho believed she could change Western consumers’ mindsets toward preventive skin care. Thus, she founded the Klog, Soko Glam’s informational platform. The blog includes education on skin care steps and routines, as well as insights into specific product categories. About 70–80% of the Klog’s audience is non-Asian, according to Cho.
What’s Happening in Korea? Korean beauty consumers have no brand loyalty, Cho told Global Cosmetic Industry. Shoppers are simply not replenishment-focused. As a result, Korean brands have to launch new products or even change packaging as frequently as every six months to maintain consumer interest. This atmosphere creates significant amounts of innovation. Cho cautioned, however, that not everything coming out of the K-beauty space is translatable to the West, whether for cultural or educational reasons. She added that focus groups are critical for ensuring brands are making the right decisions.
What the West Can Learn from Korean Retail For the Korean beauty consumer, it’s about the product and the experience, said Cho. Therefore, the market is filled with concept shops, such one brand that created drinks based on its core ingredients. K-beauty mainstay Etude House recently opened its flagship store, which featured several unique color experiences, including photo op areas in-store, a Personal Colour Studio that allows consumers to use a color meter to generate
SoKo Glam’s chief curator, Charlotte Cho, co-founded the portal in 2012 with her husband with a mission to make beauty education more fun.
a personalized color palette, and a Colour Factory that provides consumers with an opportunity to create their own lipsticks by choosing their preferred colors and design. Cho noted that Korea is densely populated, which supports a greater amount of brick-and-mortar retail spaces, compared to the United States. That said, Korea may be due for a retail reckoning—even K-beauty has its limits on demand.
K-beauty’s Impact in the West & What’s Next Over the last few years, K-beauty has expanded from a niche beauty junkie fixation to a mass market phenomenon. Today, K-beauty brands are ubiquitous, with SKUs turning up in retailers such as Walmart and CVS. Cho noted that, as U.S. consumers have begun to embrace K-beauty, she has built curation partnerships with retailers such as Sephora, Birchbox and Urban Outfitters. Cho added that some K-beauty brands have taken advantage of the less crowded U.S. market to stand out from the pack, while also benefitting from wider margins. For instance, Dr. Jart+ has created a significant market in the United States and has even created products specifically for the market. As for what’s next for K-beauty, Cho noted that brands are beginning to push beyond skin care to makeup that offers skin nourishment. She added that, eventually, the K-beauty dust will settle and the brands left standing will be those that can consistently deliver meaningful innovation for consumers both in Korea and abroad.
A Bootstrapper’s Advice Cho and her husband built Soko Glam out of their apartment in Korea, shipping products to the United States themselves. While that worked for a while, Cho said she received excellent advice: once you reach a certain scale, your time as founder is better spent on things other than operational matters like fulfillment. That advice led Soko Glam to hire a third-party fulfillment house, which allowed Cho and her husband to focus on more strategic elements of the business. In addition, Cho eventually admitted to herself that she couldn’t be involved in every element of the business, which allowed her husband to take certain tasks off her plate and enable her to be more strategically focused. As for her advice to startups? No is never no forever. n
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Lauren Wolk-Goldfaden, vice president of sales of Goldfaden MD Skincare.
credibility and elevated its products and treatments. The brand eventually expanded to Sephora, Nordstrom, QVC and elsewhere. When expanding overseas, Gross said it was critical for the brand to highlight benefits because the Dr. Dennis Gross name wasn’t as familiar outside the United States. Europe served as the gateway to the Middle East, she said, adding that in the age of social media, people want access to a product globally as soon as it’s launched because they’ve just seen the latest product on Instagram. Today, Gross answers consumers’ questions about skin concerns and offers tips and tricks on social media. She noted that the brand seeks to simplify skin science and translate Dr. Gross’ bedside manner via its digital communications. As for the future, Gross said that wearables will be the next big phases of skin care, as well as education for young women regarding the need to take care of their skin.
The brand is a family operation, according to Dr. Goldfaden’s daughter in law and vice president of sales, Lauren Wolk-Goldfaden. Speaking at FounderMade, Wolk-Goldfaden noted that the brand was built around transparency regarding ingredients and formulations. Like Murad, Goldfaden MD Skincare highlights the benefits of its ingredients, tough with a more
natural and sustainable positioning. The brand’s ingredient highlights include soy peptides for skin firmness, apricot kernel oil for moisturization and suppleness, avocado oil for hydration, and seaweed extract for tone and texture, as well as antioxidant protection. Wolk-Goldfaden noted that brands must be able to tell their story in just a few seconds and hit multiple touchpoints in the digital space with a consistent product story. Clean beauty is prompting extensive research and claims substantiation in natural ingredients, said WolkGoldfaden, and has allowed the brand to bridge the natural and physicianstrength skin care worlds. Today, the brand retails at Dermstore, Space NK, Credo and many others, and has secured distribution in Australia, Thailand, the United Kingdom and beyond.
2013 Celebrity hair stylist, Harry Josh, founder of Harry Josh Hair, started his brand in 2013. Josh noted that he’d received offers to launch hair care “wet goods,” but that he believed the market already too saturated with “great products.” Not wanting
2011 Goldfaden MD Skincare was founded six years ago and describes itself as, “The first physician strength, dermatologist developed, naturally inspired skincare line in the industry.”
What do retailers demand from brands in 2017? A strong foundation story, efficacy and safe formulas, and stand-out packaging.
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to compete with fantastic brands, he focused instead on tools because he felt that very little expertise has been focused on the space. Josh added that he didn’t want to slap his name on an existing technology. He wanted to have a brand with real longevity, with tools so good that consumers wouldn’t have to know the Harry Josh name to be enticed. Josh was adamant about having a plan before announcing his intention to launch a brand. The brand launched digital-only direct-to-consumer for the first four years. But once all of the diehard hair tool consumers were saturated, he realized there was a need to expand to brick and mortar. While profits inevitably dropped, overall growth continued. Harry Josh has even shown on HSN, which, while not a great boost for the business, engaged consumers who were unfamiliar with the name Harry Josh. Josh noted that he is a partner in his brand but, unlike many entrepreneurs, he isn’t the money source. He said he makes decisions based on his feelings and instinct, which can sometimes conflict with the “money people.” These gut moves include manufacturing Josh Gross hair styling tools in France, which far pricier than manufacturing in China. But, he said, he knew he had to trust his gut on key decisions. Brown interjected that the very reason people invested in Josh was his gut. Long-term, Josh said he believed his strategy was the right one as consumers begin to spend more money on fewer, better products. Josh added that his brand was born at the right time. In 2013, influencers were far less prominent than they are today. As such, Josh was able to bring his products to all of his photo shoots and was able to Instagram Harry Josh tools with models and celebrities— without spending a dime or going through intermediaries. This strategy would never work, today, he conceded. Timing is everything. Today, the Harry Josh brand produces difficult and easy versions of instructional videos in order to give
A rabid, engaged founder is a key element in attracting investors, a FounderMade panel explained.
consumers faith that they can style their hair themselves—whatever their skill level.
2017 During a product pitch, a panel of FounderMade Beauty’s experts heard a range of product pitches, including Nailbot, a device and app from Preemadonna, which allows consumers to design and print art onto their nails using their phone. The process takes “a matter of seconds,” according to the company and already has more than 30,000 people signed up on a waiting list to try the tech. Recently, L’Oréal included the firm in its beauty accelerator, perhaps to bring new excitement and customization into the nail sector. During the Nailbot presentation, Pree Walia, founder of Preemadonna, showcased the company’s technology, which works as follows: •. The consumer paints their nails with a light-colored base coat such as white to act as a canvas for the nail art. •. The consumer can then select imagery to apply to their nails. Consumers can use their own photos, emojis or their own art designs.
•. Once the imagery is selected, the user can place their fingers in the Nailbot application device to have the images printed onto their nails. The advantage for the technology, said Walia, is that it provides customized instant manicures, all powered by smartphone. The Nailbot hardware is being developed for a direct-to-consumer strategy, though the professional category could also be developed. The hardware, or the bots, will be available in several tiers targeted at both younger (simpler tech) and older (more sophisticated tech) consumers and will retail for between $99 and $299. The hardware can be cobranded, said Walia, and the digital interface customized as needed. Consumers can buy ink replacements for the machine. The ink is edible, according to Walia.
Get Your Distribution in Order What do retailers demand from brands in 2017? A strong foundation story, efficacy and safe formulas, and stand-out packaging. Consumers want to connect with a brand, said Sabeen Mian, head of brand partnerships and merchandising www.GCImagazine.com. Digital Edition Exclusive DE6
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for Ipsy. As a result, direct-to-consumer brands need to leverage their brand foundation story to create engagement. Creating a point of difference is critical, said Annamarie Daoud, VP of product and brand development at Ricky’s NYC. Often this is accomplished through a founder story. Mian noted that it’s critical to deliver performance and efficacy—and great packaging is more important than ever, because first impressions matter. Daoud concurred, noting that Ricky’s partners with 700 vendors with 35,000 active SKUs. In such a crowded marketplace, packaging must stand out. She added that Ricky’s relies on vendors for stand-out merchandising, including unique displays. Target’s Eric Carl pointed out that packaging is meant to be disrupting in aisle. He added that brands must understand how that packaging performs both in brick-and-mortar and ensure that it carries the weight of the brand in a digital context. Tara Foley, founder and CEO of Follain, said that above all else she focuses on specific safety criteria and her company’s restricted ingredients list. Once safety is confirmed, Follain focuses on efficacy, often putting products through their paces with estheticians and dermatologists.
Data-driven Beauty Sabrina Tan, founder of Skin Inc. Global, has a background in the tech industry and views the beauty industry through that lens. The customizable skin care brand features the Skin Supplement Bar, which allows consumers to easily build their own regimens based on their needs, as well as the online Skin Identity Check diagnostic tool. Tan has focused on simplifying skin care by leveraging technology and addressing skin care needs for every specific situation. Skin Inc. Global’s recent launches include the Vitamin B3+ Serum, comprising niacinamide, panthenol and hyaluronic acid, for minimizing pores and addressing
Shannon Vaughn, founder Pursoma, said that publicists can strategically talk to influencers and journalists and connect founders with writers that can tell brand stories in a coherent way.
pigmentation, as well as the hydrogel Multi-Masking Facial In A Flash series in a Bento Set, comprising the Soothen-Purify Black Gold Mask, Lines BeGone Rose Gold Mask and Get Glowin Platinum Mask. The masks come with top and bottom halves that can be mixed and matched for a customized mask for consumers’ specific needs. Tan explained that the multi-mask concept saved time by allowing consumers to provide different solutions to different portions of the face, simultaneously. The brand added a gold tone to the masks to make them more Instagrammable. Tan noted that consumer attention spans are so short that it’s critical for brands to get the fundamentals right. Data is critical to ensuring launches succeed. Suveen Sahib, co-CEO of Aquis, also has a tech background. Aquis retails hair towels and turbans to “simplify your hair care routine.” According to the brand, “Our products cut drying time by 50%, protect hair from frizz and prime it for effortless styling.” The brand retails at Sephora and elsewhere. During a FounderMade panel, Sahib stated that beauty needs to be driven
by data, particularly as consumers seek more definitive answers regarding product efficacy. Aquis will eventually expand into hair care products, based on Sahib’s comments. The co-CEO told the FounderMade audience that the future will be driven by biologyenabled beauty, optimized cellular performance, genetics-based beauty, water-efficient innovation and more. Sahib explained that Aquis has focused on the crowded, lowinnovation hair care space, specifically its friction points and how they impact split ends, hair health, styling, etc. In developing hair care, Sahib said that Aquis will focus on delivering fast results and personalized solutions that really work. He added that brands can no longer develop products in isolation and that it is critical to use data to develop products based on “real numbers” and to attain an understanding of consumers’ constant evolution. Sahib concluded that founders must create strong execution teams and a culture of challenge within startups. This will make an operation more scalable, he noted. This includes freeing staff to challenge founders
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and requires those founders to let go of certain tasks in order to focus on strategic growth.
Customization Unleashed Julie Bartholomew, founder of IMX Cosmetics, founder of IMX Cosmetics, discussed the future of customization. IMX comprises roughly 80 patents and is actively seeking to sell its portfolio, which includes cosmetic mixing stations, which have been tested at retailers such as Nordstrom and Barneys. The company’s technology be applied to customized mixing of beauty products including liquid and powder foundation, nail polish, lip gloss, lipsticks, cheek and eye color, skin care, etc. The company took its inspiration from the ways in which paint stores can easily customize paints in-store. IMX’s technology can be applied to in-store and at-home/mobile customization, as well as portable devices and wearables. Bartholomew said her company’s innovations could potentially create new ways to customize across the omnichannel by leveraging diagnostic tools for skin, augmented mirrors, etc. Being able to deliver this type of experience would be critical for
capturing generation Z, which is highly diverse, averse to ads and under the sway of micro influencers. These consumers seek control and want a say in the products they consume.
How to Get an Investor to Buy Into Your Dream During a FounderMade panel, an audience member from Goldman Sachs noted that they were seeking investment opportunities in beauty but were experiencing trouble with quantifying the strength of brands’ performance. The panel of investors had some insights for the attendee and brands. Larry Kahn, founder of Beechwood Capital noted that beauty is attractive to investors because it’s a replenishment business with light products. In addition, it’s easy for small players to get into the business, which offers high margins. While digital-first is the name of the game, Kahn pointed out that eventually growth will push most brands into the omnichannel. Parker Hayden, principal at The Carlyle Group, added that legacy companies can’t replicate what small companies are doing. Multinational brands conduct traditional branding and take as much as three years to
Julie Bartholomew, founder of IMX Cosmetics, founder of IMX Cosmetics, discussed the future of customization.
get products to market. In contrast, startups get products to market in six months or less, spend very little (if anything) on marketing and build their businesses via social media engagement. It’s this gap in expertise and nimbleness that leads big brands to buy smaller upstarts. Unfortunately, Hayden said, legacy brands too often make changes to their small acquisitions, undoing some of the inherent advantages of their assets. If a brand is generating $150 million in revenue, has a strong founder story and robust social media following, it’s highly likely to be acquired, said Anjula Acharia, cofounder of Trinity Ventures. In this age of digital-first direct-to consumer beauty startups, some brands are able to quickly generate more than $40 million in sales via Facebook alone. Hayden said that brands would be crazy to start a business that wasn’t direct-to-consumer. This new model, he said, is more profitable than conventional brick-and-mortar strategies; it also makes it easier to reach consumers. However, he warned, brands must build followings that are authentic and noted that best founders talk about how smart their customers are. Acharia added that brands cannot be in a monologue with their consumer—it has to be a dialogue. Those that own their distribution and the social conversation will be the best positioned for growth, investment and acquisition. Neda Doneshzadeh, partner at L Catterton, which just took a 35.8% stake in Il Makiage, said that investors are looking for unequivocal consumer adoption—proof that your brand has a passionate and loyal consumer base. Even if a brand has tight distribution—a handful of Sephora stores, a QVC exclusive or limited geographical reach, for instance— brands must show that they own their space. Doneshzadeh concluded that brands should spend every dollar building that adoption. www.GCImagazine.com. Digital Edition Exclusive DE8
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Dr. Ben Johnson, founder of Osmosis, praised PR for getting his brand “out there.” Shannon Vaughn, founder Pursoma, concurred, noting that publicists can strategically talk to influencers and journalists and connect founders with writers that can tell brand stories in a coherent way. Giorgos Tsetis, co-founder of Nutrafol said that PR is critical for making a real impact for nascent brands. He added that his PR firm recently secured him an article in Forbes. No small feat.
2. Data
Suveen Sahib, co-CEO of Aquis, stated that beauty needs to be driven by data, particularly as consumers seek more definitive answers regarding product efficacy.
If you aren’t looking at your data, you’re wasting your time, said Chris Ayan, head of marketing, Hawke Media. He added that brands must examine things like bounce rates and adjust their offerings accordingly.
3. Help In assessing brands, Hayden said that he examines the target market, surveys a small sample of consumers to determine which attributes are most important to them, and tests out competing brands to figure out the functional and emotional performance available. This type of assessment can happen in the early stages of a brand. For example, Doneshzadeh said that she’s held small focus groups to assess prospective brands that didn’t yet have significant sales. Jeremy Triefenbach, co-founder and CFO of Stage 1 Financial, said that his firm works with companies pre-concept. In those situations, he said it is all about having the fundamentals of the deliverables in place. After all, he said, investment requires that founders get their investors to buy into the founder and their dream. Ceci Kurzman, founder of Nexus Management, said that there is nothing
better than an evangelical, rabid founder. She added that a successful brand is one that can scale beyond its hero product to avoid plateauing. Kahn said that he looks at a brand’s social media traction, velocity and whether it has assembled a team that’s ready to be built out. He went on to encourage the brands in the room to ensure that they raise enough capital to accomplish growth goals. This, he added, is where brands often underestimate what is needed.
5 Resources Every Successful Brand Needs 1. PR During a FounderMade Q&A, brand leaders were asked what strategy most moved the needle for them in terms of publicity. Without exception, the respondents said “PR.”
Jenan Matari, brand manager of The Giannuzzi Group, noted that people who start businesses are usually good at one or two things but cannot do everything themselves. He encouraged founders to surround themselves with a community that can help them grow, including board members.
4. Digital Strategy The digital channel is central to new brands’ success. For a growing number, it’s the only thing. Matari noted that 1/3 to 1/4 of his new brand clients don’t even have physical retail in their business plan.
5. Automation In addition to bringing on human help, sometimes machines can pitch in, too. Ayan encouraged the FounderMade audience to automate elements of customer service, including using tech such as chatbots. n
Trends, insights and breaking news every business day:
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BEAUTY TAKES TIME TO DEVELOP.
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INTRODUCES
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