Observations in personal care by PDD

Personal Care: Snap shots

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Commercial In Confidence | ÂŠ PDD Group Ltd 2012 ISO 9001 & ISO 13485 registered | www.pdd.co.uk

Content page 1. Adding Performance

2. Adding Value 3. Focus on Heritage 4. The Male Consumer

5. Male Spending

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Commercial In Confidence | ÂŠ PDD Group Ltd 2012 ISO 9001 & ISO 13485 registered | www.pdd.co.uk

Adding Performance The cosmetics and skincare market has maintained steady growth in challenging times. What are brands doing to give their products the ‘X Factor’? We are living in challenging financial times and brands are on high-alert, delivering bigger, better and more impactful products. The personal care industry has so far held its own whilst other industries have suffered. Personal care appears high on the agendas of women with men also getting in on the act, buying into skin care and moisturising. Cosmetics continue to hold appeal, with the lines between fashion and cosmetics becoming blurred, meaning an increased product range turnover to mirror the changing seasons of the fashion industry. Many consumers have unwavering dedication to products and formulations, seeing beauty as a lifelong pursuit. The last 10 years have seen many brands playing on science as a motivator for consumer reassurance. Now brands are going one step further, bringing the professionals to the dressing table via dynamic applicators to enhance the cosmetic experience. Consumers are being increasingly selective when buying new products, making personal care brands work harder to catch consumers’ attention. L’Oreal has been a key innovator when it comes to ‘packaging +’ concepts in the cosmetics and skin care area. Control, dispense, feeling and movement and user experience are considered by dynamic new applicators – delivering formulations and cosmetics as the professionals intended them to be. Foundation rollers, specially developed spray mists for tan, dispensary heads with contouring capabilities and gel roll-ons are all adding another facet and increased value to the cosmetic and skin care experience. These skin care and cosmetics ‘mega products’ are bridging the gap between mass-market and professional results, by remotely adding guidance and performance. As consumers are expecting to achieve great results from their skin care products through correct dosage and application, how can personal care brands step closer to providing their consumers with greater professional results and experiences?

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Commercial In Confidence | © PDD Group Ltd 2012 ISO 9001 & ISO 13485 registered | www.pdd.co.uk

Adding Value Financial focus is fuelling the growth of personal care devices that are adding value to the home grooming experience The global financial crisis has re-tuned the way consumers in the West are thinking about spending. Constant peripheral talk of budget cuts and losses have led to a huge decrease in consumer confidence. Impulsive spending habits have been replaced with considered and calculated purchasing decisions. Indulgent spending (in the main) is generally being side-lined and consumers are looking for alternative ways of achieving their pre-recession personal care habits. For many, (women in particular) personal care and grooming is a non-negotiable activity with the purchasing of cosmetics and moisturising creams being prioritised alongside the weekly staples. Consumers are now moving away from costly professional treatments and investing in home solutions. The last 18 months have seen a dramatic emergence of in-home personal care devices entering the market in multiple global regions. The Western approach views skin care and cleansing to be of a high priority, whereas more extreme beauty ideals in Asia prescribe the need for harsher, more cosmetic focused devices. Although consumer cautiousness is on the increase, the desire for long-lasting, reliable and good quality home solutions is on the rise. This mind set is exemplified in other markets such as the coffee sector. The recent rise in sales of premium coffees such as Lavazza and the explosion of Nespresso, where consumers still strive for the best coffee experience at home without paying Starbucks and Costa Coffee prices for the pleasure. As with coffee, consumers are focused on getting the same quality of performance and results from in-home personal care products as they would expect from the salon or spa. The personal care device market was worth an estimated $1 billion in 2011 and the global fascination with celebrity culture and outward appearance will continue to drive the trend for these in-home personal care and grooming experiences. As consumers want more from their products how are traditional FMCG companies going to approach delivering personal care devices to ‘product aware’ consumers who are used to the high quality offerings from the likes of Apple, Sony and Nike in other areas of their life? Where is the future of adding value for this sector and what can we learn from other sectors’ strategic models? clarisonic.co.uk Page | Back 4to content page

Commercial In Confidence | © PDD Group Ltd 2012 ISO 9001 & ISO 13485 registered | www.pdd.co.uk

Focus on Heritage Brand anniversaries and heritage are being celebrated across all areas. Do products and services face a challenge in positioning themselves in such a way to gain consumer trust? Last year saw the ‘anniversary’ playing a big role in brand marketing across many sectors. Arla’s Anchor Butter was 125 years old, VW Golf was 35 years old, Dulux celebrated 50 years and Coca Cola celebrated their 125 years in business. Both British Airways and Virgin Atlantic also focussed their advertising and marketing efforts on showing off their long-lasting expertise and trustworthiness. This focus on brand heritage and reliability differentiates brands in an otherwise crowded marketplace, highlighting them as the go-to, having stood by consumers for a long time. Heritage and longevity have become powerful tools for brands. The global financial crisis has made consumers feel uncertain about looking forward into the future when the outlook for many can be so pessimistic. Like in past crises, consumers are left yearning for nostalgia, looking to safer, more reliable places to reflect. Brands are responding to this by playing on consumer emotion, evoking memories and experiences through a heavy focus on their past heritage. Advertising in the UK in particular has been playing on this consumer sweet spot, with department store John Lewis and Volkswagen finding success by placing their products reliably throughout the consumer lifespan in their high-profile advertising campaigns. The Queen’s Diamond Jubilee has come at the right time for more established brands with some re-issuing past packaging concepts and discontinued products or re-stocking ‘old favourites’. Ghost signs, retro fonts, and ‘old faithful’ brand mascots are proving to resonate with consumers, creating a familiar, family-like bond to their products - just think of the reappearance of the Tetley ‘tea folk’ ads. Crabbie’s Ginger Beer, a newer alcoholic beverage has managed to use this trend to their advantage, creating their own heritage through 1950’s style advertising.

Many companies recognise that the market place has become so crowded with new products and brands that people are recognising that playing the heritage card and appealing to consumers as being a ‘trusted’ brand that has always been ‘part of the family’ is a strong message to differentiate themselves. For newer brands though, the strategy is less clear. With companies needing to take a longer holistic view to position the visual design of their products and align this to their brand message in order to sensitively position their offer in the market while maximising impact. Page | Back 5to content page

Commercial In Confidence | © PDD Group Ltd 2012 ISO 9001 & ISO 13485 registered | www.pdd.co.uk

The Male Consumer Men are coming out of their shell, wanting to look and feel better about themselves The macro trend for health and wellbeing has opened the door for male consumers, allowing men to be more focussed on their style and appearance than ever before. The ideals around beauty and personal care are shifting for men. Being focussed on appearance is no longer seen as only a feminine pursuit but is becoming tied into the more holistic perception of health and wellbeing. The rulebook has been thrown out and men are feeling less pressured to start a family and settle down. In turn this means that their 20’s are more relaxed and they have disposable income available to spend on indulgent items. The men’s personal care market has grown significantly in the last 5-10 years with product ranges such as L’Oreal’s Men Expert and Nivea For Men being dominant players. Newer niche brands such as Prospector Co. in North America and Europe are using new marketing and packaging approaches to differentiate their position from the rest of the personal care market. Some of these brands are playing heavily into apothecary inspired Victoriana packaging, using history and heritage to attract the attention of male consumers. Pseudo-scientific products are giving men the affirmation of functionality by using medicalised visual codes (whiteness, simplicity and capitalised typography) in their packaging, which elevates the status of their products’ formulations and ingredients. Male adoption of personal care products is at globally varying extremes. Skin whitening or skin fairing moisturisers are popular amongst men in Asia, and even lipstick for men is reported to be having a moment in India as Asian men are more likely to try new things when it comes to personal care. In the West things are changing too. Recently a UK study reported that men are becoming increasingly concerned with body image, transcending women when it comes to body image anxieties. As men are tackling heightened sensitivity and burgeoning self-confidence issues, less focus is being placed upon need and more on experience and desire – allowing men to make themselves feel and look better. The big question is how will brands adapt to this more sensitive and considered man in their marketing and product campaigns? Burroughs Beard Oil from prospectorco.com Page | Back 6to content page

Male Spending Decreasing birth rates in the West have resulted in more men having increased money and time to spend indulgently The cloak of masculinity is falling from favour with men of the 2010’s having less responsibility than their previous generations. When compared with Western traditions of marriage and family making, men are delaying these milestones in favour of financial security and ‘living life’ before settling down. This has led to an increase in nonessential spending for men over the last five years. This extra time in their 20’s and beyond is allowing men to have a period of selfindulgence, exploring their tastes in fashion, being interested in health and fitness and gaining life experience through travel and other interests. Brands like Acqua di Parma, Kiehl’s and Barbour are channelling the male mind set perfectly, combining sports, heritage and high quality products. Extreme examples of this can be found through the men of London who have no problem getting together man-to-man to discuss the merits of popular period-drama Downton Abbey, or having a go at men’s only sewing classes, finishing off with a specially designed afternoon tea for men at the Mandeville Hotel. The emergence of this modernised, self-indulgent man means that men are displaying more spending power when it comes to consumer goods. Men are becoming the bigger spenders, outspending women on treat purchases by 25% in the UK. The personal care market has grown drastically for men and fashion is becoming a greater importance with retailers and luxury brands alike catering more extensively to their tastes. As men become more focused on themselves, what can brands do to drive gift-like purchase opportunities and products for men?

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