More than any other consumer industry, beauty and personal care are driven by trends. New trending ingredients, formulations, colors and brands come around every season. Walk into your average drug store and you’ll see this reflected on shelves. In fact, here in the U.S. there are more products on shelf in the average cosmetics aisle than in any other category across fast-moving consumer goods (FMCG).
However, like many FMCG categories, the business environment has become challenging. According to Nielsen data, 2017 sales within the beauty care category in drug stores totaled $5 billion, down from $5.2 billion in 2016.
Even if you don’t play in the beauty or personal care space, the challenges that beauty and personal care brands are facing today are a perfect microcosm of the challenges that all brands are facing. How do you stay relevant with shifting consumer preferences? How do you leverage the growth of emerging channels, while simultaneously being responsive to the newly found power and threats of upstart indie brands?
For today’s drug retail marketer, the secret to balancing all of these challenges is understanding the macro trend that’s driving the micro trend. There are three such shifts driving beauty and personal care forward and, really, these macro shifts are changing our relationship with all of the products we bring into our lives.
Shift toward natural and authenticity
Americans’ shifting views of health and wellness are fundamentally driving a trend toward more natural beauty products. In beauty, as in food and many other consumer goods categories, consumers are flocking to more natural and objectively simpler products. But rather than simply accept brands’ definitions of what’s natural, consumers are redefining what it means and deciding for themselves.
While sales of cosmetics claiming to be natural have declined 1.2% over the last year across all Nielsen-tracked channels (on par with cosmetics as a whole), sales of cosmetics free from parabens have grown 2.3%. Additionally, sales of cosmetics products that are both free from parabens and claim to be natural are growing 12% — five times as fast as those just meeting the paraben-free specification.
The reality is that you can no longer simply claim to be natural. The path toward natural beauty starts with creating your product in its simplest form with only the right ingredients. Then, once you have an authentic claim to natural, organic or whatever matters most to your consumer, you have the right to communicate to those consumers that your product aligns with the lifestyle inherent in that claim.
Lesson to learn: Brands need to be authentic to consumers and deliver that authenticity at a truly granular level. It’s about transparency. And this focus on granular authenticity applies well beyond natural or even health and wellness considerations. For today’s consumer, what’s in your product — and increasingly, what’s not in your product — often says more about your brand than anything else you can say.
Authenticity becomes personal
Part of the reason that brands need to focus on granular authenticity is that the average American consumer is more diverse than in generations past. Today, there is no average American consumer. So, how consumers define health (or any other need) varies widely. In fact, the same shoppers who are redefining natural beauty are themselves younger and more racially, culturally and ethnically diverse.
The beauty industry has done a good job in recognizing this shift and, as a result, the beauty aisles in stores are finally beginning to reflect America’s diversity. In fact, over the last five years the number of unique facial cosmetic colors available on shelves has grown 22%, outpacing the general pace of new product development in facial cosmetics by seven times. Today there are close to 680 unique colors of foundation, up from 542 in 2013.
The products you create for consumers need to authentically reflect that individuality. Take a brand like Fenty Beauty: Not only has it released more inclusive product lines, it has also celebrated the fact that anyone can find themselves in these products. Drug store brands such as L’Oréal Paris, Maybelline and CoverGirl have all expanded their shade offerings as well.
Lesson to learn: While beauty and personal care are some of the most personal products that a consumer can buy, all companies have an obligation to ask how they can authentically make their product more accessible to more consumers while still being true to who they are as a brand.
Being personal means being connected
As we’re all more digitally connected — to everything and to one another — brands now have the ability to engage consumers one to one, at scale. Authenticity and personal relevance are quickly becoming table stakes.
Beauty brands and retailers have provided some of the best-in-class examples of true omnichannel excellence. It’s perhaps no surprise, then, that beauty products are some of the first consumer products to have seen significant shifts in sales to online channels. Over the last year, nearly a third of all beauty sales have flowed through online channels.
And as social, video and other digital platforms become more shoppable themselves, it becomes easier to find inspiration and buy immediately. This shift is poised to accelerate. But digital channels are more than just new growth channels. They’re dramatically changing the path to purchase.
Brands like Glow Recipe know that platforms like Instagram are the first place that many young consumers may discover their product, so the brands are creating what they call “social media-worthy packaging” — the products are formulated and packaged to stand out in consumers’ feeds.
While beauty and personal care shelves are certainly crowded, the endless online shelf for all FMCG categories is even more so. The more that consumers turn to social platforms and, in the near future, voice-based assistants to navigate that choice, the ways in which brands have to stand among the crowd will change.
Lesson to learn: While the traditional skills that have always led to success in merchandising — product, pricing, promotion, place — are still relevant, so too are the skills of modern merchandising. As new digital shelves pop up across social, video and search platforms, the tenets of good search engine optimization will be just as important for all marketers. Can you harness the best-available content at an increasingly atomic level (reviews, ratings, headlines, descriptions) to win favor with the algorithms that drive these platforms and ultimately help consumers decide what’s best?
With all of this in mind, it may sound as if you need to be everything to everyone. But that is not what I’d suggest at all. For today’s consumer, brand value is more than skin deep. For today’s marketers, successful brands deliver authentic products that solve consumer needs; marketers then consider how that offering should adapt to match the diversity of their consumer base. Technology will help you achieve that resonance at scale, but first you have to flip the questioning back onto yourself and ask, Who am I as a brand?
Jordan Rost is vice president of consumer insights at Nielsen.