As the COVID-19 pandemic in the US continues, while anticipating a vaccine in 2021 marketers are pondering how to reboot their brands and what necessary changes to make to grow their businesses. Consumers are rethinking personal values and behaviors and making changes to get closer to what matters most to them now and in the future. This will undoubtedly reframe how marketers think about research, branding, and marketing in the beauty industry. As we climb our way out of the pandemic, 2020 is becoming an even more turbulent and uncertain year with social and economic unrest and wildfires, as well as general global uncertainty. The desire for more in-depth knowledge about how all this is affecting consumers is growing stronger. We are all wondering how the consumer is going to change coming out of this V.U.C.A. (Volatile, Uncertain, Complex, Ambiguous) world. What’s important to consumers, and what matters less and why? What challenges lie ahead for the beauty industry and how can brands prepare themselves best for future growth?
To help beauty marketers better understand these tectonic shifts, a group of diverse industry leaders, Women Warriors in Business (WWB), came together to discuss what they see as emerging trends and share strategic insights to address the evolving and confusing consumer landscape. The WWB panel is the brainchild of Cherie Buziak, a beauty brand navigator and industry influencer, who pulled together five colleagues—Roben Allong, a research maven, Kathleen Carroll, a brand positioning and strategy expert, Janice Hart, a chemist and fragrance expert, Sheri Koetting, a branding and marketing expert, and Joi Ruud, Senior Business Manager, Global Growth Innovation—to weigh in on key areas: consumer trends, beauty and wellness industry challenges, reinvention to face the future, and the retail environment. Here’s what they offered.
1. Think how to turn disruption into a Strategic Growth Opportunity
Roben Allong: The unanticipated disruptions of 2020 have forced brands to think out of the box to maintain or grow their position and remain relevant. It’s no more business as usual as businesses have had to close their doors, e.g., Century 21, while others are on the opposite end of the spectrum, e.g., Clorox, struggling to keep up with demand. Consumers are contemplating what and which brands are meaningful, as needs shift or disappear into oblivion.
Managing through the pandemic and economic slowdown simultaneously will require extraordinary agility to adapt and respond to evolving and emerging customer needs. To stay relevant in the ever-changing normal, brands and marketers will need to get a G.R.I.P. on their strategy (by identifying Growth opportunities, making a Recovery plan, Innovating for differentiation, and Pivoting the payoff). To do this and successfully break through rising fear and noise, brands need to re-envision disruption as a growth opportunity. Looking beyond the basics and using cultural intelligence as you would a microscope to become more culturally conscious will not only improve brand communication accuracy but also campaign longevity and product innovation, which attract new audiences and revenue.
Priorities are shifting as the economy contracts, and brands will need to innovate and pivot to address what customers need when they need it, especially to serve the millions of customers who may be coming into financial distress. It’s no longer “one size fits all,” so brands must also re-examine their recovery plan and determine how to optimize their point of distinction and user benefits in order to retain market share and shelf space. As consumers become acclimatized to living in the COVID normal, they are more conscious of the sustainability of their own ecosystem, as well as the environment. They are doing more with less. They also are becoming less tolerant of brands that are perceived as less supportive of their ecosystem and community and not acting authentically according to the brand ethos. This is especially true among BIPOC consumers. To remain top of mind and increase engagement, brands will definitely need to align better and make more meaningful connections through bona fide cause marketing and pivot their payoff to match. In short, to future-proof, brands will need to keep abreast of the rapid changes, clearly re-communicate their commitment to customers, and maintain the authenticity of the brand experience to continue to add value and maintain growth
2. Brand positioning is more important than ever to get it right
Kathleen Carroll: Going forward into the “new normal,” it is increasingly important that brands differentiate themselves. Many of the #4 players on down in a category will disappear if they are not clearly meeting a consumer need or are not differentiated versus competitors.
To protect themselves for this brand shedding, marketers need to look at their positioning and ensure that it is as strong as it possibly can be and that it is reflecting consumer sentiment in a fraught time with the pandemic, financial uncertainty, political divides, and increasing awareness of social injustices.
Increasingly, it is important that brands reflect their desired consumers (whether loyalists or prospects) in their product development and advertising (content, as well as media) choices. Segmentation was the du jour way to handle this in the past, using quantitative methods.
To effectively connect with consumers today, however, micro-segmentation schemes are needed and, unlike segmentation, these are often handled best with qualitative methods using ethnographies or online in-depth interviews.
It used to be that segmentations were defined using demographics, behaviors, and attitudes. Then brands started differentiating based on causes they supported to make the world a better place. Now with the new factors of coronavirus and increasing purchases along with values and social justice lines, marketers are faced with an increasing number of ways to differentiate. This is a good thing, as differentiation drives greater sales.
However, the marketer is challenged to “get it right” and risks alienating loyal buyers by choosing the wrong stance. For instance, in advertising, does a brand today choose to show people in their ads social distancing or wearing masks or not? By understanding consumers qualitatively on a deeper level, marketers can effectively reflect their audience to signal “I am you.”
3. Micro-culturalism increasingly drives consumer choice and marketing effectiveness
Roben Allong: The COVID-19 pandemic and rising social unrest are tectonically shifting life as we know it. To accommodate these shifts, consumers’ mindsets and behaviors are undergoing accelerated changes. The future of marketing now rests with researchers’ and marketers’ ability to quickly and accurately identify the changes, as well as embrace and successfully market to them. But it would be a grave mistake to assume that all changes are created equal.
While the predominant US culture today is Caucasian, which makes up the largest segment of the population, data from a recent Pew Research study on the top-ten demographic trends shaping the US informs that by 2055, there will be no single ethnic majority. Culture is an important part of the foundation of how consumers, especially BIPOCs (Black, Indigenous, and People of Color), process and react to change. A deeper understanding of micro-culturalism, which is the study of existing cultures within the macro American culture, will be critical to connecting with the post-COVID consumer changes and to driving business success.
The disproportionate impact of the pandemic on the BIPOC consumer, especially, has unearthed cultural nuances and attitudes that have largely gone unnoticed, been ignored, or appropriated within the macro culture. For example, the higher mortality and infection rates among Black people compared to other ethnicities has forced the healthcare industry to take a closer look at the underlying reasons for this, such as access to existing health services or lack thereof in communities of color, as well as the increased mental health issues brought on by such circumstances. These nuances will become more pronounced as the US demographic and events continue to shift in perception, as well as in actuality. Researchers and marketers will need to actively investigate and discover insights around these microcultures in order to attract and increase new target audiences. Brands that take action today to get a head start will be ahead of the game tomorrow as the trend continues to increase.
4. Making humanity better as part of a brand’s ethos and positioning benefit
Janice Hart: As the economy re-emerges post-COVID, two important consumer purchasing behaviors will increase: 1) consumers will search for multifunctional products and 2) they will want those products from brands with a social purpose that resonates with them. According to Euromonitor International, “The Beauty Industry, will witness a shift toward minimalistic formulations and multifunctional products while focusing on herbal and traditional remedies and high-efficacy signature ingredients.” Secondly, the pandemic has forced “Purpose,” which places people over profit. The consumer will continue to demand transparency from the industry, ranging from packaging and labeling to the betterment of society. A brand that is succeeding in both areas is Shea Moisture, owned by parent company Unilever, through its purpose-driven business model and its use of historically well-known, efficacious natural ingredients. They have many social programs that focus on the needs of their community and customers.
Shifting categories, Euromonitor further states, “The fragrance market is expected to be in the positive in 2021 and onward, growth rates for both mass and premium are unlikely to match pre-pandemic levels until 2024, so fragrance players should be attentive to unisex/genderless, sanitary and functional fragrances to offset market share declines and drive newness.” Where I work, one of Bell Flavor & Fragrance “Spark Trends” is Fluidity—this movement is based on taking a stand for something. Anything goes, from hyper-masculine to hyper-feminine, encompassing and experimenting with everything in between. Inclusivity and being comfortable with non-traditional definitions of normal are the core of this trend. Our perfumers are creating fragrances for the reinvention of beauty with humanity at its center.
5. Be authentic and committed
Joi Ruud: Purpose-driven brands grow an average of 3 times faster than the competition, according to Deloitte, and these brands capture higher market share while boosting employee and consumer satisfaction. When purpose is driven by leadership, it gets baked into company culture and the DNA of brand strategy. Now, more than ever, brands that contribute to the greater good with an authentic and ongoing commitment stand to weather volatility more successfully. This is because these brands center around a true purpose that inspires its team and drives true loyalty with consumers. There is no shortage of causes to commit to, from environmental sustainability to social justice. But what will set brands apart in the new normal is the honesty of their ethos and how truly committed they are to actually making humanity better, versus paying lip service to leverage a passing trend. In the beauty business, we’ve been given an incredible opportunity to enhance the beauty of our audience inside and out. And beauty users are hungry to journey with brands that are truly making a difference. But they also can see through “purpose on the surface,” and will hold inauthentic brands immediately accountable on social media.
My advice to brands looking to be more purpose led? 1) Start at the top with leadership driving ethos holistically through strategy and decision-making; 2) Be authentic and commit to a purpose that will fit your brand long term and; 3) Don’t be shy—consistently find ways to further the purpose of your brand and communicate what you’ve achieved at all the key touchpoints on your shopper’s journey.
6. Virtual living requires more mindfulness
Cherie Buziak: As the world went into lockdown, there was a major uptick in what we call “virtual living.” With the goal of obtaining some sense of normalcy and keeping body, mind, and spirit in balance through this pandemic, we’ve taken on new social norms like wearing masks, staying six feet apart, upping our hygiene with conscious hand-washing or antibacterial sanitizing, distancing ourselves while consciously staying connected digitally, wherever possible.
Overnight we embraced Zoom for WFH virtual business meetings, happy hours, family game nights, movie nights, birthday parties, brunches, graduations, even funerals & weddings—the list goes on. Virtual living encompasses our entire life—both the business and the social side—while we maneuver through local and global mandates set in place to keep us safe. And it’s taken on a lifestyle all of its own.
This lifestyle, while all-encompassing, is also defined by a serious lack of three-dimensional physical, interpersonal experiences—experiences that many feel are central to our humanity. To feel complete and whole these days, therefore, consumers are placing a greater priority on products that enhance mindfulness, mental balance, and well-being. Marketers keen to take advantage of this new lifestyle have identified a vast new potential for product development that aligns with this newfound virtual existence and accompanying consumer needs.
Mindfulness with product use has become the new buzz in beauty and wellness. It doesn’t just stop at personal care. Areas of opportunity to launch or grow a new brand can take this opportunity to address virtual living holistically, as people are performing their jobs, working out, and living in the exact same physical space as their own four walls. They are using virtual means to gather in this space with others as well.
Product inspirations for beauty, wellness, and personal care that connect virtual and in-home use to the wellness lifestyle include sleep enhancement through apps and scents, technologies in skincare and personal care products that supercharge skin’s immunity systems from a stressful day, mindfulness moments combined with product use for mood adjustment, and brain hacks combined with personal care products to reprogram thought processes.
7. Digital shopping has passed the tipping point
Sheri Koetting: Prior to COVID-19, online sales represented a significant growth opportunity for the beauty industry. However, quarantine kicked the speed of that growth into overdrive. eMarketer projects that overall retail sales will drop by 10.5% in 2020, while online sales will grow by 18%. Online sales are carrying many brands through these trying times. WSL reported that during the pandemic, 56% of customers ordered groceries and health products for delivery. What is most shocking is that 50% of that group utilized these services for the first time. COVID-19 has pushed a broad range of demographics to try new online delivery experiences, from seniors previously resistant to making purchases online, to younger demographics and parents relying on devices for homeschooling. Fast-forward into the future and the public’s comfort level with technology will now only continue to expand. Brands will need to stay in tune with their customers’ desires and reprioritize marketing budgets accordingly. Even large brands that historically have been focused primarily on retail sales, like L’Oréal, now see the importance of e-commerce as part of their portfolio. A certain percentage of shopping behaviors that have moved online may never return to retail again.
Kathleen Carroll: With so many people experiencing the time-saving benefits of online ordering and delivery of “everyday items” including beauty, grocery, and personal care products, and the fact that 99% of the time these orders are correct, there is little reason for people to ever want to go back to the grocery and drug stores where they purchased these products. The pandemic will forever be seen as the demarcation point for the rapid and mass adoption of doorstep delivery. Retail stores must recreate themselves as experience and destination centers so consumers have a reason to visit them. One area they can offer differentiation is to bring safe and hygienic opportunities for sampling of beauty and wellness products.
8. Safety concerns trumpet green in the short term; long-term delivering on both is key
Sheri Koetting: Safety vs. green considerations is a white-hot conversation topic in the beauty industry and an area ripe for innovation. Prior to COVID-19, beauty industry growth was centered on products that were “green”—safe for consumers and the environment. NPD data shows that in the first half of 2019, 70% of prestige skincare’s US sales gains were attributed to natural brands. However, when COVID hit, scrutiny on safety and contamination immediately took priority over green. Innovation in refillable and reusable packaging took a backseat to touch-less and contact-free concepts—areas that rely heavily on disposable, single-use plastic items, destined for the landfill. However, the underlying consumer demand for ingredients, products, and packaging that are safe and sustainable has not subsided. As BeautyMatter reported in August, 86% of Americans say sustainability will be equally or more important when the pandemic subsides. My firm MSLK believes that the beauty industry needs to be thinking ahead to more sustainable solutions with less waste in order to stay relevant to consumers. We look forward to innovating solutions that balance both green and safety consumer needs.
