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How are Celebrities Mixing up the Beauty Industry?

December 17, 2018

By Alanna Dible and Mark Grant

The U.S. is the world’s largest beauty market, with revenue of $86.1 billion in 2017.

Over the past few years, the industry has been showing signs of change, with a significant rise in independent and celebrity-backed beauty brands due to the ever-increasing importance of social media, and a booming e-commerce retail environment.

Sales of traditional makeup decreased by 1.3% in 2016, compared to an increase in sales for independent brands, like Glossier and Milk Makeup, of 42.7%. There has also been a notable increase in the number of celebrity branded products including Rihanna’s Fenty Beauty, Kylie Jenner’s Kylie Cosmetics, Jessica Alba’s Honest Beauty, and Kim Kardashian-West’s eponymous brand.

The sales of these products have grown significantly in a relatively short period of time, reducing the market share of traditional brands. This raises the question, what are these independent and celebrity brands doing differently which makes them so successful? How can the traditional brands adapt to regain their market share?

There are a multitude of reasons why these brands have connected so well with the consumer. For celebrity-branded products, the importance of social media and the respective celebrity’s loyal fan base cannot be overlooked. Celebrities are able to reach an incredibly large audience at little or no cost by promoting their brands via social media directly to consumers.  This is very difficult and expensive for traditional brands to replicate.

At the time of writing, Kim Kardashian-West has 116 million followers on Instagram, Kylie Jenner has 114 million and Rihanna has 64 million.   These numbers dwarf Chanel Beauty’s 0.8 million followers and Dior Makeup’s 3.6 million. Traditional brands are increasingly relying on social media ‘influencers’ and celebrity endorsers to promote their brands. This doesn’t come cheap and is arguably less effective.

For those independent brands which don’t have the luxury of a ready-made social media following, the ability to effectively use social media as a means of marketing their products can prove to be the difference between the brand’s success and failure.

The product offering of these celebrity branded products has also played a role in their success. Take Rihanna’s brand Fenty Beauty, for example, which has been widely praised on its release for its inclusivity – with 40 shades of foundation catering to women of all skin colors and undertones. This allowed her product to be marketed to significantly more women than traditional brands.

To put this in context, Chanel’s Ultrawear Flawless Foundation is only available in 16 shades. However, Chanel has recently teamed up with actress Yara Shahidi to showcase their new Caramel shade which has been introduced in an attempt to create more inclusivity in its shade offering.  Other traditional make up brands have also responded with a more inclusive range of shades of their own, for example Dior Makeup has recently launched its Dior Backstage Foundation in 40 shades.

Additionally, consumers, particularly Millennials, are not just buying products for the brand name. There is much less brand loyalty among Millennial consumers when compared to their Gen X and Baby Boomer counterparts. They are more concerned with making ‘ethical’ purchases, be it cruelty-free, paraben free, vegan or environmentally friendly.

This increased importance placed on ‘ethical’ purchases has been a contributing factor in the rise of independent brands, who have utilized the notion of being ‘socially conscious’ as a unique selling point and built their brand on this ethical foundation. Traditional companies should not underestimate the importance consumers are placing on these values and, if not already, should consider implementing them in their own product lines.

Surprisingly, the struggles of the US retail industry and brick and mortar stores have not significantly impacted the beauty industry. Ulta Beauty opened 100 new stores in 2017 and Sephora continues to grow its retail presence in the US, including opening an 11,300 sq. ft. store on 34th Street in New York; its largest store in North America.

Many other boutique brands have been opening their own retail stores in recent years. In May 2018 Glossier, which began online, opened its second permanent brick and mortar store in Los Angeles (its first store is situated in New York City). As well as these permanent brick-and-mortar stores, Glossier has been experimenting with pop-up stores – it’s month long pop-up in San Francisco reportedly had a purchase every 20 seconds.

We also saw Kylie Jenner and Kim Kardashian-West opening pop-up stores to promote their brands. This illustrates that even with a strong online presence and social media following brands can benefit and further promote themselves by having a physical location.

Some traditional brands have started to open their own dedicated brick-and-mortar retail stores, which may be both a response to the decline of the in-store beauty counter and to the success that some independent brands, such as Glossier have had in brick-and-mortar retail. In 2016, Christian Dior opened a flagship retail store within the Oculus Center at One World Trade in New York City. Chanel recently experimented with Chanel Beauty House, a pop-up retail experience in Los Angeles.

What does the future of the beauty industry hold?

As of now, independent and celebrity backed brands are still in their early growth stages and will continue to give the traditional brands fierce competition over the coming years. However, especially for celebrity brands, it remains to be seen whether these brands will continue to be popular once the celebrity’s appeal fades. A new generation of celebrities may enter the industry with a beauty offering of their own. We may see each of these brands have a shelf life; with larger celebrities outlasting the rest.

Through the intelligent use of social media, a brand can raise awareness of their products to a huge customer base at a much lower cost when compared to traditional media. For this reason, we will continue to see an increase in the number of independent beauty brands – with varying degrees of success and longevity. Traditional brands will continue to react and learn from what independent and celebrity backed brands are doing differently while also providing innovations of their own.

This article was originally published by “Women’s Wear Daily.” Click here to view original article.

 


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