Marketing in the Personal Care sector has been transformed in recent years. When social media platforms like Instagram and Facebook first appeared, beauty brands discovered the advertising potential of social networks, allowing for relationships on a personal level with consumers. With Facebook alone being responsible for 15.8 percent of total time spent on the internet, it became a necessity to invest in social media presence.
Many companies reach their target consumers through re-marketing, and also through the use of ‘social media influencers’ and celebrity endorsements to advertise products.
A good example of this is Fenty; the company owned by Rihanna, who developed a 100% digital campaign and launched in 2017, largely based around Instagram and influencer content. This unique campaign gained 1.4M followers within four days, and the business continues to generate engagement and create hype with each new product launch.
In 2016 L’Oréal took a different direction with social media marketing with their ‘Beauty squad’ campaign which involved influencers creating articles and videos on the latest trends for both L’Oréal’s website and social media as well as their own. It allowed the brand to capitalise on influencers with a combined following of 5.5M.
This approach is particularly key to start-ups working with smaller budgets and helps them grow rapidly. EOS (Evolution of Smooth) is one such example. A business known for its iconic spherical containers of lip balm which are 95% organic, 100% natural, and paraben and petrolatum free, EOS was founded as a start-up in 2007 and started selling in 2009. Consumers rushed to buy the fashionable, innovative lip balms after spotting EOS in programmes such as Gossip Girl and seeing celebrities Miley Cyrus, Christina Aguilera, and Kim Kardashian using their products.
EOS has worked to build a large social media presence. The company now has more than 1.9 million followers on Instagram and nearly 7 million followers on Facebook. They currently sell over 1 million units a week and prospects look promising, since the global lip care market is projected to increase steadily to $2 billion by 2020.
Another recent addition aimed at enhancing the buying experience is Augmented Reality. L’Oréal hair-care and skin-care brands acquired an app called ModiFace in 2018, which allows users to apply makeup, hair, and nail products to a picture of themselves, using over 30 different products. AR mirrors within stores that allow different products to be tested virtually without the commitment to buy, are helping customers to visualise how they look in different colours and styles. This seems to be innovating beauty users’ experience and boosting sales. Coty have also been investing in AR and are the first to invest in Snapchat’s shoppable – AR, recently unveiling its own AR mirror.
The fast-growth capability of new start-up brands has led to a trend of large beauty groups buying small indie brands who have quickly established market share. L’Oréal and Estee Lauder have both purchased numerous such companies. Estee bought Too Faced and Becca. L’Oréal purchased Urban Decay, NYX Cosmetics and IT Cosmetics. NYX Cosmetics was bought for an estimated $500 Million and sales quadrupled in the following two years.
Beauty Giants such as Johnson & Johnson, Unilever, L’Oréal, and Revlon were ranked in the Top 10 biggest beauty and personal care companies by revenue in 2017. The solution to big companies not being able to move as fast as the digitally native start-ups that pop up in response to customer need and interest, for now, is the incubator. By building in-house start-up generators, bigger players are looking to start and predict new trends without purchasing start-ups at a high cost. Natura, the Brazilian beauty giant, is the latest to announce a $multi-million investment in beauty and wellness start-ups through the launch of a venture capital arm.
Many Personal Care businesses are only beginning to invest in concepts such as AR, whilst for many of the more established groups, complex social media investment and innovations such as AR are already at the centre of strategic and operational plans.
Innovation in technology and social media will continue to drive the sector, and as long as new ideas and evolution put the customer at the heart of decision making, it will continue to be an exciting time for the Personal Care sector.