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    Online Exclusives

    CEW Looks Back & Looks Ahead

    Experts review the year in beauty and what to expect in 2018

    CEW Looks Back & Looks Ahead
    Listen to the Experts. Speakers, left to right, Sarah Jindal, Senior Innovation and Insight Analyst, Beauty & Personal Care, Mintel Group Ltd.; Jordan Rost, Vice President, Consumer Insights, Nielsen; and Larissa Jensen, Executive Director, Beauty Industry Analyst, The NPD Group.
    CEW Looks Back & Looks Ahead
    Full House. CEW attendees listen attentively to presenters.
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    02.20.18

    No beauty conversation today is complete without an emphasis on nature, personal relevance and technology. To that end, CEW’s presentation of its annual Global Trend Reports, hit all the touch points. The Year in Review and 2018 Trend Forecast, held last week at New York’s Roosevelt Hotel, consisted of presentations by Sarah Jindal, senior innovation and insight analyst, beauty & personal care, Mintel Group Ltd.; Jordan Rost, vice president, consumer insights, Nielsen, and Larissa Jensen, executive director, beauty industry analyst, The NPD Group.
     
     
    Jill Scalamandre, chairwoman, CEW, and president, Shiseido Global Makeup Center of Excellence, welcomed attendees, and thanked event sponsors, Mane, Mintel, Nielsen, Perfect 365, Beauty Inc., WWD, Fabler, Moblty, and Kaplow. Westly Morris, senior vice president, fine fragrance, Mane, said that in the world of beauty, change and diversity are constants, and highlighted Mane’s focus on sustainability.
     
     
    “At Mane, we smile at the future, as we head into our 150th anniversary; and we pride ourselves on our strategic goals and partnering focused on sustainability,” said Morris. Urging attendees to be mindful of sustainable practice, Morris concluded with a quote from Warren Buffet, “Someone is standing in the shade today because someone planted a tree.” The message was a recurrent theme throughout the morning.
     
     
    Trends for 2018 and Beyond
     
    Sarah Jindal, senior innovation and insight analyst, beauty & personal care, Mintel Group, Ltd, identified four key trends which reflect consumer themes of trust, transparency, ethics, sustainability, individuality, and speed. The first, was Playing Mother Nature; the second, My Beauty, My Rules; the third, Campaign Capital; and the fourth trend, Private Eye.
     
     
    Mother Nature places an emphasis on natural and organic, in both systems and ingredients. Consumers continue to seek purer, safer, eco and clean brands.
     
     
    “Consumers are really looking at what’s inside that product,” said Jindal.
     
     
    There is also growth in local attitudes. Jindal cited a recent agreement by Nestlé in Mexico, to source 100% of its grains from the locale near its Mexican factory, by the year 2022. This is part of an Agritech Wave that seeks to source locally, and enhance growing conditions for ingredient safety. The Agritech Wave is seeing massive investment. With land and resource limitations, agritech enables growers to maximize yields. Whether using robotics and automation, or aeroponics and hydroponics, that don’t require soil, there is a shift in approaches to growing and harvesting.
     
     
    Jindal also noted efforts to reduce carbon dioxide emissions through legislation around the globe, and said there was a raised consciousness surrounding sustainable waste, and alternative plastic production, including a way to produce plastic packaging from C02 emissions, ultimately creating plastic alternatives to help manage climate change.
     
     
    My Beauty, My Rules, refers to the ways in which beauty is celebrated today, and how it is redefining the rules. Jindal cited a movement in the UK to make makeup genderless, and referred to the entire question of ageing and beauty being redefined.
     
     
    “Beauty is whatever you want it to be regardless of age and circumstance,” she said, citing the example of the 70-something Korean grandmother who became a You Tube sensation, with her cheeky beauty tips and upbeat messaging.
     
     
    “Beauty and inclusivity go hand in hand,” she said, as she acknowledged Rihanna’s Fenty Beauty line, offering shades for all; and Revlon’s Live Boldly campaign, featuring plus-size model, Ashley Graham. The new beauty is also representing diversity in the family dynamic, representing everyone, not just in products, but in the way product messaging is done. “Brands should embrace inclusivity,” said Jindal.
     
     
    Campaign Capital refers to building on the personal connections that consumers want to make with their beauty purchases. Simply selling a great beauty product will no longer be enough. Brands will need to have personality and purpose that align with the consumers’ own beliefs in order to win them over. They should demonstrate beauty with a conscience. She cited Thrive Cosmetics as being born out of a purpose; i.e., to provide a “clean beauty” line of false eyelashes and cosmetics, for patients undergoing cancer treatment. For every product purchased, the company donates another product to a woman who is undergoing treatment. The onus, she explained, is on brands to communicate a personality that is relatable, personable, and sincere. 
     
     
    Jindal acknowledged the work of the Responsible Beauty Initiative, a collaborative program formed by Clarins, Coty, Groupe Rocher, and L’Oréal, with EcoVadis, the supply chain sustainability ratings agency. The aim of the program is to strengthen sustainability throughout the beauty supply chain.
     
     
    Concluding with a look at the Private Eye trend in beauty, Jindal highlighted the ways in which digital technology will follow consumers everywhere, influencing their product purchases and helping them to navigate the complexities of the beauty aisle. She discussed the eye tracking phenomenon, in which Smashbox did a trial with a new ModiFace app that follows users’ eye movements to see which products interest them the most, sending prompts to request more information or to buy the product. The result, said Smashbox, was a 27% increase in conversions to purchase over two months.
     
     
    New ways of social shopping are emerging, and brands must make digital shopping as seamless and intuitive as possible. Instagram is working with 20 retailers to test shoppable platform extension, and taking advantage of ephemeral content; i.e., snappable moments, where products may appear and disappear, giving consumers a sense of urgency to their purchase. Voice activation is also a growing trend, with 47% of global smartphone users said to use voice recognition at least once a month. Coty recently launched a “Let’s Get Ready” personal beauty assistant for Amazon Echo Show with personal recommendations and how-to’s based on individual characteristics and event type.
        
     
    Reading Faces has taken another turn with a technology, called Angus.ai, which is testing shopper insight technology that scrutinizes shoppers’ movements and facial expressions, spotting surprise, dissatisfaction, confusion or hesitation. A Parisian bookshop, LVMH, Aeroports de Paris, and Carrefour, are all taking part in the trial, ostensibly with the aim of competing with data mining of online retailers, and improving their customer service, merchandising and promotions.
     
     
    Nielsen Presents the Future of Beauty
     
    Jordan Rost, VP-consumer insights, Nielsen, addressed three trends that are redefining the future of beauty: natural beauty, personal beauty and connected beauty.
     
     
    “Natural beauty is becoming more mainstream, and products that claim to be natural aren’t enough. You actually have to prove it,” said Rost. “How do we create simpler, purer products and deliver them to consumers? You’ve got to be authentic up front.”
     
     
    Nielsen numbers reflected his hypothesis. In 2017, products featuring natural claims represented 3.1% of the US personal care market, generating $1.3 billion in annual sales last year. That is up from 2.1% of the market in 2013 (representing sales of $230 million).
     
     
    While natural product growth still outpaces conventional product growth in beauty and personal care, growth based simply on natural product claims is starting to slow. Through traditional retail outlets, sales of cosmetics as a whole have declined almost 1% during the last year. In cosmetics claiming to be natural, there is a similar percentage, with sales of those products declining 1.2% on the year, underperforming in the category.
     
     
    Simpler ingredients are attracting more consumers today, with 15% of skin care shoppers motivated to buy products with no artificial ingredients, and the majority of consumers saying that the absence of undesirable ingredients is more important than the inclusion of beneficial ones. Titanium dioxide-free, paraben-free, and phthalate-free, are among the top claims that consumers are seeking. Many categories are on their way to clean beauty, with 51% of facial moisturizers being paraben-free; 55% of eye cosmetics, paraben-free, and 87% of lip cosmetics, also paraben-free.
     
     
    Beauty has become more personal than ever, with color cosmetics driving the inclusive beauty movement. He cited Rihanna’s Fenty line as a great example of representing who we are as a diverse audience. However, beauty has gone beyond product proliferation, to include social responsibility.
     
     
    “The new beauty shopper is diverse, cosmopolitan, young; however, there is no one millennial consumer,” said Rost. “There is also a huge rise in men joining the conversation, whether it is about skin peels or botox, that is not built on demographics, but authentic interest. Having the products and the messaging tied together is a path for success.”
     
     
    He cited the growth of indie brands, digital tools, and store brands, noting that store brands have grown three times as fast as the category.
     
     
    “There are new voices everywhere, and anyone can be a relevant brand. The idea that anyone can be a relevant brand is trending. It’s all about being relevant,” he said.
     
     
    Nielsen numbers reflected beauty’s inclusivity. Over the last five years, Google searches for “foundation for me” have more than doubled; and today there are close to 680 unique colors of foundation. 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 the facial cosmetics category by seven times; and over the last five years retailers’ store brands have grown cosmetic sales nearly three times faster than the entire cosmetics category, gaining a full percentage point of share in the process.
     
     
    Rost concluded with an overview of the Connected Beauty trend, saying that sales are rapidly shifting to digital channels. He explained that almost one third of beauty sales are in digital channels and that as more buyers grow increasingly comfortable with utilizing online channels in their paths to purchase, the opportunity for manufacturers and retailers to connect with them is also growing. However, building a connected beauty strategy is not the same as building a digital or even omnichannel strategy.
     
     
    “It’s about leveraging all of the platforms at your disposal for their maximum utility,” said Rost.
     
     
    While rapid growth is found in replenishment and discovery, finding new brands is also becoming powerful, and e-commerce is opening doors for smaller, indie and niche players. Nearly one in three dollars spent on beauty products in the US today is spent online. Rapid online growth built on replenishment and discovery, saw the following sales growth: hand and body lotions +14%, facial cleanser, +29%; and cosmetics, +90%.
     
     
    The rise of voice commerce in beauty is also growing, with 36% of Google Home owners and 29% of Amazon Echo owners purchasing personal care products.
     
     
    “Voice shopping is becoming more mainstream, and using platforms to reduce friction and scale is helping to meet consumers where they are,” said Rost.
     
     
    “Being personally relevant and adaptable are important in beauty today. Tech will enable you to scale, reach a wider audience, and connect with consumers in meaningful ways, and brands that stand for something hold great consumer appeal.”
     
     
    Prestige Beauty Annual Review
     
    Larissa Jensen, executive director, beauty industry analyst, NPD Group, expressed the importance of emotion in the beauty equation.
     
     
    “Ninety percent of our decisions are based on emotion. When you think about the notion of vanity, it’s really about how the consumer expects herself to be. It’s not picture perfect. It’s about how the consumer wants to present herself to the world,” she said. She noted that appeals to emotion have become more important than facts, when it comes to beauty purchase.
     
     
    Jensen said that in 2017 the US prestige beauty market added another $1 billion to its sales, growing to become an $18 billion business. Skincare has brought in the most, with its major drivers being facial moisturizers coming from brands that connect to the audience. Face mists, essences, and boosters were also strong performers. Dotcom continues to blaze a trail of growth, and the rise of wellness is growing as a motivator for purchase.
     
     
    In keeping with the beauty trends of Mother Nature, My Beauty My Rules and Campaign Capital, Jensen emphasized how natural resonates across categories, and how each trend has implications for the ways in which consumers purchase and consume, as they extend their lifestyle identity. Natural is emerging in fragrance, as well, noted Jensen, saying that consumers would wear more fragrance if it was natural.
     
     
    “There’s a growth of product proliferation. That is, there’s too much stuff; and more product doesn’t necessarily translate to more growth,” she said. Emphasizing the importance of brands that align with our beliefs, Jensen added that consumers seek products that align with a stance; and acknowledging the power of social media, Jensen said, “Fifty-one percent of social media users will automatically unfollow a brand that they don’t align with.”
     
     
    She also highlighted Fenty’s success, noting that Fenty sales reached $72 million in EMV (integrated digital chip payment transactions) in its first month; highlighted the Jecca brand of makeup for trans people; brought to light the new transparency in advertising made without airbrushing; and the transparency of fragrances, like Phlur, for their ingredients. Skincare transparency has also heightened, explained Jensen, noting that how ingredients are sourced and grown are top of mind for brands like Tata Harper and Apoterra.
     
     
    The wellness factor is also key in beauty, as consumers demonstrate increased awareness of the impact of lifestyle factors like insufficient sleep, bad nutrition, stress, inadequate physical activity and digital overdose on their general health. The demand for natural brands reveals the growth across categories, in skincare, +19%, in fragrance, +32%, and in makeup, +9%.
     
     
    Amazon continues to be a disruptive online giant, and has introduced three new strategies for beauty in 2018. Violet Grey will be offering a set of luxury brands to sell on Amazon in exchange for a commission of between 20 percent and 30 percent; Amazon is testing a two-hour delivery program in Dallas with Sally Beauty giving them access to beauty brands they might not otherwise have had; and Coty’s Let’s Get Ready program can deliver unique combinations of hair, eye and skin color beauty products to consumers.
     
     
    Pop-up and Pop-in stores are also contributing to the new retailing picture, offering brand immersion for consumers in key locations throughout the country, and representing 25% of prestige beauty sales.
     
     
    In the overall Global Prestige Beauty Market, performance was as follows: US, +6%, Canada, +9%, UK, +4%, Italy, flat, Spain, +7%, France, -1%, Mexico, +13%, Peru, +5%, Chile, +8%, Argentina, +32%, and Brazil, +5%.
     
     
    Finally, it was the year of skincare, said Jensen, with skincare performing strongest across North America. Natural brought in 47% of skincare dollar gains, with the top 2017 skincare launch being philosophy’s Purity Made Simple Pore Extractor Exfoliating Clay Mask. Other notable skincare launches were Tarte’s Ready Set Radiant Skin Mist, Tatcha’s Violet-C Radiance Mask, and Lancôme’s Visionnaire Crescendo Progressive Night Peel.
        
     
    The top five skincare brands for 2017 were Clinique, Estée Lauder, Lancôme, philosophy, and La Mer. Other top performing skincare brands included Kiehl’s, Peter Thomas Roth, Mario Badescu, dermalogica, fresh, and la prairie.
     
     
    The top Makeup launch in 2017 was Urban Decay’s Naked Heat Eye Shadow Palette. Other notable makeup launches included bareMinerals BarePRO Performance Wear Liquid Foundation, Anastasia Aurora Glow Kit, and Too Faced Natural Love Eye Shadow Palette. The top five Makeup Brands for 2017 were MAC, Urban Decay, Clinique, Lancôme, and tarte; and the Makeup Top Performing Brands were tarte, it Cosmetics, Too Faced, Anastasia and benefit.
     
     
    Top Women’s Fragrance brands in 2017 were Coco Mademoiselle, Chance, Amazing Grace, La Vie Est Belle, and Daisy Marc Jacobs; and Top Men’s Fragrance brands, were Bleu De Chanel, Acqua Di Gio Pour Home, Sauvage, Armani Code, and L’Homme YSL. Fragrance’s top performing parent brands were Chance Chanel, Bleu de Chanel, Amazing Grace, La Vie Est Belle, Dior Sauvage, and Dolce & Gabbana Light Blue.
     
     
    Holiday 2017 painted an interesting picture about what is near and dear to consumers’ hearts. Results showed average growth in beauty, with skincare performance strong. Fragrance home scents did well, emphasizing strong emotional ties to our homes. Jensen said that 85% of the US population over the age of 18 uses scented home products, with 50% saying they relaxed with home scents, 34% cited a cozy feeling, and 30% said home scents lifted their spirits. Home Ancillary sets grew +57% over the holidays, according to NPD.
     
     
    Looking to the future, Jensen commented that AI technology will be brought to new levels, with emotional tracking becoming increasingly prevalent in shopping. “Tracking emotions and quantifying return on investment is still difficult to track,” she said, “however their implications for the future of beauty are strong.”
     
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