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    Online Exclusives

    Beauty Transformed

    CEW reworks its “State of the Industry” event for these rapidly-changing times.

    Beauty Transformed
    Unilever’s Esi Eggleston Bracey presents virtually at CEW's event.
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    Christine Esposito, Managing Editor07.27.20
    Twenty-twenty has brought about transformative changes to nearly every aspect of life—emotionally, socially and economically—and much of it is happening at a rapid pace. The Cosmetic Executive Women’s “State of the Beauty industry Transformed” virtual event on July 21 provided insight into the changing nature of the beauty marketplace. CEW pulled together an impressive panel of speakers for the day-long event, ranging from entrepreneur Gary Vaynerchuk, Unilever’s Esi Eggleston Bracey and Erica Culpepper of L’Oréal to experts from NPD, Nielsen, Euromonitor and elsewhere who provided hard data from the onset of the pandemic and insight into what may lie ahead as the slow, somewhat shaky recovery begins to take place in the US.

    The pivot to hosting a virtual event provided challenges as well as opportunities for CEW, insisted Association President Carlotta Jacobson.  One such opportunity was the online format provided greater access to the event. According to CEW, 23% of attendees who registered for the July 21 event had never attended a CEW event before.

    After some live music from Emma G and a welcome introduction from Jacobson and Lisa Klein of CEW, the morning keynote address came from Vaynerchuk, chairman of VaynerX, which is billed as modern-day media and communications holding company, and the active CEO of VaynerMedia, a full-service advertising agency servicing Fortune 100 clients. He shared his thoughts on the current digital marketing landscape and covered a lot of territory during his discussion in which he emphasized the importance of “attention arbitrage.”

    According to Vaynerchuck, “attention is the number one asset” in today’s digital space. 

    During a quick Q&A session following his keynote, Vaynerchuk stressed the importance of brands being ready for change in real time.

    “In the beauty space, there is a lot more innovation and disruption coming, and if you are not building depth of relevance with the consumer, you are going to lose,” he warned.
     
    Data Delivered
    Larissa Jensen of The NPD Group provided a look at the performance of the prestige beauty industry globally as well as comparisons to spending in areas such as toys, apparel and technology during the lockdown and into the slow recovery.

    “The good news is that dollar loss is slowing post lockdown. The bad news is that the industry has lost over $2 billion in just four months,” said Jensen about the prestige beauty category.  “While more than half of that volume was lost during the lockdown, this clearly shows that makeup is making up the majority of the losses for each time period. Skin care was least effected. This has led to skin care swapping places with makeup as the dominant beauty category in prestige based on dollar volume.”

    NPD found that within skin care, clinical brands gained share and importance in a category that had been previously dominated by natural brands. In addition, NPD’s data showed gains in products promoting blue light protection. Products with this concept in its name or as primary benefit had strong growth in both makeup and skin care. Specifically, in makeup, blue light products showed a 179% rise in dollar growth and skin care gained 170% in the first half of 2020.

    Unfortunately, the bright light of beauty has been dimmed during the pandemic. The US prestige beauty performance for the first half of the year came in at a “dismal negative 25%. This is certainly going to have significant impact on year-end result,” Jensen said. 

    Forecasting its 2020 outlook, NPD is predicting an 11% decline for overall total beauty. A slower and longer recovery could push that to -18% for the year, while a faster recovery could lead to the sector being down only 5%, Jensen said.

    “It is huge understatement to say that the world has changed since we last met on February 7,” noted Nielsen’s Nicole Collida, referring to CEW’s State of the Beauty Industry 2020 event held in the winter.

    One change is where consumers purchased their makeup.

    “Grocery became a destination again for beauty. This is a big shift. We have seen years of declining shelf sets and declining volume in grocery channel. But as consumer shifted their behavior to one-stop shopping, really wanting to limit their points of contact with physical outside world, grocery became a destination again.” 

    In grocery, nail, hair color and facial skin care thrived, said Collida.

    In a recent COVID survey conducted by Nielsen, 55% of respondents said it would be at least three months before they return to any formal workplace. 

    “The longer consumers continue to work from home, the more we see these trends becoming permanent,” Collida.

    In the survey, respondents said they are ready to embrace the more natural look (think more gray, less makeup) and they are reducing their trips to salons and department stores.

    Collida emphasized a key takeaway from that changing mindset.

    “Consumers are actually telling us they are willing to spend less. Whether it is they are willing to or whether they are forced to because of economic factors, 27% said they will be buying fewer of the high quality and more expensive beauty and personal care products that they are accustomed to buying.”

    Euromonitor International has forecasted declines of 2-3% in the global beauty and personal care categories due to the pandemic, which analyst Kayla Villena called a “a sharp U-turn from the industry’s historic compounded annual growth rate of 5% globally.”

    To that end, Villena discussed three areas that beauty brands should consider as they refocus and plan for these global declines:

    • Wellness Redefined—Basic principles of health and being free of disease. Areas of growth include immunity, and emotional and mental wellness.
    • Where and How Consumers Shop—No-contact fulfillment, e-commerce will be priorities. Areas of growth include ARVR, livestreaming and shoppable social media.
    • From Sustainability to Purpose—The priority will be people and environment over profit. Areas of growth include the circular economy and conscious beauty.
     
    Swerve into It
    As the afternoon keynote, Esi Eggleston Bracey, chief operating officer, EVP beauty and personal care, Unilever North America, provided inspiration and insight into the realities of the shutdown from her own perspective and that of the Unilever team during the closures from COVID-19 and later, the killing of George Floyd and the Black Lives Matter movement.

    In her presentation, “Leading Through Transformation,” Eggleston Bracey said, “Who knew in the midst of COVID that we would undergo such a ginormous racial inequity crisis? The funny thing is we never really knew we were always living in uncertain times, we just weren’t aware of it. Any day, anything could happen.”

    “Now, we are incredible aware of these big seismic shifts and their ability to drive change to our lifestyles our livelihood and it is a day by day situation, “ she said. “It is really not an understatement to say we are living in turbulent times.”

    For Eggleston Bracey, the question is: how do we manage?

    “It’s like a fishtail. Not the cool, funky braid of the fishtail. But remember the fishtail you learned about when you were in driver’s ed?” she asked. “ When you are driving and you’re on slippery, icy road and then you hit a spot you didn’t expect, and all of sudden your car starts to serve out of control.”

    According to Eggleston Bracey, while one’s instinct is to go against that swerve, and jam on the brakes, she said, “Lean into that swerve; it’s leaning into it that actually saves you, and creates a semblance of control so you can get back into the movement. And that is what I say we should take on now—actually steering into this swerve.”
    Eggleston Bracey shared insights into the changes that Unilever made to focus on the safety of its employees and the public, ranging from allowing employees to work from home, understanding that they may have limited capacity (due to caring for children and home schooling or help with loved ones), and physical and emotional needs. She said that the company led with connectivity and authenticity; for example, there were daily check ins. 

    “We knew the connections were super important,” Eggleston Bracey said, noting that Unilever amped up the connections and conversations and vulnerability when the senseless, tragic death of George Floyd occurred, too. 

    “We were all stunned. For me it was a complete emotional rollercoaster. We were able to talk through the issues…and what to do.

    She said Unilever created a buddy system in which employees checked in with co-workers about anything but work.

    Eggleston Bracey noted concrete efforts under the Unilever umbrella, such as PSAs about hand washing from Lifebuoy and production of hand sanitizer—a product that

    Unilever had not manufactured in more than a decade. According to Eggleston Bracey, normally it would take a year to “map out a plan to produce a new product,” but Unilever ramped up in three weeks to provide this critical cleanser in the fight the spread of COVID-19. Additionally, with a shift to DIY, Unilever’s created Wash Day, a program in which hairstylists shared tips and stories to help consumers with their hair care needs while salons were shut down.  

    In light of the George Floyd and the Black Lives Matter movement, Eggleston Bracey urged the industry to lean in. 

    “What do we do in the industry? Do we resist or do we lean in?  We lean in and recognize that these are human rights issues and that companies and brands have a responsibility to enact change. When I say enact change, it’s not just say #blacklivesmatter. It is to recognize that these issues of race are deep-rooted and systemic,” she said.

    According to Eggleston Bracey, beauty and race have a long, intertwined history. “That means, in beauty we have an extraordinary opportunity to evolve how we  reach, impact, serve and even represent beauty in our brands. Our portrayals of beauty can change lives—negatively and positivity. Our ecosystem of developing products and creating content can also change lives.”

    Eggleston Bracey issued a call to action; “Steer into the swerve; let’s do that together. We can do that as an industry. Let’s not be afraid of these changes. Let’s work to be of service and ask, how can we help, our employees, consumers, our business partners? Let’s search for where we can add value and shift from where can I make money or gain advantage to where is there value to be had because I’m of help?”


     


    The roster of speakers for the CEW event also included Erica Culpepper, general manager, L’Oréal Multi-Cultural Beauty, who provided a brand perspective presentation entitled: “Does Beauty Really Matter During a Social and Health Crisis?” In her presentation, Culpepper praised Carol’s Daughter’s efforts during the shutdown and push for social justice,and she said she was also proud that L’Oréal was “authentic”—in that it recognized that it “hard work to do” in terms of racial and social equality.

    During the Q&A that followed her presentation, an attendee asked how mainstream brands could do more to be inclusive, but not come across as inauthentic. 

    According to Culpepper, inclusivity is key to survival.  

    “No brand can afford to not be inclusive, “ she said. “If brands don’t understand how to understand the needs of black and brown consumers, they will be irrelevant to consumers.”
     
    Talks, TikTok and More
    Over the course of CEW’s day-long virtual event, additional topics were covered in separate tracks with a range of speakers from brands to private equity. These included:
    • The Gen-C Report: Beauty in the Age of COVID-19
    • Machine Learning for Consumer Intelligence 
    • Making Connections with the Digital Consumer 
    • M&A Environment & Opportunities Today

    The CEW program included networking sessions and unique breaks like stretch session with physical therapists to eliminate body pain caused by computer fatigue; a TikTok dance lesson and a virtual cocktail mixology session. 

    More info: CEW.org
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