We attended another great CEW event recently and learned how beauty executives should re-think their marketing strategies in order to thrive in a changing market in 2016, 2017, 2018 and beyond.
Traditional demographic markers such as age, income and gender are no longer effective for targeting consumers; individual needs and values now drive customers’ purchases and loyalties. That was the key message for the beauty industry at the first Cosmetic Executive Women (CEW) event of 2016: 2016 Trends: New Consumerism Rules.
Executives from Laura Geller New York, TrendWatching and Wells Fargo Securities shared a comprehensive view of current consumer trends and their impact on beauty through a spectrum of lenses: recent M&A activity, the “Post-Demographic Consumerism” trend, and consumer engagement and marketing strategies for brands.
See recap of the event below:
See video showing game-changing beauty brands:
Presenters: Elana Drell Szyfer, Maxwell Luthy and Kelly McPhilliamy (photo courtesy of JF Productions)
- Consumer Megatrends Affecting How They Discover, Choose and Shop for Brands
- Changing US Demographics
- Acceleration in Lifestyle Trends
- Quest for Knowledge, Safety and Convenience
- Digital Upgrading Path to Purchase
Companies Across the Consumer Products Industry Revamping their Business Strategies in Response
2. Independent Brands are Taking Share
The top 3 beauty players have lost market share in several product categories due to smaller, niche brands taking their share.
The key drivers for this are:
- Secular shift in buying patterns and influencers.
- Greater access to beauty brands.
- “Anti-establishment” consumer mindset.
3. Disrupters abound – How are they doing it?
- Digital has lowered the barriers to entry even further.
- Capitalizing on major growth trends.
- Creative innovation and newness.
- Increase in financial investors backing growth brands.
4. Evolving Channel Dynamics
- Today – specialty retail and online are gaining as traditional formats fight back.
- Tomorrow – social selling 3.0, customization and new formats emerging.
- Beauty brands and retailers must continually evolve.
5. What Does All This Mean for Beauty M&A
- Beauty M&A volumes are at historical highs.
Key Drivers include:
- Strategic need for scale and growth which is being rewarded in the public market.
- Strategic need to acquire capabilities and fill white spaces by category, channel and geography.
- Substantial buying power of private equity firms.
What is a consumer trend? A consumer trend is a new manifestation among people – in behavior, attitude, or expectation – of a fundamental human need, want or desire.
Demographics are dead: Consumption patterns are no longer defined by traditional demographic segments such as age, gender, location or income.
Example: Women over 18 now represent a larger proportion of gamers than boys under 18.
Example: A 94 year-old is releasing a line of wearable tech.
Example: Men searched Google for “hair care” 6% more than women in 2015.
What is Post-Demographic Consumerism? Consumers are freer than ever before to construct their lifestyles according to their own ideal and tastes with little regard for tradition.
What are the implications for beauty brands?
- New Normal – Embrace new attitudes, new freedoms and new expectations.
- Heritage Heresy – Be prepared to re-examine or overturn your brand heritage.
- Post-Demographic Empowerment – Not every consumer can pursue their identity. Bring this freedom to the repressed, ignored and under-served.
- Taste-led Targeting – Use technology to your marketing, products and services for a segment of one.
Cosmetic Executive Women, Inc. (CEW) is a global, nonprofit professional organization with 8,000 global members, both men and women, from over 2,250 companies in the beauty and related industries. CEW brings the beauty community together, at every stage of their careers, from every facet of the industry. CEW leads the conversation in beauty, addressing topics that are shaping the future of the industry and provides unparalleled access to industry influencers and thought leaders. CEW provides the connections, tools and leadership development resources to move careers forward. CEW recognizes professional achievement and innovation in the industry to inspire the next generation of leaders. CEW is based in New York City, and also hosts events for the beauty community in Los Angeles. Additionally, CEW has associated organizations in France and the United Kingdom. The CEW Foundation supports Cancer and Careers, a comprehensive program for people balancing work and cancer. For more information, log on to cew.org.
– Ron Robinson
What do you think about the changing demographics in consumerism?
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