Where Does It Hurt?

24 Marketing Matters GCI January 2010

MARKETINGMATTERS

n BY ALISA MARIE BEYER

An exclusive study takes a look at the top concerns of today’s leading beauty executives.

Where Does It Hurt?

With reports that the value of the beauty market sank in 2009, it’s no surprise that industry executives are

casting their eyes to the future. Deciding how to grow a company in a changing economy involves creative thinking, strategic planning and a little bit of moxie to come out on top when the dust settles. What worked a year or two ago to get her into your store or using your brand isn’t necessarily going to compel today’s consumer, as the sad demise of both Prescriptives and Max Factor illustrates. And although consumers continue to spend a bit more money on personal care items in general, they have scaled back on spending, period. Accordingly, beauty brands need to adapt and implement strategic campaigns that reach across ever broader platforms.

Like you, � e Benchmarking Company wanted to know how these changes are a� ecting the industry, so it asked more than 130 beauty executives—founders, CEOs, presidents, senior vice presidents, marketing directors and managers—to take a survey and share their thoughts on their biggest research, strategy and branding concerns. Every sector of the industry is represented. Top 20 brands, prestige, mass, home shopping, infomercial, and small entrepreneurial indie brands all chimed in: Estée Lauder, SkinCeuticals, Johnson & Johnson, April Rain, Chanel, Alchimie Forever, Besame Cosmetics, Mary Kay, Remede, Fusion Labs, Yes to Carrots, Guthy-Renker, L’Oréal, Avon, Matrix, � ree Custom Color, Coty, Joico, Molton Brown and dozens of others provided input on the biggest business and branding concerns in the beauty biz. All responses were anonymous and con� dential.

So, what did they have to say? � e survey revealed that no matter what brand the executives worked for or what channel they worked in, concerns were consistent

across the board. What’s the next big idea? How can social networking be leveraged to grow market share? And how can their brands gain her loyalty and trust? Beauty executives are always saying they want to reach “nirvana” with their brand: that untapped distribution channel or that one amazing product that would put them closer to solving all their business concerns, but the survey clearly revealed that regardless of how it might appear, there is no nirvana. Every channel struggles with the same questions, every brand faces the same concerns and the industry as a whole is on the same page about how to meet the future of beauty.

Just the Facts Knowing why consumers rejected certain retail channels was the number one research concern for all executives; more than 67% listed it as their primary focus. With such abundant retail channels available to consumers today, it is critical for executives and companies to know what didn’t work in order to understand how they can capture

this missed opportunity, how to keep what is currently working for them working and to retain current consumer loyalty. Fi� y-four percent of executives listed “knowing more about how frequently she is purchasing their brand” as one of their top 10 most important research concerns, which directly links to why she may have rejected a certain channel.

An in-depth analysis of what went wrong and what wasn’t embraced by your consumer is the necessary � rst-step toward � nding the missing link and creating a multichannel platform that will be successful.

Audit Her Medicine Cabinet Getting back to basics and looking inside her medicine cabinet, purse and makeup bag are also important research areas for executives. Of research services purchased for their companies, 25% were brand tracking and consumer insight studies, and a full 26% of that research was used for new product visibility. What is her current routine? What are her attitudes toward beauty products in general and how do they earn a place in her daily regimen?

An in-depth analysis of what went wrong and what wasn’t embraced by your consumer is the necessary fi rst-step toward fi nding the missing

link and creating a multichannel platform that will be successful.





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By leveraging what you know about your consumer’s beauty routine now against what you can give her in the future, you position your brand to � ll a void that she may not yet even know exists. It’s no secret that consumers are trading both up and down these days when shopping. Brand name items are replacing certain expensive designer brands in order to allow consumers to continue to a� ord that Chanel compact or Gucci fragrance. Focusing on what she is using, and continues to a� ord in spite of the economy, will let you tailor your o� ering in a way that will both meet her needs, as well as allow for innovation.

The ‘It’ Hit With more than 50% of respondents ranking new product concepts as their biggest strategy concern, it’s clear that merely having good ideas for your brand isn’t enough—product concepts need to communicate that unseeable, oh-so-sexy “it” factor and anticipate what consumers are going to want. But how does this translate in an economy where tried-and-true brands, once on the cutting-edge of trendy, are now gone? Even when brands take steps to � nd these answers—trend reports are the top research service purchased (36%)—answers aren’t always forthcoming. As Jeremy Gutsche, author of Exploiting Chaos: 150 Ways to Spark Innovation During Times of Change, notes, “� e upbeat impact of crisis is that competitors become mediocre, and the ambitious � nd ways to grow.”

To illustrate, Neutrogena only just launched the SkinID brand in 2009, however; the line had already taken a large portion of the online acne business

by October 2009—all during a time of recession. Neutrogena didn’t re-invent the wheel with this product (it is an acne line made with ingredients typically found in other acne products); instead, Neutrogena cleverly capitalized on how its consumer wants to and is shopping, and embraced a new “it”—an online only distribution model with a personalized twist.

Don’t re-invent the wheel; instead, give consumers the innovation they can’t live without.

A Wrinkle in Time Product concepting was another big strategy problem for executives, and more than 57% declared “knowing product concepts for the next � ve years” as a top concern. In any economy, long-term plans for new concepts are obviously important. But in today’s economy, envisioning what those concepts might be for a consumer who is reinventing how she shops is a tall order. What economies of scale will be in play in

� ve years? Will she still be trading up and down for the same items?

With 26% of research dollars spent on focus groups, many executives seem to agree. By utilizing complementary business tactics, such as social networking or alternative retail channels, and accessing target consumers’ brains with focus groups and outreach studies, your brand can get a pulse on what consumers want in order to generate concepts that will win her.

It’s Still Who You Know It has been estimated that more than three million messages are tweeted on Twitter everyday. Imagine if just a third of those messages mentioned your brand. A half? Factor in Facebook, MySpace, YouTube, MySocial 24x7, FriendFeed, Blogger, Tumblr, LinkedIn and any one of the dozens of other rapidly evolving social media outlets and it’s clear to see the potential to reach untapped consumers through social networking is enormous. Of companies that purchased

By leveraging what you know about your consumer’s beauty

routine now against what you can give her in the future, you position

your brand to fi ll a void.






26 Marketing Matters GCI January 2010

MARKETINGMATTERSbrand development services, 68% of services were Web collateral and design combined. Clearly, social media is here to stay, and smart brands are eager and ready to explore this channel.

Where online marketing might have been an option two years ago, today it’s a necessity, and 52% of executives agree that a powerful online presence is key to building an even more successful brand. In fact, social media plans and online networking are the third biggest strategy question for executives.

Luckily, it is a question that can be answered with relative ease and almost limitless creativity. Tap into (or create) an online community that targets your demographic, create interactive and engaging fan pages, and host customer appreciation campaigns or contests on your company’s home page—and you can reach a vast consumer segment. Not only are consumers becoming accustomed to getting real-time news and information via these channels, it is rapidly becoming their preferred method of communication. If you give your consumer what she wants before she’s had a chance

to look elsewhere for it, you will keep your brand fresh in her mind, and on her lips.

How Do I Trust Thee? Executives are concerned with brand loyalty and trust factors, and 23% of executives have or would purchase consumer awareness research to help map out this process. Who earns her loyalty? How do you gain (and keep) her trust in your brand?

Figuring out the answer to this formula is a bit like solving a Rubik’s cube: there are many ways to approach the solution, and, although it may not seem so, the solution is quite possible. � e most important factors are that your products connect to her emotionally while also di� erentiating your brand from competitors seeking to do the same thing: claim her loyalty. For example, does your lip plumper really plump her lips or does it work just like every other lip gloss on the market?

With so many brands available to them, consumers are seeking results as their ultimate litmus test, and they want to feel an emotional attachment to their products. We are � nally seeing sales driven click by click. If you build that foundation, they will come.

A Rose by Any Other Name Knowing what she thinks of your brand in relation to others is the sweet spot all marketers want to own, yet for 53% of executives, it’s the number one branding problem. More than just testing advertising or teasing out messaging, discerning intimately how your brand compares to others in target consumers’ minds illuminates white space and opportunity. Most marketers agree, it’s not the � rst purchase that counts but rather the lifetime value of continued purchases that matter.

If you had a crystal ball and it could tell you exactly what she was thinking when she held your product in her le� hand, and your competitor’s product in her right, wouldn’t you want that information? Today, you are closer to bridging this gap than

If you give your consumer what she wants before she’s had a chance to look elsewhere for it, you will

keep your brand fresh in her mind.





WHO PARTICIPATED IN THE EXECUTIVE SURVEY?

52% Brand Owners 13% Vendors and Consultants 8% Retailers 4% Beauty Associations 2% Magazines and Publications


www.GCImagazine.com Marketing Matters 27

ALISA MARIE BEYER is the founder and creative director of The BenchmarkingCompany (TBC), a global beauty consulting fi rm offering business, strategy, consumerintelligence and branding. As publishers ofthe “must read” Pink Report and WomenTrends,

TBC keeps its fi ngers on the pulse of the industry and offersunparalleled consumer insights and intelligence.E-mail: [email protected]; www.benchmarkingco.com

TOP BRANDING CONCERNS FOR BEAUTY EXECUTIVESKnowing how my brand compares to others in her eyes: 53%Connecting on an emotional level /differentiating my brand: 49%Finding my brand’s real ownable position: 47%Telling her my brand story more effectively: 46%Refreshing my brand/product offering: 34%

TOP RESEARCH CONCERNS FOR BEAUTY EXECUTIVESWhich retail channels were rejected and why: 67%Brand loyalty and trust factors: 66%Her perception of my brand: 63%

Her attitudes about beauty: 63%Her beauty routine and habits: 62%Sources and publications she uses for beauty knowledge: 61%

ever before. Social media sites allow you to communicate with your consumers in real-time, and online tra� c metrics can give you deep insights into how your consumers are navigating the Internet (including competitor’s sites), virtually allowing you to read her mind.

What’s Next?As executives brainstorm next steps in this economy, some ideas simply didn’t resonate. Traditional outlets for reaching the consumer, such as print collateral campaigns took a backseat in magnitude to creating robust social marketing platforms or funding research into the next “big thing.” Ditto for training expenses and launch plans, which ranked at the bottom (14% and 8% respectively) for brand marketing service needs. Importantly, executives overall still have con� dence in their brands and in their brand’s ability to meet all of these new challenges. In fact, more than 54% of executives were so con� dent in their brands they felt a total brand audit was unnecessary,

rather only certain areas needed attention—not the entire brand, which is a good sign.

� e industry has recognized that a new consumer has emerged, and rather than fragmenting, the industry is instead rallying behind this new metric synergistically to meet her needs and lay the foundation for continued future growth.

O� en, the industry studies consumer preference for brands, however, with 85% of purchases still made at the store level, the focus should shi� to getting more insights on the shopper. She is still going to the store and mentally comparing your brand o� ering to the one next to it, or the one that she currently has in her mind. n GCI


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Where Does It Hurt?