What Is The Impact Of Makeup On The Beauty Industry

Nature is beautiful because it looks like Fine art; and Fine art can only be chosen beautiful if we are conscious of it equally Art while withal it looks like Nature.
Immanuel Kant, Critique of Judgment

Humans are visual and social creatures. It makes sense thus that, historically, we have been collectively preoccupied with beauty. Someone'due south appearance is the first thing we notice about them upon coming together them. The nature of beauty itself has been the focus of Aesthetics, a major field of study in Western Philosophy, and has occupied the brilliant minds of numerous philosophers, from Plato to the aforementioned Kant.

People take been using makeup and cosmetics since ancient times: the Egyptians' employ of nighttime eyeliner is present in anybody's mind through their paintings and deities, while near know that Victorian women frequently fainted not considering of their demureness, but because of the wide-spread use of lead-based creams to "improve complexion" together with constricting girdles.

Image taken from page 339 of 'Rosa Lambert'

For the most part, these rituals were conducted by women, and were relatively hole-and-corner: one had to uphold the idea that beauty was natural and effortless, not an artifice.

So how has the beauty industry, every bit former every bit the idea of beauty itself, become non only mainstream but too lauded equally one of the best sectors in which to launch a company? This is particularly notable in a time in which traditional industries are struggling, and in the extremely challenging times for the retail industry.

In this article, we attempt to reply this question. Nosotros start by defining the manufacture and its main players, both traditional and incumbent, we briefly affect manufacture size and trends also equally the anti-cyclical qualities of the beauty sector. Subsequently, we will use companies that exemplify success in this sector, Glossier and Deciem's The Ordinary, to understand how they approached (and croaky) the trouble of enticing consumers, building brand loyalty and creating unique experiences, drawing a few lessons relevant for all direct-to-consumer (DTC) companies.

Beauty Industry Assay - Market place Size and Major Players

The beauty industry is, in fact, quite broad: it includes both services (such as hairdressers, barbers, etc.) besides as products. In the United states alone, the beauty services sector employs over 670,000 people, and its job growth outlook is "faster than average" according to BLS data at a rate of 13% (2016-2026). According to a study, it was worth $532.43 billion in 2017 and is expected to attain a market place value of $805.61 billion by 2023.

The table below highlights the unlike segments and their relative weight by revenue.

United states Beauty Industry Segments past Revenue

It is still an extremely concentrated industry, with the 20th largest manufacturer in the earth nevertheless producing only v.v% of the acquirement of the largest ane: French giant L'Oréal, which commands an eye-watering xx.2% market share in Western Europe.

Revenue of the Leading 20 Beauty Manufacturers Worldwide in 2018 (U.s. $ Billions)

Revenue of the leading 20 beautify manufacturers worldwide in 2018 (US $ billions).

Traditionally, the industry is divided into a premium and a mass-market segment. The premium segment represents 28% of total sales worldwide, while mass-market accounts for 72%, according to a 2017 study.

Traditional distribution channels focus on bricks and mortar, particularly sales through supermarkets, specialty stores, pharmacies, and salons. Direct sales and eCommerce, however, take become increasingly prominent, with online sales for beauty companies growing at a much faster rate than full general internet sales: the category grew at 23.vi% in 2017 to achieve more than $5 billion in web sales, according to Cyberspace Retailer data. It outpaced the Usa eCommerce market'southward xv.6% growth rate in 2017 and the overall Cyberspace Retailer Top one thousand's 18.v% growth rate. The company was Glossier, which nosotros will cover in more detail later in this article.

For the purposes of this analysis, we will focus on the product side rather than services, and on younger companies (which, non entirely coincidentally, fall in between the premium and mass-market segments) that are utilizing product and other innovation as an engine of growth.

Beauty Manufacture Trends

The beauty manufacture is notably anti-cyclical, so much so that a famous economical phenomenon, the lipstick consequence, is derived from it. This miracle, which is only partly confirmed, alleges that consumers will all the same purchase luxury items in an economic downturn, privileging however smaller ticket items, such as lipstick. Fifty-fifty if this theory has been criticized by many (notably, The Economist, when it comes to lipstick specifically, many studies have found a statistically significant correlation when it comes to the broader beauty category.

Growth in the dazzler industry, however, has boomed in contempo years, in a trend that many link to a broader generational trend of attention to physical wellbeing (which we covered in our recent article about the growing plant-based market and Beyond Meat). Millennials are often quoted as existence the chief drivers behind the meteoric growth of the beauty segment. There take been many articles written on this tendency, citing everything from the aging of the millennial demographic to a focus on "self-intendance" every bit a coping method against a difficult political and economic climate.

Democratization of Beauty - Bringing High and Low Nether One Roof

The straw of this trend and the beauty industry growth was the arrival in the U.s.a. of specialized French dazzler retailer Sephora in 1999, also as the rise of its Us competitor Ulta. These companies constitute a gap in the market place: they created new shopping experiences for consumers, who had an boosted option across going to the mall or purchasing dazzler products at a chemist's shop or supermarket. They chiefly stocked products at different price points, from elite brands to shop ain-labels. In the UK, there were similar concepts being launched at the aforementioned fourth dimension: the local equivalent of Sephora, Infinite.NK, was founded in 1993 and started expanding their retail footprint in the early on 2000s, growing to 69 stores in the Uk and Ireland and 31 in the US.

The Rise of the Indie Brand - Focus on Ingredients and Quality

The second significant trend was the rise of new and unknown brands focusing on ingredients and quality, originally coming from Korea, merely now also from Japan or other countries. Korean skincare exploded in the West when Sephora started carrying a Korean brand, Dr. Jart+ in 2011. The Korean skincare industry is heavily promoted by the South Korean government, which has made Dr. Jart+, together with Thousand-Pop, one of its flagship cultural exports (and with amazing success). What is particularly noteworthy about K-beauty, for the purposes of this article, is the focus on dermatological ingredients, the unbundling of products into dissimilar (and thus customizable) steps, and the proliferation of smaller, indie brands.

Finally, another significant change that propelled the beauty manufacture forrard has been the rising of social media, in particular of image-based social network Instagram. Evidently, a visual medium is optimal for a beauty brand: it fully allows it to explore the visual potential of its products. Non but, but Instagram has enabled brands to cultivate a stronger image, collaborate with consumers in a more direct way, every bit well equally creating an entirely new marketing category, that of influencers, which, in plough, take at times turned into fully-fledged entrepreneurs. Kylie Jenner, probably i of the almost famous women in the world right now, was merely this year crowned the world's youngest self-made billionaire, thanks to her immensely successful makeup line.

We have thus identified some of the key success factors for established and upcoming beauty brands: a focus on consumer and experience, price-points that are potentially below those of premium brand just a focus on dermatological results and credentials, and finally, a strong digital presence and direct-to-consumer marketing. This leads us into the next section of our slice, a modest case study.

Glossier and The Ordinary

Many smaller and newer brands have emerged in recent years, eroding the market dominance of the large beauty companies. Glossier and Deciem'southward The Ordinary are, however, probably the most interesting of the incumbents, because of their deep understanding and intelligent utilise of the success factors outlined to a higher place, admitting in extremely different ways.

Glossier, on the one manus, is obsessively focused on customer feel and, every bit a digital-native company, has strongly utilized social media as a growth engine. The Ordinary, on the other paw, has built a huge brand and received an investment from Estée Lauder by being obsessively focused on product innovation, scientific rigor in product development, and a very low price point. It too has a strong social media presence, nevertheless, whether that has always been a success factor is highly debatable, every bit explained beneath. We refer to The Ordinary, rather than the parent company Deciem, as it accounts for 70% of its sales.

Glossier

Glossier is arguably the virtually successful of the new crop of beauty companies, so much and so that it became a unicorn after its latest circular of funding in March 2019. How has the company achieved this feat? Glossier started originally as Into the Gloss, a beauty blog that profiled celebrities and customers in intimate pieces well-nigh skincare and makeup habits. The first iv products were launched in 2014, reaching $100 1000000 in acquirement in 2018.

We accept identified the following as keys to success for this innovative Direct-to-consumer (DTC) brand:

Digital presence and marketing: Emily Weiss, the founder, is considered by many to exist an extraordinary entrepreneur, and has translated the ethos of her blog into a successful (and growing) product line. What Glossier is best known for is its use of social media to build a very strong and instantly recognizable brand. Glossier pinkish, the color at the base of the company's branding and color scheme, has become universally recognized by dazzler customers, then much so that the hashtag #glossierpink has been used over 22,000 times on Instagram. In fact, Emily Weiss famously treats all of her customers equally influencers and content creators for the brand. She was able to leverage the engaged customs that followed the weblog and plow that into a committed and loyal customer base.
Product innovation: Glossier approaches product innovation in a very similar vein: they regularly consult with customers on the way they use the visitor's products, on their wishes, and even have a dedicated slack channel with the 100 best customers, which is used effectively as a highly engaged focus group.
Channels and distribution: Again, the approach that Glossier uses is extremely consistent, and based entirely on customer feel. The following quote from Emily Weiss illustrates this best: when asked in an online Q&A whether she was planning on partnering with retailers for the distribution of Glossier, she replied "Great question! One of the things we strongly believe, as a client-centric company, is that we tin't course the meaningful relationships that we value with our customers if we sell through other distribution channels. Being able to communicate and engage with our customers beyond various channels, and ensuring that we are delivering the truthful Glossier customer feel, is challenging if we become through other channels. I love discovering dazzler products at all sorts of retail environments–for united states of america, information technology'southward not about what retailers are doing wrong, but more than so ensuring we are able to deliver the Glossier customer experience that we're proud of."
Pricing strategy: Finally, even in its pricing, Glossier is consistent in its inclusivity: the products are positioned between mass-market place and premium, thus being an affordable luxury for its young client base.

The Ordinary

The Ordinary, much like Glossier, was born from the vision of an extraordinary founder, Brandon Truaxe. He was (he has unfortunately passed in tragic circumstances) a believer in the necessity for transparency and innovation in the dazzler industry, and sought to do then by launching a skin-intendance line (amongst other products in the range of the parent company, Deciem) that is projected to achieve $300 one thousand thousand in sales in 2019. He did so through an extremely radical product idea: The Ordinary sells products based on unmarried active ingredients at extremely low prices, which can then be mixed and matched by consumers for their specific needs. This creates an affordable and extremely personalized experience.

The keys to success we've identified for The Ordinary are the post-obit:

Digital presence and marketing: The Ordinary strongly utilized social media to build a make connection and engage with their customers, every bit well equally very conspicuously and strongly building a brand. They were initially renowned for responding to each private message and annotate. The make was congenital on scientific rigor and a minimalistic aesthetic. Deciem and The Ordinary are however as well a cautionary tale for the dangers of social media: Brandon Truaxe's personal problems and conflicts with investors were prominently featured on the company's Instagram for a long period, which created intense (and at times morbid) interest in the visitor, and not necessarily in a positive style.
Product innovation: This is undoubtedly the main reason for The Ordinary's boggling success (a success such that many products were on countless waiting lists and were effectively existence sold on the black market place). The brand tagline goes "Clinical formulations with integrity," and summarizes the approach. The focus of the company is selling effective ingredients and formulations, that can then be integrated by the consumer. The focus is on product, and product only, with very limited spending on packaging and marketing. The belief here was that if the product is valid, that in itself is sufficient marketing. The following quote from the founder describes what he thought this to hateful: "Brand loyalty in the beauty industry is almost nada because the products don't piece of work or they over-promise," says Truaxe. "What we're doing differently is simply not promising what is not in that location." This extreme focus on effectiveness is also the issue of farthermost control of each phase of product development: everything is done in-firm.
Channels and distribution: Deciem never spent on advertisement outside of its social media pages. The product is sold online, through flagship stores, and through a retailer network.
Pricing strategy: This is where The Ordinary absolutely stands out. The brand was built on selling products at extremely low prices, with most products sold for less than $10, a precipitous contrast to more than complex formulations with similar active ingredients and significantly higher mark-ups. Most products, in fact only carry the name of the active ingredient and the strength, such as Niacinamide or Hyaluronic Acid. Truaxe bankrupt downward the price of a production that retails for $five.eighty as follows: "Our Vitamin C Powder is the best example. There are about 20 cents of vitamin C in it, and about 5 to 6 cents of other ingredients, and then the tube is near twenty cents and the box is about ten cents. I mean, the production costs less than a dollar."

Decision

The innovators in the beauty industry, and Glossier and The Ordinary in particular, tin can give very precise guidelines into what makes a consumer make a success: knowing the strength of the company, whether it is consumer experience or product, building a simple and clear brand based on the company's ethos, and extreme control over all aspects that define the focus in order to ensure constant quality. These are invaluable lessons for any entrepreneur.

If yous are interested in a customized manufacture deep swoop, yous tin can work with Toptal's market research specialists and Toptal'south consulting team.