Social media influencer marketing – a new age in skincare marketing!

Humans have become increasingly aware of the importance of taking care of their skin and hence have been and are using products in an attempt to enhance their appearance. Hence, the beauty and skin care industry is continually changing, evolving and diversifying.

It is undeniable that we are more concerned about our image than ever. The biggest reason for becoming so aware is due to the omnipresence of social media and the ‘selfie’ craze. In this new digital landscape, all the cosmetics brands today have realized that digital excellence is at the heart of change and a very important aspect in the prestige beauty market, especially in the skin care market. Although as of today, the contribution of pure online sales is relatively very small, it is yet to be known how much of this is due to the effect of online influence on social media. Even today, the majority of sales is still taking place in pharmacies, department stores, specialty stores but it cannot be denied that digital channels have become the primary arena for consumer decision making. Established and challenger brands alike are now primarily authenticated by online influencers. Devising an online strategy has become a must for all concerned brands because online presence and branding is the new age marketing.

Brand switching is increasingly on the rise as pure brand power is constantly challenged by online influencer power. As a result, online sales despite being relatively small is growing fast as it is boosted by the rise of ‘social commerce’.

Source: TouTube

The skin care market is a robust market that is compelled to evolve, adapt and diversify with the growing consumer demand which in turn is driving the innovation in the industry. Since skin care has the largest share of the beauty market currently, major scientific breakthroughs are also happening in order to address the consumers that call for more natural and effective ingredients. It is quite evident now that such demands and trends are all aiming at transparency i.e. consumers are looking for truth as they no longer believe in glossy, ‘larger than what is it’ type of ads and campaigns.

In order to stay relevant with the changing customer expectations, brands are moving away from their traditional strategies and switching to social media marketing which is responsible for attracting online traction and traffic. Typically, small and upcoming niche brands are adopting this way of marketing thereby benefitting largely and driving away the established brands out of dominance. So, what are they doing?

What lies at the center of the social media strategy? The answer is the influencers. Because they become examples for consumers to know how the products are working on real people. They post, reviews, tutorials, and experiences on social platforms along with their established credibility have garnered a larger audience and influences their decision making. They are key because they build personal touch and cultivate brand communities. Lets us look at few examples to understand the impact of social media influencing.

According to an L2 report shared by Mobile Marketer, Olay, the skincare brand owned by P&G spurred a 20% gain in consumer engagement from a social media campaign where they collaborated with influencers and asked them to document their experiences for a month while using the products and updating their followers along the way. This campaign was conducted in November 2017, where influencers offered free product samples and discount coupons with unique codes and mentioned links in their posts to encourage followers to participate in the challenge. This campaign resulted in a 22% increase in monthly google searches and boosted the online engagement which in turn led to online sales.

Source: Instagram: @alexsteinherr

According to a recent report by Traackr, the influencer relationship management platform, the luxury brand La Mer, owned by Estee Lauder, has wielded its status as a highly coveted brand in tandem with social media influencers in a manner earning the brand the most social media engagement in the first half of 2018. The brand could achieve this without sacrificing their authenticity or lowering the price tags. The brand became the most talked about skin care brand on social media thanks to the 12 million engagements on Facebook, Twitter, Instagram, and YouTube. The luxury skincare brand partnered with 1529 social media influencers which notably includes the likes of former beauty director of Glamour Alessandra Stenheirr, Heart FM radio DJ and presenter Lilah Parsons and make-up artist Patrick Ta. These engagements accounted for the mentions, engagements rates, potential reach, conversion rates, number of activated influencers and influence by channel.

The best part of social media influencer marketing is that the impact of the marketing campaigns is more of less measurable digitally. One more unconventional but notable example is that of a brand named ‘Swedish Skin’ that launched its products using social media only for 100% of its marketing. In one of his past interviews, the CEO, William Byrd went on to record by stating that the brand’s strategy involves “paying YouTube ‘skincare gurus’ to talk about my products” so that “their viewers see the products and visit the Swedish Skin website”. For such brands, the social media influencers lie at the heart of their marketing strategies.

There are several such examples that reinforce and prove the reach and conversions brands have achieved through social media influencer marketing. Consumers demand honestly and authenticity and tend to believe the influencers by expecting that the influencer content is genuine and realistic. Thus, influencers have a profound impact on consumers contemplating a purchase. Based on the company’s objectives the influencers can help in various ways like:

• Increasing brand awareness
• Driving traffic to distribution channels both online/offline
• Encourage product purchase through affiliation
• Promoting an event or product launches
• Boosting business volumes
• Building brand community

It is evident from this analysis that influences play a key role in the social media marketing strategies devised by the skin care brands in order to remain relevant and secure future growth. Do you agree?

 

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Resources:

Nikola Kinski (June 23, 2017) “A perfect match: influencer marketing and the beauty industry”, Upfluence.com (online) retrieved from

https://upfluence.com/influencer-marketing/influencer-marketing-beauty-industry

October 1, 2018, “Luxury skin Care Brand earns most social engagement from top beauty influencers”, a new online report from Traackr (influencer relationship management platform) on the state of influence in skin care demonstrates the power of influencers in beauty marketing retrieved from

https://www.bizjournals.com/losangeles/prnewswire/press_releases/California/2018/10/01/UN23489

Emily Dobell (October 20, 2010), “Social media marketing allows for a new generation of sales strategy”, Cosmeticsdesign.com (online) retrieved from

https://www.cosmeticsdesign.com/Article/2010/10/21/Social-media-marketing-allows-for-a-new-generation-of-sales-strategy

Robert Williams (March 5, 2018), ” L2: Olay boosts engagement 20% with influencer skincare challenge”, Mobile Marketer (online) retrieved from

https://www.mobilemarketer.com/news/l2-olay-boosts-engagement-20-with-influencer-skincare-challenge/518349/

 

Inside the changing skincare market – Invest or Acquire?

The overall skin care market growth is characterized by the rapid emergence of new brands, new geographies, new subcategories, all coupled with worldwide acceptance and adoption of digital technologies. But at the company level, this growth is constantly challenged by trending new concepts and technologies of marketing and distribution of products. As a result, traditional brand strategies have given away to adapt to the new consumer requirements.

Brand power is now grappling with new changing realities. The scale of business and the distribution management is facing a tremendous challenge by the explosion of online sales, the emergence of specialty stores and brands with capabilities to disrupt the market. Small innovation or slight modifications that were earlier the major success driving factors for big established corporate brands are strongly challenged by disruptive innovations of challenger brands leading to the rapid demise of sub-category lifecycle. Conventional strategy for all leading brands was to be present in maximum categories – being ‘everything to everyone’. This business model is rapidly collapsing due to the fragmentation of markets as the consumers are picking the best from each brand and mixing them all. Most importantly, the new age marketing has to accept and embrace the explosion caused by the burst of digital technologies. Today consumers love to follow and believe online opinion sharing, rating, and influence from a diverse group who create a connection between brands and them through social media. Another very significant sea change in the skin care market is moving to ‘organic’ or natural ‘products’ which has become ‘The Trend’ that is mostly promoted by the upcoming challenger brands.

Source: prweb.com

The leading skincare brands are increasingly responding to these changes majorly by investments, mergers, and acquisitions, or creating new product lines in order to accelerate growth. This seems to be a work in progress for many brands, but the leading brands are doing it actively. They have become aggressive on creating cleaner options and make natural products more accessible than ever.

Skincare earlier used to be an extension to fashion, now it is predominantly becoming the extension of personal health care. For any skincare product, the existence of only two or three options is taken over by the availability of several choices that too from great brands that offer the best quality and varieties. This trend of being natural in the skin care market was first started in the food and health space which has eventually rubbed off on skin care and beauty products. This viewpoint was brought up by Stacey Goldstein, director of Garnier skin care marketing. The biggest reason for all the leading brands to ride in the wave of ‘making natural and organic’ products is the increase in the emergence of ever-growing mega-retailers like Nordstrom, Sephora who offer natural products as the demand from consumers is very much on the rise. To begin with, the leading companies such as P&G, Estee Lauder have either invested in or acquired in clean brands considering the fact that their existing production facilities just cannot switch to the different natural ingredients immediately or remove existing ingredients. However, their arch rival company namely Unilever has invested its own resources and started to manufacture cleaner products from scratch as they anticipate the revolution the ‘green wave’ is going to bring. Their in-house brands have started to create new skin care lines with launches planned in years to come. Every big player in the skin market realizes the awareness of their consumers’ knowledge by their increasing label reading habits and the level of information they have. They are accepting the sophistication and the involvement of their buyers as their awareness in knowing the ingredients has grown multi-fold. Today’s buyers are more conscious of the products and ingredients they are consuming than ever. The phrase ‘making better choices’ is now no longer limited to food and health but it is becoming the phrase also for the skincare industry as the demand to know ‘what’s in the product’ from the consumers has risen tremendously.

Source: Deloitte market research

Since the bigger brands are increasingly challenged by the growing list of challenger brands offering green and vegan products, the bigger brands are also making efforts to either take over the smaller worthy brands or they are themselves debuting with cleaner products leading to availability of choices everywhere from grab and go drugstore or pharmacies, special boutiques and to a great extent also department stores. Over the past few years, niche brands such as NYX, Glossier have been become the trendsetting brands, encouraging more M&A from global brands as they seek to acquire small yet successful players to either bridge their portfolio gaps or fill new categories or meet the demands of the trends.

Source: Deloitte market research

Some of the recent significant acquisitions have been by L’Oréal purchasing NVX and IT Cosmetics or Estée Lauder’s purchase of Becca & Too Faced. Over the last few years, acquisitions of emerging skin care brands by global players are on a tremendous rise reflecting the preference for skin care’s higher profit and growth margins and the market potential. Of late, Unilever has been the most acquisitive brand of the leading companies by the number of acquisitions in the skin care market by acquiring brands like Dollar Shave club, Dermalogica and so on. Other predominant purchases in the skin care industry have been seen from Estée Lauder and L’Oréal. Although there have been massive investments by some leading companies on innovation and introduction of new skin care product lines, with 90% of such launches failing within 12 months, the fastest and most reliable route to growth and standing still as a leading brand is an acquisition.

 

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References:

Market research by Deloitte in 2017 on “Shades of success: Influence in the beauty market”, an online report in pdf retrieved from

https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/international-business-support/deloitte-cn-ibs-france-beauty-market-en-2017.pdf

Rachel Lapidos (December 18,2017) “The skin-care sea change: Inside big beauty’s massive move to non-toxic and natural products”, Well Good (online) retrieved from

https://www.wellandgood.com/good-looks/clean-beauty-business-is-growing-among-biggest-brands/slide/2/

 

Let’s talk a little bit about the skin care market…

What is skin care? “It is the range of practices that support skin integrity, enhance its appearance and relieve skin conditions. Skincare is at the interface of cosmetics and dermatology with some overlap among the two.”

Source: Wikipedia

The global skin care market is broadly segmented by product categories namely face cream, skin brightening cream, anti-aging cream, sun protection cream, body lotion etc. The value chain in case of skin care markets consists of raw material suppliers, manufacturers of skin care products, distribution channels primarily wholesalers then retailers leading on to the end users. The retail distribution is different for each product category and managed accordingly through pharmacies, salons, home stores, supermarkets and so on. The branding strategy around each is devised by the brand.

It is a fast-growing and ever-expanding market, inclusive of over the counter drugs and prescription drugs. As per a leading market research company, skin care is the leading category valued at € 130 billion accounting to about 36% of the total global cosmetics market in the year 2016. According to a new report by Grand view research, Inc., the global skincare market is forecasted to reach USD 177.15 billion by 2024 growing at the rate of 4.7% from 2016 to 2024. These market values are established based on the current consumption patterns, the past market trends but most importantly because of the rising awareness about the advantages of skin care products accompanied by proven customer feedback and results. Also, a great portion of this business is contributed by the extensive accessibility created by the explosion of e-commerce.

The global market is facing both industry-wide and market-specific drivers and restraints such as patent expiration, variable drug/raw material pipeline, emerging markets/brands/technologies, and the emergence of biologics. Also, concepts such as organic and natural products are emerging to become popular and most sought after products as they are aimed at eliminating the harmful effects of synthetic products. This rising awareness and acceptance have forced manufacturers to invest more in R&D and innovation and build their marketing strategies around it.

The global market is becoming highly competitive with a lot of multinational brands such as L’Oréal, P&G, Unilever, which provide a vast array of products. But in spite of leading and driving the markets, these brands are increasingly facing the heat from a number of new brands intending to shake up the industry. These challenger brands that are mostly consumer-focused with an inclusive mindset are taking over the likes of leading brands as consumer favourites.

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References:

Simeon Pinder (July 9, 2018) “The Global Skincare and Dermatology market from 2018 to 2028”, Market Research.com (online) retrieved from

https://blog.marketresearch.com/the-global-skincare-and-dermatology-market-from-2018-to-2028

April 2018, Electronic (pdf) report “Skin care products market worth $177.15 Billion by 2024, CAGR 4.7%”, Grand view research (online) retrieved from https://www.grandviewresearch.com/press-release/global-skin-care-products-market