Do legacy brands still have the upper hand in the beauty industry?
Do legacy brands still have the upper hand in the beauty industry?
It’s earnings week for two big beauty brands: the affordable E.l.f. Beauty and luxury brand Estée Lauder, which announced its cutting thousands of jobs. The two companies are reporting earnings as many companies and entrepreneurs are throwing their hat into the cosmetics and fragrance ring.
If you’re going to launch a beauty brand these day, you really have to bring it, said Eva Yean, founder of the consultancy Love Life Beauty.
“When there’s so many gladiators already there, why are you coming into the arena to fight?” she said. “What do you have to offer that’s different?”
It’s an evolving business — influenced heavily by the ethos of Gen Z, per Ildiko Juhasz with the Fashion Institute of Technology.
When young people dab on a fragrance, “they want to express themselves, they want it to boost their mood. They’re not necessarily doing it to seduce somebody else,” she said.
Gen Zers also don’t necessarily want to buy beauty products in a store unless there’s a hook.
“Is it an appearance from, you know, a brand founder? Is it a celebrity appearance? Is it like there’s a sampling program happening?” said Juhasz.
This round, it’s Gen Z — but legacy brands have always had to keep redefining themselves to stay relevant, noted Katie Thomas with the Kearney Consumer Institute.
“In a lot of ways, besides for a couple of products, it’s not always an incredibly loyal category and that you’re going to stay there for years and years and years,” she explained.
One way brands — new and old — may pitch themselves this year is by focusing on the science behind their products: “So a lot of talk of, you know, peptides or perhaps at home tools,” Thomas said.
And legacy brands who have invested big bucks in research and development may use that as a selling point, according to Mintel analyst Lauren Goodsitt.
“Bringing that to the forefront so that while consumers are out doing their research, trying to find the best products, the best brands, they’ll see that proven efficacy and know that it is a brand that they can trust,” she said.
And earning trust also depends on having the right messenger, says Melissa Hibbért, founder of SHYFT Beauty Consulting Agency. Instead of relying on celebrity influencers who have paid thousands of dollars for plastic surgery, consumers want more authenticity.
“The jig is up, the veil has been pulled back and, you know, and brands know it now — they cannot, they cannot keep moving in that direction,” she said.
Brands can build that trust, she added, by working with nano-influencers who have niche audiences.
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