You would think that a business as well established as the cosmetic business would not see a lot of disruption. I mean, customers try products, select the ones that they like, and that’s the end of the story, right? Well, it turns out that in the cosmetics business product managers at some of the smaller firms are in the process of changing how things are done. This is big news because they are going after the next generation of cosmetics buyers: the millennials.
New Arrivals In The Business Of Beauty
New beauty brands have shown up in the market being driven by millennial buyers who buy more cosmetics and skin care than any other demographic. These brands have seen huge growth over the past few years, grabbing market share from the big, established names. The new brands are connecting with a new generation in a number of new ways. They focus on a new product development definition that includes organic ingredients, personalized service and customization of their products, such as serum meant for a specific type of skin. They also largely sell their products online, and lean heavily on both social media and influencers for marketing, where many of their millennial customers turn for guidance on products.
At stake is a share of the global cosmetics-products market, which is expected to reach US$805.61 billion by 2023, up from US$532.43 billion in 2017. In a 2017 report on the cosmetics industry, researchers found that “small is the new big,” and they noted that “global brands are losing share as small brands and disruptors are gaining.” For an idea of the inroads new brands have made, look at the prestige end of the cosmetics market—a $78 billion chunk that encompasses brands not typically sold at drugstores, such as Shiseido and Clinique. From 2010 to 2015, the 10 largest prestige brands dropped in their market share to 40% from 46%. Niche, independent brands, meanwhile, grew to more than 25% from 20% in the same time period. Growth like that would look good on anyone’s product manager resume.
The gains made by new brands have not been confined to the prestige niche. They’re also making big gains in makeup – the fastest-growing segment of the overall global beauty industry. Makeup has always been dominated by giant conglomerates, but the fastest growth belongs to independent brands. In color cosmetics, challenger independent brands only account for 10% of the market, but are growing four times faster than their legacy competitors. But just how long new brands will stay “new” is an open question. Large cosmetics companies are trying to latch onto new firms success by buying stakes in small brands. Legacy companies and investors have invested $3 billion in independent beauty brands over the last decade.
The Challenge Ahead For Cosmetic Product Managers
A good example of what has been going on in the cosmetics industry is shown by the product managers at True Botanicals. The skin-care line, launched in 2013, has proved to be one of the most successful of the new brands. Like many upstart cosmetics makers, their product managers have emphasized its green appeal, but they have taken it one step further, getting all of their nontoxic, essential-oil-based products certified as Made Safe, an organic-on-steroids certification that assures that the products include no harmful chemicals.
The product managers at True Botanicals are also using common startup strategies to connect with customers. The product managers pair online sales with personalized customer service that includes online skin consultations with an expert. And the product managers have courted social-media influencers and celebrities.
Other big new-comer winners in recent years include Glossier; Korean face-mask kit maker Hanacure; and Ordinary Co., part of a company purchased by Estée Lauder in 2017. Like True Botanicals, they tend to focus on nontoxic ingredients and customized products and customer service. Still, this isn’t the only formula. Glossier, launched by beauty blogger Emily Weiss, tends to focus more on efficacy than ingredients. Their priority is to create the best products and experiences for their customers. Their product manager are able to achieve that with an all-natural formula in certain cases, and in others they make the decision to add safe synthetic ingredients.
What All Of This Means For You
One would think that the cosmetics industry would be a fairly boring place for a product manager to work. I mean, everyone already has their favorites and nobody is really all that interested in switching beauty products, right? Well, it turns out that we’d be wrong. There are a host of new start-ups that are at work in the beauty industry and they are in the process of turning things upside down. The product managers at these firms have found ways to use their product manager job description to target the biggest market in the cosmetics industry: the millennials.
The new brands are succeeding because they are being purchased by millennials who buy more cosmetics than anyone else. They sell their products online and they use social media to promote them. New cosmetic products have done especially well at the prestige end of the beauty business. Likewise, they have done well in the makeup portion of the business. True Botanicals is an example of these new firms that has created certified new green products. True Botanicals sells their products online and offers personalized customer service. Other firms such as Glossier attempt to match their products to their customers.
The cosmetics business is big business. The product managers at new startup firms are searching for ways to break into this market. They are using innovative online and social media tools to reach their primary target market. What they are doing seems to be working. We’ll just have to keep our eyes on them and see how their strategies change as their firms grow larger.
Question For You: Do you think that start up firms should expand into department stores?
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What We’ll Be Talking About Next Time
What We’ll Be Talking About Next Time
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