Raconteur

The Beauty Economy Special Report 2016

Issue link: https://raconteur.uberflip.com/i/754704

Contents of this Issue

Navigation

Page 2 of 15

DISTRIBUTED IN CAROLINE BRIEN Award-winning freelance journalist and former beauty features director of Marie Claire, she contributes to the Financial Times. BENJAMIN CHIOU Business and lifestyle writer, his specialisms include financial markets, economics and technology. ROSIE GREEN Award-winning journalist, she is beauty editor at large of Red magazine, and was beauty director at both Red and Elle. LEAH HARDY Health and beauty writer, she is a regular contributor to The Times, Daily Mail, Red and Grazia magazines. CAMILLA KAY Former associate editor of InStyle, she is co-founder of Gloss & Content creative, with clients including Marie Claire and Cosmopolitan. JOSH SIMS Freelance writer, he contributes to the Financial Times, Wallpaper* and Esquire, and is editor of Viewpoint. CATHERINE TURNER Health and beauty writer, she contributes to Porter, Psychologies, Tatler and Condé Nast Traveller, as well as studying and teaching yoga. RACONTEUR DIGITAL CONTENT MANAGER Jessica McGreal HEAD OF PRODUCTION Natalia Rosek DESIGN Samuele Motta Grant Chapman Kellie Jerrard BUSINESS CULTURE FINANCE HE ALTHCARE LIFEST YLE SUSTAINABILIT Y TECHNOLOGY INFOGRAPHICS raconteur.net/the-beauty-economy-2016 CONTRIBUTORS Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership in- quiries or feedback, please call +44 (0)20 8616 7400 or e-mail info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, finance, sustainability, health- care, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been ob- tained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media Future of beauty is looking good The beauty industry has a history of bucking economic trends and looks set to ride out possible turbulence with promising projections for the rest of the decade OVERVIEW LEAH HARDY Share this article online via Raconteur.net Dimitrios Kambouris/Getty Images AHMED ZAMBARAKJI Grooming editor of Shortlist Mode and formerly with Arena, he is a regular contributor to Mr Porter, GQ, GetTheGloss and AskMen. PUBLISHING MANAGER Michelle Ingham PRODUCTION EDITOR Benjamin Chiou MANAGING EDITOR Peter Archer Victoria Beckham (centre) at the launch of her eponymous make- up collection in collaboration with Estee Lauder at Bergdorf Good- man in September estimated size of the global cosmetics market by 2020 $675bn Source: Research and Markets 2015 PUBLISHED IN ASSOCIATION WITH T hese may be times of glob- al uncertainty, but when events get ugly, the beauty industry is able to sit pretty. Analysts at Research and Markets predict global cosmetics sales will reach $675 billion by 2020. While in the UK, according to the Cosmetic and Perfumery Retailers Associa - tion (COPRA), sales have topped the £4 billion mark for the first time, overtaking the French market. "It's been an exciting year for the beauty industry," says COPRA vice chairman Rakesh Aggarwal. "The UK market is now twice the size of the Ital - ian and Spanish beauty markets, and only Germany is bigger in Europe." Premium cosmetics are boom- ing despite, or possibly because of, economic worries. Leonard Lauder, Estée Lauder chairman, coined the phrase "the lipstick index". When budgets are tight, he opined, women seek their retail therapy from a rela - tively inexpensive lipstick. According to COPRA, the UK beauty market has seen double-digit growth in make-up sales with the prestige, luxury market accounting for £2.4 bil - lion – a jump of £110 million over 2014. "The strength in colour cosmetics sales growth lies in luxury products, which are growing at nearly twice the pace of the mass market," says Char - lotte Libby, senior beauty analyst at market research company Mintel. Social media has also influenced de- mand. Beauty retailer Space NK has seen a 27 per cent rise in sales of high- lighting, contouring and concealing products for the perfect selfie. This year's highest profile cosmetics launch was Victoria Beckham's glam- orous collaboration with Estée Laud- er, which saw the former Spice Girl offering a tutorial for her 12.9 million Instagram followers. Its combination of luxury, digital and personalisation encapsulates key beauty trends. Wendy Lewis, founder and edi - tor in chief of lifestyle blog Beau- ty in the Bag, says: "Digital beau- ty is all about enhancing the customer experience. We all live 24/7 on our devices and beauty brands have capitalised on this megatrend." Ms Lewis says the hottest digi- tal platforms at the moment are Instagram, which has more than 400 million active monthly users, and Snapchat. According to Mintel: "Brands are utilising platforms like Snapchat, WhatsApp and Facebook Messenger to instantly connect with consumers and offer superior levels of customer service." The market researchers predict that in the future people will "speak as easily and informally to brands as they would their friends". Celebrities, bloggers and vloggers remain important as influencers. Mintel says 20 per cent of make-up buyers seek out products to create looks they've seen on video tutori - als, while 16 per cent say they buy from brands that have collaborated with their favourite designers, ce- lebrities and bloggers. Kathy Wrennall, founder of social media marketing agency Not Just Powder, says: "Seventy four per cent of consumers rely on social media to make a beauty buying decision." However, Ms Lewis cautions: "Con - sumers are being inundated with influencer content and have become more selective. Authenticity is cited as the key differentiator as beauty buyers decide whose opinion matters." This has led to a growth in inter - active, consumer-generated con- tent. Despite hav- ing no background in the beauty industry, Julia Langton founded a Facebook beauty group, Mrs Gloss and The Gloss, in June 2015. It now has around 30,000 members and sees 300 posts a day. She says not only do members rec - ommend existing purchases to each other, but "people will take a picture of a lipstick in- store, ask if it's any good and get replies instantly before making a decision to buy". Social media platforms have helped niche brands grow. Dedicat - ed beauty stores offer a curated se- lection of small brands, which have often found online success first, and department stores are increasingly following their lead. "Online has changed the econom - ics of the business," says Javier Es- calante, an analyst at Consumer Edge Research in the United States. "Winners are the tiny companies." Grace Fodor, founder of Studio 10, aimed at the beauty market for older women. "Digital is a level playing field. Thanks to social media and influenc - ers, we can both be a global brand and connect intimately with our custom- ers. We can listen to them and respond to their needs as they age," she says. "The average woman spends £43,000 on beauty between ages of 50 and 70. Research shows 62 per cent of beauty products and toilet - ries are purchased by over-45s." However, research by IM Associ- ates found fewer than half of these women enjoy buying beauty prod- ucts in-store, as they are alienated by young assistants, leaving them rich pickings for e-tailers. According to COPRA, online sales enjoyed a 38 per cent sales boost last year. Analysts at Verdict Retail pre - dicted an 80 per cent growth in the online health and beauty market be- tween 2015 and 2019. Ease of purchase and 24/7 availability is important. But Mr Aggarwal, who is chief ex- ecutive of e-tailer Escentual, adds: "The market is also very driven on price. UK retailers offer the most generous discounts in Europe." Ms Wrennall concludes that stores win for hands-on experiences and glamour. But better customer care and personalisation, with live ad - visers or increasingly sophisticated chatbots, or in the case of Avon a new digital platform consisting of a 24/7 online site run by a local repre - sentative who can even hand-deliv- er items, means going online is be- coming an alluring alternative. RACONTEUR raconteur.net 03 THE BEAUTY ECONOMY 24 / 11 / 2016 THE BEAUTY ECONOMY

Articles in this issue

Links on this page

Archives of this issue

view archives of Raconteur - The Beauty Economy Special Report 2016