�xperimentation, �abits � Inspiration

By Scott Hendry Proximity London May 2011 The Influence of Digital in the Beauty Industry

Contents

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Introduction 04

Experimentation 08

Stuck in a Rut 14

Rediscovery 20

Men Care too

Summary 26

Conclusions 28

Sources & Thanks 29

How we learn, our influences, what we buy, and how and what media

we consume have all changed over the past 20 years since the emergence of digital.1

As digital channels have matured and developed, they have amplified, democratised and accelerated behaviours that have been happening offline for many years – think ‘friends chatting over coffee’ and sharing now happens on a larger scale through Facebook or Mumsnet2. Yes, we might talk about these topics slightly differently, but we share a lot of what we think and know to a much wider audience.

So, how has this amplified sharing, content creation and access to information brought changes to women and their relationship with the beauty industry?

To answer this question we have looked at how digital is influencing women and their experience in the world of beauty. But of course, women are not one homogeneous segment, so we have categorised our beauty consumer through three significant beauty life stages:

n Experimentation – teenagers to early 20’s, learning and experimenting with their beauty rituals.

• How are they learning about beauty products?• How are they introduced to their first products?• What experimentation are they doing and what has influenced this experimentation?n ‘Stuck in a Rut’ – mid to late 20’s to early 40’s with established beauty rituals. Because of the demands on them from their family and work, beauty has become a lower focus.

• Has media and in particular, digital,altered these rituals?

n Rediscovery – late 40’s to early 60’s are rediscovering their inner youth and are trying to bring this to their outer self.

• How do they rediscover this ‘youth’ through beauty?

• What are the influences they look to for help in developing their new look?

• Does digital allow them to be more confident in finding a new look?

Finally we also delve into the evolving world of male grooming. A relatively small segment within the beauty industry, but one that seems certain to grow.

IntroductionExperimentation, habit and inspiration summarises how the beauty industry has carefully nurtured its relationship with women over many years. But how has the emergence of digital changed or reinforced the relationship between the beauty consumer and brands? 40’s

20’s30’s

05042 77M US women aged 18+ are on Facebook. Source: Facebook

1 Consumers devote 6% of their media time to reading magazines, the beauty industry spends almost 45% of its marketing budget on them. Kantar Media, October 2010; Samir Arora, Glam Media Presentation, October 2010

Experimentation, Habits and Inspiration provides an overview into some of the emergent behaviours and trends happening through digital channels which are

influencing the beauty consumer now and in the future.

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20’s

Experimentation

For those in their early twenties and younger, many

have only ever known a world where the internet existed – they are truly, digital natives.1

Embracing it first as content creators and now as the first choice for sharing with friends and the wider world, how is this impacting their relationship with beauty products in the digital world?

As they have grown up with digital channels, more than any other segment, they look to digital sources for support. And while much of the discovery and sharing of opinions on brands is done offline (face-to-face & phone), growing levels of online exchange are occurring.

Trying Before BuyingThey are at a stage where they are eager to change and experiment with their look. Beauty brands that embrace digital have the opportunity to support them in the discovery of a self-identity as well as build their self-confidence safely through tools offering low or no risk try before they buy. Two similar themes build on this:

The wisdom of crowds – before buying a product you can now go online and check out whether the product is right for you.

Real time reviews – using friends or virtual tools to provide feedback on your image and product choices. No longer do you have to wait until you purchase the product and use it.

Real Time Reviews — L’Oréal’s Virtual MirrorThe Virtual Mirror allows women to take a digital photo and then, using the mirror scan in different products, colours or shades using the touchscreen to match their skin tone or eye colour.

It was originally designed as an in-store tool, but with growth in touch screen computers/ tablets this would seem to be an application that could be extended into the house.

Wisdom of Crowds — MopShotsHaircuts are submitted by anyone and then judged by fashion experts (bloggers, tastemakers etc) before being uploaded to the site. Information such as where the haircut was done, hair colour and style are provided and able to be searched.

While focused on haircuts, it’s another tool that can be easily adaptable for personal colouring and cosmetics.

(Teenagers to early 20’s)

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Source: Forrester 2009

1 77% of 13 to 16 year old European children have a social network profile. Source: www.eukidsonline.net

Wisdom of Crowds — Creating Your ImageNow you can ‘product test’ your image through a virtual focus group. Using a website www.checkyourimage.com you can upload photos of your clothes, face etc and then choose how many people you want to give feedback on for example your hair and makeup style.

Make it Easy to Share Products, VirtuallyBrands providing guidance or support and utilising the inherent social sharing behaviour of this group will drive deeper engagement with them and have the potential to build long standing loyalty. Particularly those offering women the capability:

n To provide Product Recommendations – Sharing with friends the products that interest them.

n To listen to others for Product Advice – Women also listen to friends and family for tips and advice on products

n To use Social Media – Use the channels they are engaging with on a daily basis. Provide relevance and value in these channels and make it easy for them to share and experience the products and with the opportunity to gain traction.

Interactive Magazine — ShisheidoDigital magazines are a growing trend across many industry segments and for the beauty segment they seem an obvious opportunity. In Japan, Shisheido has an interactive manga (a Japanese genre of cartoons, comic books, and animated films) to connect with its young beauty consumers. Using a number of manga stories to talk about health and beauty.

What beauty magazine across Europe or the US would develop a magazine without photos of models promoting brands?

Does this translate across countries to a need for online environments to consider new content styles for connecting with specific segments for example, girls just entering the beauty sector?

Key Takeouts – Experimentation Be a facilitator of existing behaviours:

• Productreviewsandtipsfrom peopletheytrust–helpmakesocial mediaapeer-to-peersearchtoolfor

them

• Makeiteasyforthemtoshare content

• Allowthemtointeractwiththe product,virtually

• Theychangelooksandexperiment heavily.Usedigitalchannelsto amplifythisbehaviour

• Embracedigitalasanenablertoallowthisaudiencetobuildabeautyidentityandselfconfidence

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Teenagers 45%Adults 26%

0%

10%

20%

30%

40%

50%

Teenagers Adults

Source: Keller Fay Group 2010

Percent of segment who share a conversation everyday about a Beauty product

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40’s20’s to

Traditionally viewed as the group most strongly entrenched in their beauty ritual, they are likely to

have clear views on what beauty products work for them.But they are also the group who go through significant change from being single, ‘all about my looks’, to motherhood, ‘I simply don’t have the time to focus on that’.

Engagement & SupportPre-Motherhood women are already an important group to the beauty industry. Any brand that can connect and build deeper engagement with this group at a key life stage, have the opportunity to build longer-term loyalty, simply by becoming part of their beauty ritual.

While many ‘At Home Mums’ see social media as the main outlet away from the kids and an essential connection with the outside world. In becoming a mother, a growing sense of losing their identity can occur. Many also fear losing touch with what are the current beauty trends and this is a stage where they can too easily drop out of the beauty sector.

Brands that can empower women to get their self-identity back through providing careful guidance, easily digestible content and engagement can overcome this barrier.

Engagement — Digital Launch of New ProductsMama Mio a UK based skincare brand, launched a new waist shaping serum using a debut song by the band Belle and the Buttons called ‘Check Me Out’. Seeded via music blogs and social networks (MySpace & Facebook) and with no media spend.

While the number of views on YouTube (46,000+) and Facebook fans (8,000+) doesn’t necessarily suggest large scale cut through, it points to a way brands will be looking to build awareness and engagement in the future.

Stuck in a Rut(Late 20’s to early 40’s)

“I feel under pressure to look as good as I can”

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“I feel under pressure to look as good as I can” % who agree or agree strongly, by gender, age

Source: nVision 2010

% who agree or agree strongly, by gender, age and social grade

Source: Microsoft Advertising 2010

This suggests some women are starting to buy cosmetics and beauty products online. It is in its relevant infancy, but some brands are now embracing this.

eCommerce — Max Factor UK

Support — By Lauren LukeLauren Luke is a former taxi-dispatcher from South Shields, UK. Her meteoric rise within the beauty industry highlights how she identified and tapped into an essential consumer insight, trust.

By delivering authenticity, trustworthiness and a regime that isn’t just for supermodels, but for ‘you’, Lauren Luke has become a phenomenal success.

Using simple down-to-earth tutorials delivering the celebrity look for the everyday women; combined with the reach offered through digital channels, she has built a brand with over 100 million views via YouTube as well as selling her own cosmetic range and books.

eCommerceBoth of these audiences are significant online buyers as evidenced by studies from the US and most digitally advanced countries.

Key Takeouts — Stuck in a Rut

• For pre-motherhood — while they are more likely to be set in their beauty ritual, the opportunity exists for brands to use real reviews and tap into the trust to overcome existing routines. But it needs to go deeper than a friendly trustworthy face, brands need to be able to deliver deep engagement through a community of real people.

• For ‘At Home Mums’ — possibly a more challenging target – there is still the opportunity to recognise that while they are less beauty focused they are still a woman first, and their outlet to the adult world is the internet, particularly social media. Tap into these insights and the opportunity exists to inspire them to treat themselves.

Is this the audience most likely to be open to eCommerce as they know the products they

like and are time challenged?

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© 2010, Forrester Research, Inc. Reproduction Prohibited

Source: Forrester 2010

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60’s40’s to

As she is going through a period of rediscovery, brands need to deliver authenticity. Just consider the success of Dove’s ‘Campaign for Real Beauty’. Similar to the other audiences the importance of real reviews by real people should not be underestimated.1 This allows her to not only see if a product is good, but also if it feels right.

Consumer Reviews — Clinique Facebook PageClinique’s global Facebook page offers everything from eCommerce to a virtual skin consultation, carefully underpinned by the 800,000 plus community who rate and review their beauty products and help deliver brand authenticity.

In the age of ‘defect intolerance’, those aged over 50 are no longer willing to be considered past their use-by date. Just consider the pressure French

women aged 55 plus must feel!

Traditionally perceived as a segment to be less beauty focused and also less digitally literate this is the audience with the least content focused towards their needs. But they are also the most economically powerful groups.1

For many they have been using the same products and beauty rituals. But with more disposable income available, changing skin needs and an overall new look often required, it’s a time when they will consider something new. But in an industry designed for younger women, it can be incredibly intimidating to step back into the beauty department.

AuthenticityDigital’s role is to offer guidance and build confidence for this audience. Allowing them to re-enter the beauty market and enable her to establish new rituals that suit her needs. This is done through tools that allow her to identify solutions which will work to meet her changing needs.

Key Takeouts – Rediscovery

• Offer Guidance– Tipsandtools thatprovidesupport

• Build Confidence– Givethemtheconfidence ofothersexpertise, whetherthatisexpertsor realpeople’sreviews.

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Rediscovery (Late 40’s to early 60’s)

Source: Future Foundation 2010

While the inner self feels young, they look in the mirror and realise

they have to invest a little extra time to make the outer, match it.

1 (50+ year olds own four-fifths of the UK’s wealth Source: Neil Boorman ‘It’s All Their Fault’, April 2010).

1 46 percent indicate that the presence of reviews positively influence purchase intent and they also increase average time on site by up to 30 seconds longer than those without reviews). “Through the Eyes of the Consumer:

2010 Consumer Shopping Habits Survey,” ChannelAdvisor, August 31, 2010.

Men Care

Key Takeouts – Even Men Care

• Providemenwiththeconfidencetoknowwhicharetherightproducts

• TapintoaneverincreasingneedtolookgoodandtheiroverallcomfortwithdigitalchannelsandeCommerce

• Recognisethedifferentmotivationsbetweenmenandwomen.

Content & ConfidenceWith the majority of material online is dominated by professional and amateur bloggers filling a void currently not taken by male grooming brands. Brands have an opportunity to deliver content which sits within the lifestyle to grooming ritual, tapping into a man’s need to look good and a greater focus on the outer body.

In particular, men are often uncomfortable asking what skin products they should be using and when. Providing tools that offer men the confidence and anonimity to know which are the best products for them and even buy them online can be an easy way to tap into this market.

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While male grooming is embryonic in comparison to the female beauty industry in many ways, it’s a segment being tapped into by bloggers,

influencers and to a lesser degree by brands.

Though in comparison to men’s beliefs and needs it feels like a market that is relatively untouched.

The content men are consuming is focused around cool brands and latest trends, influenced heavily by offline magazines (lads mags) which invest in lists of new and what is best.

Men Care tooMale Grooming

Source: nVision 2010

Content — The Grooming LoungeThe growth in smart phones and the utility provided by apps highlights the opportunity for brands to connect with consumers. Apps are becoming like ‘cards in your wallet’. To find a place on your phone they need to deliver some additional value that warrant their place – whether it be exclusivity, simplicity or value – so it is vital brands to find a niche which builds on the key insights around the audience.

Grooming Lounge’s “Send A Tip” app is designed to help out the friend or colleague who needs a little grooming help. The app highlights how Grooming Lounge have tapped into the male psyche around grooming.

Much of the content is delivered using a light-hearted, humorous approach

with a lot focused on making you more attractive to the opposite sex, which is a

very different motivation to women.

Summary

LIFE STAGE EXPERIMENTATION STUCK IN A RUT INSPIRATION MEN CARE TOO

Teenagers to Early Twenties

Late Twenties to Early Forties

Late Forties to Early Sixties

Twenties & Thirties

Role of Digital Aid discovery of self-identity & self-confidence.

Offer Support & Engagement

Provide authenticity and help rediscovery of beauty needs

Deliver Content & Confidence

Key Takeouts

• Make it easy for them to share content

• Allow virtual product interaction

• Social media is a P2P search tool for them.

• Build trust through deeper engagement to overcome existing rituals

• For ‘at home mums’ treats may be the way into reigniting their need for beauty products.

• Tips & Tools that provide guidance in trying new products

• Use experts and reviews by peers to build confidence.

• Understand the different motivations between men and women in their beauty.

Example L’Oréal’s Virtual Mirror By Lauren Luke SuperSavvyMe – Tried & Tested Grooming Lounge

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ConclusionsThe relationship between beauty brands and women is changing, but for many brands they have been slower to embrace digital channels than might be expected.

For some groups, it feels as though they have yet to be fully considered by brands; the 50 plus women and men, in particular. Though this probably mirrors what is happening in the physical world. Simply based on changing demographics and internet penetration (over 50’s) and opportunity for growth (male grooming) it seems they can’t be ignored for much longer.

The key will lie in listening to these audiences, in both the on and offline worlds and identifying profitable niches that brands can play a part in delivering additional and valuable utility.

For now this utility is about harnessing content for your everyday beauty and grooming consumer – reviews, tips and tutorials seem obvious quick wins.

Finally, whether all of the online content will turn into significant growth in digital commerce will depend on whether women turn from the store to the estore.

Sources• Beyond 2020: The Future of Health and Beauty. Future Foundation.• Marketing through the Ages: Do consumer age segments matter – and, if so, how? Future Foundation.• Health, Beauty and Food. nVision Summer 2010.• Talk to Youth The Way They Talk to Each Other. Josh Bernoff et al.• The Innovation Report – November 2010. eConsultancy.• By Lauren Luke. WARC.com 2009• Springwise. Various 2009 to 2011• Trendwatching. Various 2010 to 2011

ThanksThanks to all the Proximity London team, in particular Mark, Kate, Jo, Claire, Nicola, Nyig, Jocelyn & Jeremy (Proximity Asia).

ContactsSimon Bond, Chief Innovation Officer, Proximity Worldwide, simon.bond@proximityworld.com

Mark Iremonger, Head of Planning, Proximity London, iremonger.m@proximitylondon.com

Scott Hendry, Planning Director, Proximity London, hendry.s@proximitylondon.com

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