This document summarizes the results of a survey of over 130 beauty executives about their top concerns. The number one research concern was determining why consumers rejected certain retail channels. Knowing how their brand compares to others and connecting emotionally with consumers were the top branding concerns. The executives ranked new product concepts and a powerful online presence as their biggest strategy concerns. Overall, executives were confident in their brands but recognized the need to adapt to changes in how consumers shop.

1. MARKETING n BY ALISA MARIE BEYER
MATTERS
Where Does It Hurt?
An exclusive study takes a look at the top concerns of today’s leading beauty executives.
W
ith reports that the value of the
beauty market sank in 2009, it’s no
surprise that industry executives are
An in-depth analysis of what went
casting their eyes to the future. Deciding how
to grow a company in a changing economy
wrong and what wasn’t embraced
involves creative thinking, strategic planning
and a little bit of moxie to come out on top
by your consumer is the necessary
when the dust settles. What worked a year
or two ago to get her into your store or using
first-step toward finding the missing
your brand isn’t necessarily going to compel
today’s consumer, as the sad demise of both
link and creating a multichannel
Prescriptives and Max Factor illustrates.
And although consumers continue to spend
platform that will be successful.
a bit more money on personal care items in
general, they have scaled back on spending,
period. Accordingly, beauty brands need to
across the board. What’s the next big idea? this missed opportunity, how to keep what is
adapt and implement strategic campaigns
How can social networking be leveraged currently working for them working and to
that reach across ever broader platforms.
to grow market share? And how can their retain current consumer loyalty. Fi y-four
Like you, e Benchmarking Company
brands gain her loyalty and trust? Beauty percent of executives listed “knowing more
wanted to know how these changes are
executives are always saying they want about how frequently she is purchasing their
a ecting the industry, so it asked more than
to reach “nirvana” with their brand: that brand” as one of their top 10 most important
130 beauty executives—founders, CEOs,
untapped distribution channel or that one research concerns, which directly links to why
presidents, senior vice presidents, marketing
amazing product that would put them closer she may have rejected a certain channel.
directors and managers—to take a survey and
to solving all their business concerns, but An in-depth analysis of what went wrong
share their thoughts on their biggest research,
the survey clearly revealed that regardless and what wasn’t embraced by your consumer
strategy and branding concerns. Every sector
of how it might appear, there is no nirvana. is the necessary rst-step toward nding the
of the industry is represented. Top 20 brands,
Every channel struggles with the same missing link and creating a multichannel
prestige, mass, home shopping, infomercial,
questions, every brand faces the same platform that will be successful.
and small entrepreneurial indie brands all
concerns and the industry as a whole is on
chimed in: Estée Lauder, SkinCeuticals,
the same page about how to meet the future
Johnson & Johnson, April Rain, Chanel, Audit Her Medicine Cabinet
of beauty.
Alchimie Forever, Besame Cosmetics, Mary
Kay, Remede, Fusion Labs, Yes to Carrots, Getting back to basics and looking inside
Guthy-Renker, L’Oréal, Avon, Matrix, ree Just the Facts her medicine cabinet, purse and makeup
Custom Color, Coty, Joico, Molton Brown bag are also important research areas for
and dozens of others provided input on the Knowing why consumers rejected certain executives. Of research services purchased
biggest business and branding concerns in the retail channels was the number one research for their companies, 25% were brand tracking
beauty biz. All responses were anonymous concern for all executives; more than and consumer insight studies, and a full 26%
and con dential. 67% listed it as their primary focus. With of that research was used for new product
So, what did they have to say? e survey such abundant retail channels available to visibility. What is her current routine? What
revealed that no matter what brand the consumers today, it is critical for executives are her attitudes toward beauty products in
executives worked for or what channel and companies to know what didn’t work in general and how do they earn a place in her
they worked in, concerns were consistent order to understand how they can capture daily regimen?
24 Marketing Matters GCI January 2010

2. By leveraging what you know about your
consumer’s beauty routine now against
what you can give her in the future, you
position your brand to ll a void that she By leveraging what you know
may not yet even know exists. It’s no secret
that consumers are trading both up and about your consumer’s beauty
down these days when shopping. Brand
name items are replacing certain expensive routine now against what you can
designer brands in order to allow consumers
to continue to a ord that Chanel compact
or Gucci fragrance. Focusing on what she is
give her in the future, you position
using, and continues to a ord in spite of the
economy, will let you tailor your o ering in a
your brand to fill a void.
way that will both meet her needs, as well as
allow for innovation.
by October 2009—all during a time of ve years? Will she still be trading up and
The ‘It’ Hit recession. Neutrogena didn’t re-invent the down for the same items?
wheel with this product (it is an acne line With 26% of research dollars spent on
With more than 50% of respondents ranking
made with ingredients typically found in focus groups, many executives seem to agree.
new product concepts as their biggest
other acne products); instead, Neutrogena By utilizing complementary business tactics,
strategy concern, it’s clear that merely having
cleverly capitalized on how its consumer such as social networking or alternative retail
good ideas for your brand isn’t enough—
wants to and is shopping, and embraced a channels, and accessing target consumers’
product concepts need to communicate
new “it”—an online only distribution model brains with focus groups and outreach
that unseeable, oh-so-sexy “it” factor and
with a personalized twist. studies, your brand can get a pulse on what
anticipate what consumers are going to
Don’t re-invent the wheel; instead, give consumers want in order to generate concepts
want. But how does this translate in an
consumers the innovation they can’t live that will win her.
economy where tried-and-true brands, once
without.
on the cutting-edge of trendy, are now gone?
Even when brands take steps to nd these It’s Still Who You Know
answers—trend reports are the top research A Wrinkle in Time
service purchased (36%)—answers aren’t It has been estimated that more than three
always forthcoming. As Jeremy Gutsche, Product concepting was another big strategy million messages are tweeted on Twitter
author of Exploiting Chaos: 150 Ways to problem for executives, and more than everyday. Imagine if just a third of those
Spark Innovation During Times of Change, 57% declared “knowing product concepts messages mentioned your brand. A half?
notes, “ e upbeat impact of crisis is that for the next ve years” as a top concern. Factor in Facebook, MySpace, YouTube,
competitors become mediocre, and the In any economy, long-term plans for new MySocial 24x7, FriendFeed, Blogger, Tumblr,
ambitious nd ways to grow.” concepts are obviously important. But in LinkedIn and any one of the dozens of other
To illustrate, Neutrogena only just today’s economy, envisioning what those rapidly evolving social media outlets and it’s
launched the SkinID brand in 2009, concepts might be for a consumer who is clear to see the potential to reach untapped
however; the line had already taken a reinventing how she shops is a tall order. consumers through social networking is
large portion of the online acne business What economies of scale will be in play in enormous. Of companies that purchased
www.GCImagazine.com Marketing Matters 25

3. MARKETING
MATTERS
brand development services, 68% of services
were Web collateral and design combined.
Clearly, social media is here to stay, and
smart brands are eager and ready to explore If you give your consumer what she
this channel.
Where online marketing might have been wants before she’s had a chance
an option two years ago, today it’s a necessity,
and 52% of executives agree that a powerful to look elsewhere for it, you will
online presence is key to building an even
more successful brand. In fact, social media keep your brand fresh in her mind.
plans and online networking are the third
biggest strategy question for executives.
Luckily, it is a question that can be
answered with relative ease and almost
limitless creativity. Tap into (or create) to look elsewhere for it, you will keep your With so many brands available to them,
an online community that targets your brand fresh in her mind, and on her lips. consumers are seeking results as their
demographic, create interactive and engaging ultimate litmus test, and they want to feel an
fan pages, and host customer appreciation emotional attachment to their products. We
campaigns or contests on your company’s How Do I Trust Thee? are nally seeing sales driven click by click. If
home page—and you can reach a vast you build that foundation, they will come.
consumer segment. Not only are consumers Executives are concerned with brand loyalty
becoming accustomed to getting real-time and trust factors, and 23% of executives have
or would purchase consumer awareness
news and information via these channels, it is
research to help map out this process. Who
A Rose by Any Other Name
rapidly becoming their preferred method of
communication. If you give your consumer earns her loyalty? How do you gain (and Knowing what she thinks of your brand in
what she wants before she’s had a chance keep) her trust in your brand? relation to others is the sweet spot all marketers
Figuring out the answer to want to own, yet for 53% of executives, it’s the
this formula is a bit like solving a number one branding problem. More than just
Rubik’s cube: there are many ways testing advertising or teasing out messaging,
WHO PARTICIPATED IN THE to approach the solution, and, discerning intimately how your brand
although it may not seem so, the compares to others in target consumers’ minds
EXECUTIVE SURVEY? solution is quite possible. e most illuminates white space and opportunity. Most
important factors are that your
52% Brand Owners
products connect to her emotionally
marketers agree, it’s not the rst purchase
that counts but rather the lifetime value of
13% Vendors and Consultants while also di erentiating your continued purchases that matter.
brand from competitors seeking to If you had a crystal ball and it could tell
8% Retailers do the same thing: claim her loyalty. you exactly what she was thinking when
4% Beauty Associations For example, does your lip plumper she held your product in her le hand, and
really plump her lips or does it your competitor’s product in her right,
2% Magazines and Publications work just like every other lip gloss wouldn’t you want that information? Today,
on the market? you are closer to bridging this gap than
26 Marketing Matters GCI January 2010

4. TOP BRANDING CONCERNS FOR BEAUTY EXECUTIVES
Knowing how my brand compares to others in her eyes: 53%
Connecting on an emotional level /differentiating my brand: 49%
Finding my brand’s real ownable position: 47%
Telling her my brand story more effectively: 46%
Refreshing my brand/product offering: 34%
TOP RESEARCH CONCERNS FOR BEAUTY EXECUTIVES
Which retail channels were rejected and why: 67%
Brand loyalty and trust factors: 66%
Her perception of my brand: 63%
Her attitudes about beauty: 63%
Her beauty routine and habits: 62%
Sources and publications she uses for beauty knowledge: 61%
ever before. Social media sites allow you rather only certain areas needed attention—
to communicate with your consumers in not the entire brand, which is a good sign.
real-time, and online tra c metrics can give e industry has recognized that a new
you deep insights into how your consumers consumer has emerged, and rather than
are navigating the Internet (including fragmenting, the industry is instead rallying
competitor’s sites), virtually allowing you to behind this new metric synergistically to
read her mind. meet her needs and lay the foundation for
continued future growth.
O en, the industry studies consumer
What’s Next? preference for brands, however, with 85%
of purchases still made at the store level, the
As executives brainstorm next steps in
focus should shi to getting more insights
this economy, some ideas simply didn’t
on the shopper. She is still going to the store
resonate. Traditional outlets for reaching
and mentally comparing your brand o ering
the consumer, such as print collateral
to the one next to it, or the one that she
campaigns took a backseat in magnitude to
currently has in her mind. n GCI
creating robust social marketing platforms
or funding research into the next “big thing.”
Ditto for training expenses and launch
plans, which ranked at the bottom (14% and ALISA MARIE BEYER is the founder
8% respectively) for brand marketing service and creative director of The Benchmarking
needs. Importantly, executives overall still Company (TBC), a global beauty consulting
have con dence in their brands and in firm offering business, strategy, consumer
their brand’s ability to meet all of these intelligence and branding. As publishers of
the “must read” Pink Report and WomenTrends,
new challenges. In fact, more than 54% of TBC keeps its fingers on the pulse of the industry and offers
executives were so con dent in their brands unparalleled consumer insights and intelligence.
they felt a total brand audit was unnecessary, E-mail: alisa@benchmarkingco.com; www.benchmarkingco.com
www.GCImagazine.com Marketing Matters 27