The pandemic and the events that followed shook the beauty market to its core, upending so many of the industry’s conventions and assumptions. Working from home replaced dressing for an office, online supplanted brick-and-mortar entirely, in-app AR try-ons replaced in-store product sampling, and the reckoning that followed the killing of George Floyd energized conversations around diversity and representation in beauty like never before.
Now that we can begin to think beyond Covid-19, what kind of beauty industry are we building? The Glossy Beauty Forum on May 4 checked in with industry leaders, founders and experts to ask what’s on their minds at this inflection point. We heard how Gen Z founders are shaking up the beauty world, explored how beauty is going further with digital, and asked what in-store shopping will look like in the post-Covid market.
Gen-Z founders are transforming beauty
Almost everything that’s happening in beauty right now is a representation of how brands are responding to Gen Z and the values that motivate young consumers, including diversity and sustainability But a growing part of that story is the emergence of beauty brands founded and led by Gen Zers.
TikTok superstar Addison Rae joined us to talk about TikTok and making clean beauty fun with her Item Beauty brand, which she co-founded with Beauty for All (BFA) Industries in August 2020. Rae, who also serves as Item’s Beauty’s chief innovation officer, said TikTok offers a unique window into her generation’s expansive and varied desires and demands.
“It gives everyone a platform and an opportunity to express themselves in ways they never could,” Rae said. “And that gives me, as a founder, and so many other people that are working towards that, a whole new insight on what people want, new ideas, new brand products.”
Rae said her profile (almost 80 million followers on TikTok alone) gives her a unique opportunity to identify and respond to nascent trends. “I’m right here, I’m in the middle of it, and I know what my audience wants,” she said. “We ask them what they want and they tell us.” A changing of the guard is evident, with figureheads like Rae influencing more established celebrities like Khloé Kardasian and Gwyneth Paltrow, and the industry as a whole.
TikTok stars like Rae and the Charlie and Dixie D’Amelio may be outliers, in terms of their audience and reach, but Gen Zers are a generation of founders and entrepreneurs. And they have to be, said Marcelo Camberos, co-founder and CEO of Item Beauty’s parent company, BFA Industries. “There are no lifelong careers anymore,” Camberos said. “You have to be thinking about your career from an entrepreneurial perspective from day one.” Gen Zers have access to all the tools necessary to at least create a brand — and they’re using them.
The ascendance of digital
Brands are fully embracing omni-channel as the pandemic recedes. Brick-and-mortar will have a role, but online isn’t going anywhere. Optimizing the interplay between online and offline spaces will be a priority, and brands need to leverage digital technologies to achieve that goal.
Kecia Steelman, Ulta Beauty chief store operations officer, talked about how tools like QR codes and augmented reality are transforming the consumer experience. In addition to an AR-powered try-on function, Ulta Beauty’s GlamLab app features a skin analysis tool that gives the user personalized recommendations based on the condition of their skin. “Usage of our technology increased by 12 times in 2020,” Steelman said. “We’ve had over 171 million actual try-on applications [through] the GlamLab app.”
Livestreaming is set for a major breakthrough in 2021, with Instagram, Facebook and Amazon Live all now hosting shoppable livestreams. Add Twitch into the mix, and the potential for explosive growth is clear. Sophie Abrahamsson, chief commercial officer at Bambuser, said engagement for livestreams is twice as high as for on-demand video or replays of livestreams. “Live definitely increases engagement, and engagement increases sales,” Abrahamsson said.
Unpredictability and lo-fi authenticity can be virtues in livestreaming. “Live streaming can really add value to connect on a true level with your community and your audience, but also to convey a brand that we know is not fake, that we know is authentic,” Abrahamsson said.
Brands are also using technology to include consumers in the creation process. Volition co-founder and CEO Patricia Santos talked about the brand as a co-creation community crossed with a commerce platform. Volition uses its community platform to give consumers a space for discussion and sharing. Customers can also submit product suggestions to Volition directly. The brand’s proprietary Pyxis system stores those ideas and cross-references them against purchasing data to identify those with the most potential.
In-store shopping is coming back, but for many brands, brick-and-mortar will be a fundamentally different experience in the post-pandemic era. We’re seeing new formats and store layouts, and brands must decide what functions are best served by the in-store experience.
One intriguing development is a series of partnerships between beauty brands and big box stores. Kecia Steelman talked about Ulta Beauty’s new partnership with Target, which will see the beauty brand roll out a store-within-a-store inside select Target locations. “It’s a curated selection of about 1,000 SKUs, and it’s really an introduction to the Ulta Beauty brand,” Steelman said. Sephora and Kohl’s are embarking on a similar initiative, and we can expect similar announcements as beauty brands push to extend their reach.
One way of thinking about omni-channel is to build up the online to support the offline, and vice versa. Melissa Butler, founder and CEO of The Lip Bar, talked about her brand’s recent Walmart launch. Although The Lip Bar’s business remains predominantly DTC , Butler is conscious that big box can factor into a multi-prong approach.
“We know that those are the stores that customers trust,” Butler said. “And people are looking to reduce the amount of stops that they make on the weekend because there are lots of Americans who are still unsure and feeling unsafe, and still have people at home that are still very vulnerable.”
The pandemic encouraged us to center self-care, but that has entailed a redefinition of what “self-care” actually means. “It could be emotional, it could be environmental, it could be mental,” said Sonika Malhotra, co-founder and global brand director of Unilever brand Love Beauty & Planet. Malhotra said she expects interest in at-home pampering products to continue beyond the pandemic, even as customers return to salons and spas. “We do see self-care becoming bigger and a little bit more nuanced, and [an] intelligence space,” she said.
A broadened conception of self-care is seeing consumers decide that what’s good for the planet is good for them. Malhotra spoke about how Love Beauty & Planet has seen the “intention action gap” closing since the onset of the pandemic, as consumers have put their money where their mouths are when it comes to sustainable products.
Glossy 101: What’s an intention action gap?
Love Beauty & Planet’s Sonika Malhotra used this phrase to describe the phenomenon of consumers supporting a virtuous action rhetorically, but failing to follow through in practice. Malhotra said the gap was a familiar issue for Love Beauty & Planet prior to the pandemic. “About 65% of our consumers were always in favor of buying sustainable or sustainability-driven products. But when you actually look at purchase data, roughly 25% of consumers actually go ahead and make that purchase,” she said. “What we noticed is that, ever since the pandemic happened, consumers take a little bit more effort to try and look for something [sustainable].”
“I feel like, in time, it’s becoming a lot more important to people my age and younger to just make this planet a better place.” –Addison Rae, co-founder and chief innovation officer, Item Beauty
Gen Z is often defined by values such as its commitment to sustainability, which translates to a demand for brands to offer quality products while also being transparent, authentic and sustainable in their business practices. Rae talked about making sustainability fun and using Item Beauty to create sustainable products that the consumer feels good about and enjoys.
“My challenge to the larger community is just making sure that we truly have the support intact to make sure that, not only are we launching and driving press for these businesses, but we’re also putting them in a position to actually have sustainable growth.”–Melissa Butler, founder and CEO, The Lip Bar
A year ago, many major beauty brands and retailers made commitments to empower and elevate Black-owned businesses. Melissa Butler said this is a positive trend, but good intentions can go awry. Butler called on the industry to recognize the challenges that young brands face in establishing themselves and to provide the holistic support those brands need to succeed.
Stat to know
Livestreaming could be a $25 billion industry in the United States as early as 2023, according to a forecast by Coresight Research. That’s a massive jump on Coresight’s $6 billion estimate for livestreaming revenues by the end of 2021. However, even that growth would pale in comparison to the livestreaming industry in China, which is already an enormous driver of advertising spending and e-commerce sales, and tipped to top $305 billion in value in 2021.