With the critical holiday season ramping up, beauty brands still have plenty of work to do before they can close the books on 2021. However, the big strategic decisions have already been made, plans have rolled out and marketers are anticipating the next challenges coming down the pipeline.
And oh boy, the challenges! Top of mind for many brands are supply chain woes which are affecting brands in a variety of ways, from manufacturing and shipping delays to trouble sourcing materials and the general domino effect as problems compound. On top of that, the knock-on effects of the Covid-19 pandemic are still being felt throughout the beauty industry. Brands are making big decisions about the future of work, and in the context of the “Great Resignation,” the stakes couldn’t be higher. Hiring difficulties are affecting beauty retail as much as other sectors, and that’s factoring into the way beauty brands are rethinking the interplay between physical and digital retail.
Change is coming fast, and here at Glossy, we are excited by a lot of the shifts and innovations we’re seeing in beauty. To take the pulse of the beauty industry as this relentlessly eventful year draws to a close, the Glossy Beauty and Wellness team convened a gathering of some of the best minds in the business for our 2021 Beauty Summit. We welcomed industry leaders, experts and friends to Rancho Mirage, CA, from November 15-17 to hear how they’re responding to the challenges of the moment, and the trends they’re embracing as we look to 2022. Among the many drivers of change, we singled out three key trends:
- The shape of retail to come
- Consumers — but especially Gen Zers — are more skin care-savvy than ever
- Creative cross-industry collabs help beauty brands reach new audiences
We’ve highlighted some executive interviews that cast light on each of these trends, as well as a few other talking points from the Glossy Beauty Summit that you should know as you get down to putting plans for the year to come in motion.
The shape of retail to come
Like all other retail categories, beauty is undergoing unprecedented change. Brick-and-mortar is back, but the e-commerce genie unleashed by the Covid-19 pandemic will not be put back in the bottle. The future of beauty retail is a blend of online and offline shopping, and brands are working hard to create perfectly seamless shopping experiences using AR, VR, AI and livestream technology.
One of the most interesting developments we’re seeing involves innovative partnerships between beauty brands and big box stores. On one hand, we’re seeing stores like Target and Kohl’s bringing beauty retailers like Ulta Beauty and Sephora respectively in to set up “stores within stores.” These deals represent an immediate upgrade for the mass, big-box beauty aisles, allow the beauty retailers to get their products to new audiences, and give consumers more of what they want to buy when they want it.
Mass retailers are also creating inclusive and diverse product lines in collaboration with beauty brands. We heard from Angel Beasley, merchandising of specialty hair care at Walmart and Lela Coffee, vp of North American hair care at Procter & Gamble Beauty about how the two companies worked together to create Nou, a hydrating hair brand designed to address the porosity of curly and coily hair.
Monica Arnaudo, Chief Merchandising Officer at Ulta Beauty, and Cassandra Jones, vp and gm of beauty at Target, discussed the background to one of the most high-profile beauty retail collaborations in recent memory and gave us an idea of how things are panning out.
Priya Rao, Glossy executive editor: Why did this make so much sense and good business for both parties?
Monica Arnaudo: There’s a lot of disruption in the space, so it was a perfect time for us to come in and do something together. You’ve got first of all the strength of Ulta Beauty, we come in with this incredible expertise concentrated in beauty, we have amazing relationships with our brand partners, and we know prestige. We know the prestige business really, really well, and we have an unparalleled assortment. And we also have very loyal guests. Take that and you couple that with the strength that Target brings, Target being a beloved retailer by so many guests, but also having the strength from a loyalty standpoint. They have amazing omnichannel capabilities and they have a multi-category assortment with a lot of traffic. So the combination of what we bring and what Target brings is just perfectly positioned together.
Rao: Target has been going through this whole transformation in beauty, and you’ve been doing a lot of the work yourself. But what does it mean to bring Ulta Beauty to the assortment, either to elevate, to change, to give gravitas for the customer?
Cassandra Jones: One of the things that we’ve talked a lot about is our guests have been asking for this. And now we know our guests love this … And we said what is the best way to deliver on this ask for this need? How do we create ease in the market? How do we drive differentiation in the market? We’ve really looked and said how do we define something different in that space. Monica and team’s best-in-class experience, both with the prestigious brands and curating this assortment, was the way to bring this in and do something together that allowed our guests to buy products more frequently, have access to the product more frequently, and create ease and joy in their day-to-day shopping trips.
Rao: Were there any surprises? What are the categories and brands that customers are gravitating toward and were they what you thought they would be?
Arnaudo: I would say one of the surprises is that we gained so much traction in hair right out the gate. Hair has been performing so well for us. But we selected a pretty small assortment of hair brands, and they’re performing incredibly well. So brands like Pattern, Ouai and Dry Bar are performing well. And then in terms of the other categories, I would say for the most part as we expected right now: makeup is back and with that re-emergence, we’re seeing a lot of traction in makeup, skin is strong, and the fragrance that we brought in is performing really well. So some of the brands that I think about are brands like Tarte and their Shape Tape concealer. Mascara as a total category is performing well, so Too Faced Better Than Sex mascara. MAC’s Magic Extension mascara, Benefit’s Badgal Bang! mascara.
Consumers – but especially Gen Zers – are more skin care-savvy than ever
Inevitably, one recurring theme of the Beauty Summit was how to engage Gen Z audiences and communicate with young consumers. Many brands have been active on TikTok over the past year, and we heard some inspiring examples of how user-generated content has paid off for brands, as well as how brands are exploring new platforms like Flip and Newness.
June Risser of Galderma talked about the hunger Gen Zers have for educational and instructive beauty content. Risser said Galderma-owned Cetaphil has worked with TikTok influencers and “really tried to bring that education and the science to life, but in a much more educational, informative and fun, accessible way.” Gen Zers are deeply curious not just about how to use beauty products, but what goes into them and how they are manufactured. Nobody in the beauty world addresses this need better than skinfluencer Hyram Yarbro, whose in-depth videos have millions of followers on TikTok hooked.
Star skinfluencer Hyram Yarbro, recently launched his own brand, Selfless By Hyram, in collaboration with The Inkey List. Yarbro and The Inkey List co-founders Mark Curry and Colette Laxton joined us at the summit to share their perspectives on educating skin-care consumers and engaging the Gen Z audience.
Liz Flora, Glossy senior beauty and wellness reporter: You obviously have a very science-focused approach and a lot of new ingredients across both lines. Can you talk about how you educate consumers about skin-care ingredients?
Mark Curry: We think the trigger point is consumers understanding why it is right for them. And so The Inkey List purely exists to spread the beauty of knowledge to anyone, whether you are curious or confused about anything around skin care, anything that you touch. You can see our packs are everything about knowledge: how you say an ingredient, how you explicitly can plug it into your routine. Everything has to impart knowledge to that consumer and however they’re interacting with it.
Flora: Is Gen Z more educated about skin care than earlier generations?
Hyram Yarbro: Gen Z is like sponges for information. I absolutely love it. Because as frustrating as it sometimes can be, because it’s hard to navigate a space where your viewership is so knowledgeable and they’re just always learning, I think it’s an incredible opportunity. It really allows me to not only be able to make sure that I’m learning as much as I possibly can about every single ingredient formulation and everything, but it’s consumers holding brands to a higher standard, which I think is really incredible and really an opportunity for the industry to be pushed in a positive direction.
Flora: Hyram, you’ve obviously had a crazy year with TikTok, but before TikTok, you had quite a large following on YouTube. So tell us about where Gen Z is getting their skin-care information — is it all TikTok, or what platforms are they going on?
Yarbro: I’d say it’s a pretty even split, but depending on what level of information people are looking for. I think the benefits of TikTok are that it’s very short-form content, it’s a lot more rapid, so you can get a lot more digestible information really quickly. I think the majority of Gen Z is on TikTok regardless of what industry, but specifically with skin care. What we’re seeing right now is a lot of dermatologists and estheticians and chemists getting recognition on TikTok, which I think is amazing because it’s really democratizing more specified skin-care information into really easily accessible ways for younger people to be able to understand that information.
I think YouTube as a platform is great for people who are wanting to deep dive into skin-care information more, who are wanting that long-form content and understanding how products work. But I think overall though, I’ve seen a split where Gen Z is. It’s not necessarily that it’s only Gen Z on TikTok and only millennials or older on YouTube. I think it’s more so just catering that specific type of content or the product recommendations in my case, you have to make it custom to the platform that it’s on.
Creative cross-industry collabs help beauty brands reach new audiences
One of the tricky aspects of beauty marketing today is figuring out where your potential audience lives online. Today’s culture is so diverse and fragmented compared even to the world that millennials grew up in. That’s driving beauty brands to venture into new territory, forging creative collaborations in order to tap into communities — gaming, music, anime — that they otherwise may not reach.
Humanrace co-founder and president Rachel Muscat talked about how Pharrell Williams’ brand recently complemented its line of skin care and body care products by collaborating with Adidas to release the Humanrace Sičhona sneaker. ManiMe co-founder and CEO Jooyeon Song said that partnering with celebrities or with IP, as ManiMe did with Hello Kitty, is a way of “reimagining what the product looks like through the product design, through the actual product packaging.” Meanwhile, Urban Decay gm Malena Higuera took us on a fascinating deep dive into engaging with different subcultures and why she’s bullish on the changes that are reshaping the beauty world.
Urban Decay GM Malena Higuera talked about collaborating in spaces the beauty industry has traditionally shied away from, including her brand’s recent partnerships with Marvel Studios and Prince’s estate, as well as forays into gaming via Twitch.
Liz Flora, Glossy senior beauty and wellness reporter: You have so many interesting collabs going on. Do you want to talk about Urban Decay’s approach to collabs and how you choose the ideal collab partner?
Malena Higuera: I think we’ve got to start with really going back to Urban’s origin story. To quote Simon Sinek, people buy why you sell, not what you sell, right? And what I love about Urban is it has stood for difference when nobody was talking about difference. I think the beauty of Urban is now we’re constantly being challenged to ensure that we’re really working with partners that also kind of celebrate difference, that look for difference … You look at Marvel, the casting of Marvel was so purposeful, and honestly truly modern versus a Marvel of years ago, so we really want to take our DNA of difference, and how do we create a one plus one equals three equation with the partners that we bring onboard?
Flora: So is your current collab focus pop culture?
Higuera: I think Urban’s focus is being at the speed of culture. I’m particularly obsessed with understanding what’s happening in subcultures, so actually celebrating smaller communities with bigger scale is quite interesting. So you can think of the Comic Con communities or certainly anyone who’s in the fanatical Prince space, you can definitely relate to that. So I think it’s really about being at that speed of culture and celebrating community and fanatics.
Flora: It’s so interesting to see this take place in the beauty industry, because we’re seeing more and more collabs with fictional characters, cartoon characters, movie characters — are these the new beauty influencers?
Higuera: I think we’re all looking for some fun, aren’t we? We’ve had a rough couple of years, and so I think it’s a time to kind of play out our different personalities. And what I’m really excited about that’s happening in makeup is the makeup category is coming back, but it’s coming back different[ly]. And I like it. I think that’s actually good for us. It gives us a fresh perspective, it changes what was once a beauty norm and how we are interacting and playing with makeup. It’s actually going to be a really exciting time and I’m really looking forward to what’s ahead for our industry.
Also worth knowing
Heritage brands are figuring out how to keep pace with a changing industry. Heather Wallace, President of the Americas at Revlon, talked about the brand’s successful deployment of DTC commerce during the pandemic. Though she said customers are following Revlon back to retail stores as brick-and-mortar has returned, Wallace said brands have to embrace that “convenience” has been redefined by the experiences of the past two years. “Convenience is not just about your local store. It’s not just about getting in and out fast,” she said. “It’s about being able to shop where you want, when you want online and offline and move fluidly through that.”
Many beauty executives are still figuring out where they should come down on the future-of-work conundrum: to return to the office, allow teams to work remotely, or some combination of both? Wallace said Revlon’s future of work policy will be guided by the logic of “moments that matter.” Wallace said the company will not be going back to the office full-time — instead, teams will emphasize in-person meetings only for occasions where face-to-face communication is deemed necessary. “If we’re a company that is all about supporting women and selling products to women, we have to be a company inside that is really supporting that,” Wallace said.
Teams who continue working remotely have to try to build and retain a sense of personal connection and a team ethic that can transcend virtual meetings. Tower 28 founder and CEO Amy Liu told us that Tower 28 held a successful retreat in Palm Springs to make sure new employees had a chance to meet colleagues face-to-face and to give long-time colleagues a chance to get together again.
Of course, the supply chain is one of the big pain points for the beauty industry, and every brand is hurting a little differently. Liu said launching new product lines is tough for smaller brands at the best of times. For many brands, launches are just too risky right now. “We’re a small brand and so we’re trying to grow thoughtfully,” Liu said. “We can’t afford to have a big launch that fails.”
WTF is …
Could live commerce mobile app Flip be the platform to power a social commerce revolution in the U.S.? We heard from a number of beauty brands, like Tower 28, who are already exploring Flip’s potential. Livestreaming has been an e-commerce juggernaut in China, but many American consumers have yet to engage with the format, and far less have made a live commerce purchase. But we’re finally seeing livestreaming gather momentum in the U.S., and all signs suggest it’s simply a matter of time before livestreaming goes truly mainstream.
We came out of the Beauty Summit inspired and excited by what 2022 has in store for the industry. That’s not to downplay the challenges ahead, including those we can’t foresee. The legacy of the pandemic will continue to slow progress, and we hope supply chain problems can be untangled to let commerce flow more freely again next year. But remember where the industry started this year, with stores either shuttered or moribund, and many of us spending most of our time at home wearing sweatpants and no makeup.
We think next year should be epic for beauty. We’ll begin to really see the fruits of some of the seismic changes that have rocked the beauty business over the last two years. Expect more crossovers between beauty retailers and brands, and more product lines addressing the diversity of the beauty consumer more fully. Beauty brands will engage in collaborations that will delight consumers and win new fans. And we are truly on the cusp of a fascinating new era in beauty retail and marketing, from the imminent livestreaming boom to seamless shopping experiences blending AR stores, virtual try-on, masterclasses, access to remote beauty advisors and new approaches to brick-and-mortar. And then there’s the metaverse, which we think you’ll be hearing a lot more about in the year to come. So enjoy the holiday season, and we’ll see you at Glossy’s next events in 2022.