Change Is in the Air

All brands must stay relevant to new consumers, an issue which is particularly pertinent in the personal care sector. That’s because beauty and grooming habits, once established, can last a lifetime.

But long-established habits, while great for on-going purchases, also create challenges in attracting the next generation of consumers. No one wants to be seen buying a product that’s mumsy.

Brands that fail to remain relevant to younger consumers lose their funnel of new consumers who will boost sales and act as advocates among their friends and instead become a brand for older consumers. That simple marketing challenge, however, has been made even tougher thanks to technology. Technology is disrupting the power of scale and distribution that used to keep the established brands at the top of the tree, making life much harder for the top tier.


Measuring Value

So while, L’Oréal Paris remains the most valuable personal care brand in the 2016 BrandZ Top 100 Most Valuable Global Brands ranking, with a 1% rise in value to $23.5 billion, it and the other brands in the listing can’t afford to rest on their laurels.

To be fair, L’Oréal has recognized that fact and has successfully made the move to digital, with a quarter of marketing spend now online.

But the challenge goes wider than simply adapting to digital marketing. Personal care brands face business challenges, namely the ability of smaller niche brands to use e-commerce to drive distribution scale, the power of mobile access to give millennials rapid access to new brands, and the shift of traditional female focused brands into the male space.

Although the smaller challenger brands have yet to appear in the Top 15 personal care listing, e-commerce platforms are giving them massive reach, wider distribution and greater appeal than ever before.


Your Better Half?

Half of the personal care sales on Amazon are from smaller brands, and subscription services such as Birchbox and Beauty Box are also using e-commerce as a means to pioneer new forms of personal care.

Mobile purchasing should be area where big brands can lead—tech is complex after all—but the big digital platforms have eroded this advantage providing tools and e-commerce platforms that more nimble, new brands have been quicker to understand and take advantage of.

Nevertheless the big brands can apply their scale in two key ways. First, they have the financial firepower to grow through acquisition, witness Unilever’s recent purchase of Dollar Shave Club. Secondly, big brands can also spot trends in key markets and make them global. Female Korean brands, for example, are becoming important disruptors in the personal care category. Korean brands started “cushion” foundation—a small refillable foundation—which has been copied by L’Oréal and Lancôme.

Male-focused brands also have challenges. Not only do the likes of Gillette have to fight the rise of niche/specialist brands, but also the blurring of traditional gender boundaries giving rise to a new generation of Metrosexual consumers.

This trend has allowed long-established female beauty brands to challenge them on their home turf, establishing male offerings that leverage their decades of female-focused expertise, such as Clinique for Men or L’Oréal Paris Men Expert.

Despite these challenges, large, legacy personal care brands, whether focused on men or women, can hit back at their younger rivals, serving consumer needs better. They can do this by using their resources and scale to be more things to more people.

They can provide greater transparency about the ingredients they use, making them more traceable, accredited even, responding to consumer sensitivity about the chemicals they put on their skin.

Such lessons have been learned by two new entrants to the BrandZ Global Top 100’s Personal Care brand ranking, Shiseido from Japan and Pantene from the Procter & Gamble stable.

The former has built up a brand value of $2.4 billion on the back of a premium strategy. Products such as Maquillage and Elixir Superieur demonstrate how personal care brands needs to be highly differentiated, catering to the specific needs of the widest possible range of consumers.

It has used its scale to create a much more personalized offering, appealing to a wider range of consumers around the world. Such efforts help build its appeal as a “brand for me.”

Pantene, valued at $3.9 billion, has identified a universal truth that sets it apart from the crowd. The “Strong is Beautiful” campaign, designed to help girls and women to build their confidence. Pantene has used its scale to identify a powerful insight and distribute a credible, global message that resonates with consumers.

The truth is that big companies should always have the advantage. There is not a level playing field; long-established brands have scale and reach. The advantage of today’s new entrants is that they inherently ‘get’ the millennial mindset, having been born out of digital.

Ultimately, the brands that thrive will be those that deliver a customer experience that is meaningful and relevant; no matter how large or small they are today.

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Doreen Wang is global head of BrandZ at Kantar Millward Brown. She leads Kantar Millward Brown’s global team responsible for BrandZ research, valuation and marketing. Based in New York, Wang joined the company as an account director in 2008. She was responsible for the launch of the BrandZ Top 100 in China in 2011 and a year later partnered with former P&G CMO Jim Stengel on the Chinese launch of his book Grow, which she translated, authoring the chapter, “Brand Ideal in China.” She holds a BA in economics from Tianjin University and an MPA in operational research from the University of Delaware.