Making it Big in Premium Make-Up: The Opportunities and Pitfalls
No beauty category has been as resilient or consistent growth-wise as premium make-up.
Defying every economic downturn over the past 25 years, The Lipstick Effect has more than lived up to its name and is even used to describe other growth categories.
Annual double-digit growth in the UK premium make-up market is frequently the norm, making it an attractive market for investors, brands and retailers.
On face value penetrating the market could look daunting, given the influence of large established brands. However, the steady stream of new entrants proves this is a market that is worthy of investment.
But success is by no means guaranteed.Here are FIVE key issues that determine success in today's premium make-up market for established and new brands alike.
The Online Opportunity
It may seem madness to launch another new make-up range in an overcrowded and groaning market. But the reason there are so many new entrants is because it’s never been easier to do so.
Obtaining a retail listing is no longer essential. Savvy start-ups are looking online to establish a strong digital following and get listed with one of the myriad retailers.
Retail can come later, but should never be at the expense of online.Brands with a well thought through omnichannel strategy achieve far greater reach and success.
Investment in NPD
Quality counts, especially in premium make-up.
Consumers can be fickle and enjoy a bargain. However, they are also prepared to pay more for new innovation, stunning packaging and formulations that deliver.
This means ditching the twice-yearly seasonal shade statements and establishing a launch programme that is responsive to trends and consumer demand.
The most successful brands are those with an eye on the next trend and who can swiftly translate the trend into desirable products.
Often it's the smaller independents that do this best.
The SKU Conundrum
Traditionally, the way to launch a premium make-up brand was to present hundreds of SKUs to create maximum impact on the counter.
Many established brands still follow this formula, but you have to wonder what percentage of this vast inventory is actually profitable.
Established businesses with a large portfolio of brands/products across several categories can apparently afford to carry some dead weight. Newcomers strapped for cash cannot.
The result is a more measured approach to launch.Many new make-up brands launch with a limited capsule range. It may not work for all, but can be as visually arresting as a brand with multiple SKUs.
The Fluid Digital Landscape
Beauty influencers and bloggers are shaping the beauty landscape and are an essential part of any premium make-up brand’s marketing strategy.
Their outspoken views are often heeded by consumers more than traditional advertising and PR. But they can be hard for brands to influence, even when on the payroll.
A recent example illustrates the dilemma.
L’Oreal signed Munroe Bergdorf, its first transgender model, who was dubbed “the face of modern diversity” when recruited for the company’s #allworthit campaign.
After making racist comments online, L’Oreal fired her.
What's more there are signs the blogger/influencer bubble is about to burst.
There are rumblings that beauty blogger numbers are declining, making it even more important for brands to find alternative ways to engage with digitally-savvy consumers.
Learning Lessons from the Past
Ruby & Millie and Pout were two success stories in premium make-up from the late 1990s/2000s that failed to stand the test of time.
However, Ruby & Millie’s bold approach in making their professional artist brand accessible, glamorous and fun paved the way for Charlotte Tilbury today.
Using her celebrity status, Charlotte Tilbury has gone much further than her predecessors by successfully developing truly integrated marketing that works across all channels.
Meanwhile, Kiko has built on the Pout concept of owning your own distribution by creating a network of freestanding stores. Unlike Pout, which struggled in department stores, Kiko is proving that success can be achieved outside the traditional retail network.
There were others too that dared to break free from the ubiquitous black packaging, targeting a younger consumer who wouldn’t have dreamt of shopping in the staid environment of the department store.
Their success was all the more brilliant because they achieved it without Instagram, Facebook or any of the social media tools we now take for granted.
These pioneers in what has become known as “fast” beauty played a part in the development and future of the premium make-up market through innovative pack design and product concepts, visual impact and speed of new product introductions.
Tomorrow’s blockbusters will do well to learn from these early big hitters.
Do You Run a Make-Up Business?
The new edition of the Premium Market Report launches on Monday 15th January.Entitled How to Make it Big in Make-Up, this brand new report has been designed to give today’s premium make-up brands the tools they need to succeed, whatever stage of their development.
The report looks at the issues covered in today's article in greater detail and a lot more besides. To find out what's in the report, click here.