Always faster into the future

The future is faster than you think. It's not about whether you need to change, but how quickly you can do it.” — this quote from author Peter Diamandis, one of the 'Top 50 Leaders of the World, 'according to Forbes magazine, describes how sustainable change is taking place at a breathtaking pace and how what was previously thought impossible becomes a new reality. Technology continues to change our world much faster and more extensively than we can even imagine. Many people now have resources at their disposal that were only available to a few people a few decades ago. For example, fast computing capacity has become affordable thanks to ever more powerful computers, access to capital is much easier through crowdfunding, digital processes and high connectivity save time and platforms enable people and companies to communicate concretely and directly about ideas and products with an audience of millions of people in seconds and thus have an influence.

Communicate values and be consistent

What do these revolutionary changes mean for companies? Are they on the right track? Which measures are the most urgent now? What changes are resulting from the new needs of target groups, also as a result of the pandemic? The innovation consultancy... and dos Santos investigated these questions on behalf of a luxury cosmetics manufacturer and came up with exciting insights that could also be of use to other companies in the beauty industry. Here, we focus on three key areas: customer centricity, transparency and data-driven experience.

One thing is clear: Awareness of one's own needs has increased significantly. The more options we have, the more we need to focus on what's really important to us. And the more threats we fear, such as unstoppable climate change or loss of health due to invisible but deadly viruses, the more we need to look inward to find what calms us down and connects us to others. How can companies react to this development? By focusing on their core values, communicating them clearly and investing in a direct connection with their target group. For this, it is worthwhile to reflect on what has already been important in recent years. When we talk to our customers in an advisory capacity, they often say: “We are actually much more sustainable in manufacturing our products than our customers know.” Or else: “We only have skilled workers in our production and no temporary staff, because quality comes first for us.” These are commendable statements. Why aren't such statements being communicated?

Show your posture and take a position

In any case, consumers expect a clear stance — even on socially critical issues, whether climate or inclusion. Values determine living, which also means working for life. Companies that exploit people, animals or the planet are increasingly being publicly punished. One example of this is the fast fashion chain Forever 21, which had to deal with fierce protests from peta activists in 2020. It was about how the company treated sheep to produce the wool sweaters.

But there is another way: Designer Stella McCartney, for example, shows that luxury products can be produced with care and that more and more consumers are enthusiastic about them. Global corporations are also launching multi-billion dollar initiatives to work for the future of our planet. Microsoft, for example, aims to be CO2 negative by 2030 and to revise its previous CO2 emissions since the company was founded by 2050. To this end, the technology company invested one billion US dollars in a climate innovation fund. And Amazon founder Jeff Bezos has invested ten billion US dollars in setting up his Earth Fund to promote developments that can slow down climate change.

Ensuring transparency

Of course, not all companies have the same financial resources as the big players. So what options remain for beauty companies that cannot invest billions? They should reflect on what has already been initiated, be guided by the UN 2030 goals and build initiatives on them. It is important to be as transparent as possible in communication. For example, La Mer provides information on which projects have been supported since 2010 with the Blue Heart Fund, which is committed to protecting maritime habitats. Ambassadeurs such as French environmental activist Philippe Cousteau ensure credibility. And also that the company clearly communicates that animal ingredients such as mussels and crabs cannot be ruled out if the formula contains sea silt extract. A transparent statement is made on this.

This is important because initiatives must be genuine. Young target groups in particular want to know exactly and often research very carefully before making a purchase. When companies practice greenwashing, not only are consumers increasingly punished, but their own employees also feel uncomfortable with it. This may not yet be reflected in current sales figures, but the increasing awareness of climate protection is a fact and is increasingly influencing consumer behavior. Companies can score points not only with regard to the transparent communication of their environmental initiatives.

Clear communication about ingredients is also increasingly important for consumers. Not least because, according to the PMG Press Monitor, health has been the dominant topic among young and old since 2020. Companies should react here, because consumers want less 'ingredient jargon. ' Emerging brands in the USA such as The BeautyCounter, for example, advertise with the 'Never List, 'i.e. ingredients that they do not allow in their cosmetics. Lancôme has met the need for clarity with a series of videos explaining the ingredients in Advanced Génifique Serum, discussing the importance of probiotics, and encouraging consumers not to use products thoughtlessly without knowing what's in them. In order to keep an eye on the raw materials supply chain, technologies such as blockchain can help to guarantee a secure footprint.

Brands that can play with open cards will certainly be preferred in the future. Paulas's Choice is considered a pioneer in terms of transparency when it comes to ingredients and explains in detail which standards apply when choosing. The brand is showing steady growth — a limited-edition peel with alpha hydroxy and beta hydroxy acid sold out in a short period of time and had a waiting list of 11,000 people at Sephora.

Data-Driven Experiences: Retain Target Groups

There are also a few examples of data-driven experiences. Let's stick with Sephora for a minute: Online sales reached an all-time high in 2020 and are about to overtake Amazon's beauty sales in the USA. The Sephora loyalty program with 25 million members is based on a first-class CRM system and is aimed in particular at millennials who are interested in luxury items. The partnership with Zalando is another clever move to become even more successful in Europe and to retain customers in a targeted manner.

A native of Oldenburg is another example of data-driven experiences and shows how quickly niche brands can establish themselves. Influencer Jeremy Fragrance reaches over 4.5 million followers on social media, is titled 'Best Fragrance Influencer of the World, 'and entertains his followers with unvarnished statements about scents, nutrition and motivation. Together with his brother, he runs Fragrance.One and achieves eight-figure sales with six fragrances that are only available online. The trick? Jeremy relies on the 'Power of the Crowd, 'which his scents recommend. The names of the creations also correspond to Google searches. People there are looking for scents for office or first dates, for example. Jeremy promises his customers that the scent will bring them the most compliments on this occasion. While others invest a lot of money in developing concepts and product names, the two brothers simply ask the largest search engine in the world what is in demand.

New Indo-Pacific Gravity Center

Let's come to one last important point: Anyone operating in a global environment as a company has already focused their attention firmly on Asia. Anyone who wants to win over the target group of wealthy millennials there must understand Asian cultures and address them in concrete terms. Almost nine out of ten millennials already live in emerging countries. Chinese millennials alone exceed the total population of the USA. And with their motivations, preferences and decisions, they will permanently change our western society.

“It is no longer the Atlantic that is the world's center of gravity, but the Indo-Pacific,” says former Foreign Minister Sigmar Gabriel. If you want to win in this field, you should ideally bring the appropriate expertise directly into the company, because in Asia, data-driven experiences have already reached a completely different dimension.

Perfect Corp, the world's leading augmented reality company, has integrated its 'YouCam Makeup AR' virtual try-on technology into online shopping experiences with the Alibaba Group. Just six months after launching AR technology, Alibaba announced that it had increased its conversion rate by four times. Innovative technologies improve the product and shopping experience for customers” In the next three years, innovative technology will be the key to increased sales. Especially in the beauty industry, technology will bring about the biggest change for young generations when buying products! ,” says Mike Hu, head of the Chinese B2C platform Tmall Beauty from the Alibaba universe.

Artificial intelligence helps with understanding

Many companies are already experimenting on personalized cosmetics with the help of AI, such as L'Oréal, Olay, Clinique and niche brands such as Proven Skincare. More important than quick profit is finding out about consumer wishes and building a relationship with the customer, which is created here based on data. Because people today rely heavily on data and science to make decisions. It is much easier and cheaper for them to complete a survey than to visit a dermatologist.

Companies must therefore adapt their ways of thinking and transform their analytics sales tool into an analytics design tool. Only then can they understand what consumers expect from their products and appreciate them. McKinsey also recommends: “You should invest in analytics and the performance of consumer data-driven sales now, otherwise the costs are too high. ”

Willingness to constantly change

So what concrete measures do companies have to take in order not to miss out on the connection? As mentioned at the beginning, the future is so fast that only a willingness to constantly change can be the answer — and concentration on the essentials. It is crucial to look at the future now.

Brands must consider: Where do we want to go? What relevance do we as a company want to have in the lives of our consumers ten years from now? And how can we transform into a better future? It is important to answer these important questions specifically and individually.

Links to continue surfing Bloody 'Sheep' Protest Forever 21Microsoft wants to be carbon negative by 2030Jeff Bezos wants to spend $1 billion a year to fight climate changePMG theme races — These topics move GermanyNearly 100% of consumers call for an end to beauty ingredient jargonThe Never List8 Beauty eCommerce Trends That Will Define the Industry In 2021

Literature tip‍

Peter H. Diamandis: The Future Is Faster Than You Think: How Converging Technologies are Transforming Business, Industries, and Our Lives. Simon & Schuster; 1st edition (January 28, 2020).

pic Prostock-studio-stock.adobe.com

publication Branded goods The magazine for brand management, issue 09/2021