Nicolas Krafft, formerly of L’Oreal, explains a post-pandemic reality that’s digital and socially aware

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Consumers want to support businesses who believe in similar causes

Consumers want to support businesses who believe in similar causes

There were two major shifts in 2020 in how consumers think about beauty brands, says former L’Oreal Executive Nicolas Krafft. First, with the COVID-19 pandemic came the widespread closure of many brick-and-mortar stores and an increasing push toward online shopping and consumers interacting with brands via online platforms. Second, the widespread social unrest and the Black Lives Matter movement had a profound effect on consumer consciousness and marked a tipping point for how people viewed brands.

Stuck at home in lockdown, glued to devices, and posting to social media, consumers demanded accountability to social causes from beauty brands in a way they never had before. Today, consumers want companies who demonstrate that they care about the causes they hold dear, Krafft says.

Nicolas Krafft noted that these two phenomena, digital first and social accountability, are not isolated trends, but the new way that companies will need to present themselves and interact with consumers moving forward.

Beauty’s digital shift

The rising importance of technology in how beauty brands do business and deliver to consumers was already happening prior to the pandemic. While brick-and-mortar stores will always have their place, says former L’Oreal Executive Nicolas Krafft, beauty brands are increasingly expected to deliver a more holistic experience to customers — one that integrates the brand’s digital identity into the in-store shopping experience.

As Marco Gobbetti, CEO of Burberry Group said in a report by Spencer Stuart, “We don’t think it is about making the in-store experience more technological, but rather it’s about using the store to continue the journey that starts online — and creating experiences and information that is a continuation of the social journey to build strong engagement from customers.”

The tumultuous year that was 2020 accelerated a process of digital transformation for the beauty industry that was already in motion. Those brands that had already invested heavily in their digital presence and experience needed only to ramp up those efforts to adjust to accelerated online buying habits. Brands who relied on stores as the focal point of customer interaction had a much more challenging road, Krafft said.

Increasingly, luxury and beauty brands are gathering and analyzing data on consumer habits — from social media views to online and in-store purchases — and using artificial intelligence to target consumers with the products and deals they want. It means that if someone is walking down the street, looking at an ad for makeup or hair products, she’ll be notified that the product is available at several nearby locations, where she can stop in and purchase. Other brands are using text messages and platforms like WhatsApp to reach consumers with targeted deals and leveraging social media platforms like Instagram and TikTok to both build their brands and appeal to customers following the latest fashion and beauty influencers.

Facebook made the expansion into digital even easier for beauty brands when it launched Facebook Shops in May 2020, providing a means for businesses to list products for sale on their Facebook pages, Instagram profiles, Instagram stories or in ads on either platform. The feature also allows companies to sell products using the chat functions on these platforms, including WhatsApp, as well as to tag product listings during live streams. A company statement said: “We hope these tools can relieve some of the pressure small businesses are facing right now and help businesses of all sizes prepare for the future.”

Collaboration with influencers is a must for luxury and beauty brands in the digital world, with companies partnering with established trend-setters on YouTube and Instagram to grow their brand recognition. A recent report called “The Top 20 Power Players in Luxury Fashion’s Leading Markets” found that influencers represented the most value for top luxury fashion brands in both China and the U.S., driving over one-third of Media Impact Value in China, the only global region that saw growth in its luxury sector in 2020.

ColourPop Cosmetics partnered with fashion influencer Jenn Im who has nearly 2 million Instagram followers, to launch a bright, playfully colored eyeshadow palette called “Jenn Ne Sais Quoi.” There were also lip products named “Jenneration X” and “Dohee,” Jenn’s Korean name. Tarte Cosmetics partnered with Bunny Meyer, otherwise known as “Grav3yard Girl,” a quirky personality with over 8 million subscribers, who posts about fashion and makeup and tests out products. She calls herself “Swamp Queen,” a name Tarte adopted for its makeup palette. A collaboration between Morphe Cosmetics and massively popular YouTube makeup artist James Charles generated $45.8m.

These collaborations with influencers allow brands to build a direct relationship with customers, says Nicolas Krafft, and have access to their customers in a much more personal way. But in order to do so, it must go beyond just social media as these companies need to build authentic relationships with influencers to drive engagement and really make an impact. Followers use the beauty products recommended by their favorite influencers and post their own videos and social content, complete with hashtags, growing brand recognition and loyalty organically.

While luxury and beauty brands took a hit during the pandemic, those that had invested in their digital presence and were poised to adapt by quickly ramping up digital communications campaigns and e-commerce fared much better, said former L’Oreal Executive Nicolas Krafft, pointing to his former company as a leading example. Positioned well due to earlier investment in its digital presence, L’Oreal shifted aggressively to digital during the pandemic, spending 77% of its media investment on digital at the height of the COVID-19 crisis. The company saw a major spike in interactions through its digital platforms like Facebook Messenger and WeChat during the pandemic as well, giving the company access to greater customer data. In place of in-person makeup tutorials, L’Oreal launched its first digital makeup line called Signature Faces — makeup filters that can be applied to selfies to provide a series of unique looks.

Social accountability

While luxury beauty brands almost all experienced a drop in Media Impact Value over the months of March and April 2020, when the pandemic was at its worst in the U.S., Asia, and Europe, there was an even bigger drop in June. That drop came not just as a result of the global health crisis, but to rising awareness and attention to social issues, including racial justice. In light of police brutality and Black Lives Matter protests, consumers began demanding new accountability from companies. It’s a phenomenon, says Krafft, that’s likely only just beginning.

This phenomenon played out on June 2, 2020, known as “Blackout Day,” when beauty brands collectively went silent — replacing typical social media content with a black square or information and resources related to anti-racism in solidarity with the Black Lives Matter movement. According to one marketing report, the overall effect of the blackout was a drop in Media Impact Value from $2.3m to $632k. But Black-owned brands saw their media impact value increase. Fenty Beauty, a brand launched by music icon Rhianna, which is dedicated to inclusivity, had a higher MIV ($368k total) across just three posts on Instagram during the week of June 2 than the previous week.

Beauty brands are increasingly taking bold stances on issues of social importance, says Nicolas Krafft. YSL Beauty launched a global Corporate Social Responsibility program called “Abuse is not Love” in November 2020 to address the issue of intimate partner violence. Domestic violence has been on the rise during the pandemic as people have been prevented from leaving their homes and abusers, and the company wanted to do something to address the cause directly. The program included an educational campaign.

“We are a risk-taking brand, and we saw a topic that was a problem that no one has really discussed and put in the forefront,” said Gino Luci, YSL Beauty’s VP of Marketing. It’s a taboo topic, but it’s not niche.”

Other brands took on similarly bold causes to align themselves closely with their values and their audience. Rare Beauty, a makeup and skincare line from singer and actress Selena Gomez, launched a fund dedicated to mental health issues before the brand became official. Called the Rare Impact Fund, it increases access to mental health services in educational settings. The company donates 1% of all sales to the fund and has a series of resources on its website, including how to recognize the signs of a mental health disorder, what to look for in a mental health professional, and how to be there for someone who is struggling.

In celebration of Pride Month, Morphe launched a 25-shade rainbow-colored eyeshadow palette called the Live for Love Artistry Palette developed in partnership with the Trevor Project, the leading organization providing crisis intervention and suicide prevention services to gay, lesbian, bisexual, transgender, and queer youth. One hundred percent of proceeds from the palettes will benefit the cause. The campaign has a major social media component led by Broadway star and YouTube sensation Todrick Hall.

Nicolas Krafft notes that aligning a makeup brand with a cause is not entirely new. In 1994, makeup giant MAC launched a campaign around its Viva Glam lipstick to support its AIDS charity, the MAC AIDS Fund, donating 100% of profits from the sale of the special line of lipsticks. The initiative has raised over $500 million for the cause in its 25-year history. As part of these efforts, MAC partnered with some of the biggest celebrities on specific shades, including Dita Von Teese (2006), Fergie (2008), and Sia (2018).

What’s different now, says former L’Oreal Executive Nicolas Krafft, is that brands aligning with a cause is increasingly becoming the norm rather than the exception.

Beauty industry professionals now believe that “brand equity” will be one of the biggest drivers of future success, according to a report called “The New Beauty Rules: Stats and Insights Informing the Future of Marketing Strategies.” The report noted that customers are increasingly calling not just for a superficial nod to diversity in honor of Black History or Pride Month, but evidence that companies reflect their commitment to these causes throughout every level of the business.

Rihanna’s Fenty Beauty which reaped the benefits of the June 2 blackout, is a prime example. Every part of the company, from its inclusive models to its authentic social media messaging to its 40 shades of foundation, points to its core mission — “beauty for all.” It was not a case of a company changing to appeal to customers, but rather acting from a clear mission and vision. Rihanna told Time magazine, “I never could have anticipated the emotional connection that women are having with the products and the brand as a whole. Some are finding their shade of foundation for the first time, getting emotional at the counter. That’s something I will never get over.”

In actuality, says former L’Oreal Executive Nicolas Krafft, the rise of influencers as key figures in motivating consumers, the rise of digital accessibility to brands, and growing call for accountability around social causes are part of the same trend — personal beauty. Brands can no longer remain aloof, removed from the issues of the day. They are being called to align themselves with specific missions that reflect their values, and brands perform best when they work with influencers who themselves advocate for specific causes.

Personal care products already speak to customers’ desire for health, wellness, and beauty. During the COVID-19 pandemic, a number of beauty brands launched online tutorials for customers on applying makeup, skincare routines, and even cutting hair at home. Do-it-yourself and self-care beauty products are on the rise in the U.S. as more customers have indulged in home treatments. Paired with the rise in digital sales, says Krafft, this has been another opportunity for companies to shift their focus and relate to customers directly. Professional makeup artist Bobbi Brown, founder of Bobbi Brown Cosmetics, offered a series of Masterclasses during the pandemic on topics like using tinted moisturizer, creating a statement lip, and workplace makeup. And Estee Lauder offered customers a “virtual try-on” experience where they could upload a photo and find their perfect shade of lipstick or gloss without ever leaving their homes.

What we are witnessing, says Krafft, is not just a change in the beauty industry, but a change in how “beauty” itself is defined. No longer is it unattainable, part of the world of models who share a homogenous look. Instead, today’s beauty is inclusive, whimsical, colorful, with room for all genders. Ultimately, says Krafft, the new beauty will drive even more interest in products that reflect a wide spectrum of identities and looks, and that’s a trend that points to a very positive future for the industry.

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