Celebrities Upend The $52 Billion Beauty Industry - koeppeldirect.com

Celebrities Upend The $52 Billion Beauty Industry

Beauty Industry Ulta Bella Terra

Long time beauty industry brands like CoverGirl, Clairol and Revlon are finding it increasingly difficult to expand within their market, thanks to the efforts of celebrities and influencers that are ushering in a new generation of cosmetics for a new generation of adults.

As in all other parts of their lives, Millennials are fracturing into specialty niches when it comes to their loyalty to beauty products. While this is destroying the more traditional brands, it’s giving lots of room for small and independent companies to compete in a market that would have once chewed them up and spit them back out.

Indies Outsell Legacy Brands by a Lot

They’re companies that are often started in the back of a salon or are created by specific social media influencers. These indie cosmetic companies may only offer a few products to begin with, slowly expanding in response to customer demand. Now they’re destroying brands that generations of women have trusted.

In 2017, traditional brand Revlon Inc. disclosed a $133.5 million pretax profit. Not bad, but when compared to upstart Anastasia Beverly Hills, with a pretax profit of $180 million, Revlon has a long way to go. Anastasia Beverly Hills and other small cosmetic companies are seeing massive success like this without even being carried in stores.

Kylie Cosmetics: Function, Form and Fame

Another recipe for success starts with a celebrity influencer and adding some kind of in-demand product. Kylie Jenner, of “Keeping Up WIth the Kardashians” fame, debuted the Kylie Cosmetics brand just two years ago. In 2017, it generated roughly $350 million in total sales. In November of 2018, the cosmetics began sharing shelf space with other high end consumer cosmetics at Ulta Beauty.

The brand, known for nude lip liners and lipsticks is now available in 1,120 Ulta stores nationwide. It’s a strategic move that could pan out well for both Ulta and Kylie Cosmetics. Since Millenials are shying away from traditional cosmetics, there’s no reason for them to be in an Ulta. By placing a favorite brand on the shelves, where different items can be sampled or at least seen in real life, Ulta may be quietly hoping the Millennials will come to support the brand.

How Can Big Beauty Compete?

Several traditional beauty companies like Estee Lauder and L’Oreal have given up.

They can’t beat ‘em, so they’re joinin’ them. Estee Lauder has recently purchased indie cosmetic companies Too Faced and Becca Cosmetics; L’Oreal picked up IT Cosmetics and Urban Decay. Attempting to buy their way into the hearts of Millennials may backfire, since the brands that are acquired could lose the Indie edginess these shoppers love.

Estee Lauder’s attempt to bring its MAC Cosmetics line more in line with the offerings of Indie cosmetic companies might also just be the trick to turn what might be viewed as a superficial ploy into a genuine attempt at better understanding a whole new demographic.

One way or the other, cosmetics companies new and old are going to be fighting over this significant sector. Whether it’ll splinter into niches like so many industries already have remains to be seen.


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