Are personality-driven beauty brands the next recipe for growth? With 49% of the population spending more time on social media since the COVID-19 outbreak , it has become apparent that online platforms will play an even more pivotal role in brand recognition and reach going forward. According to GlobalData, this is especially true for personal care sectors such as beauty.
Like many industries, the beauty sector is struggling due to changes in lifestyles during the pandemic. Between 2019 and 2020, the US health and beauty market declined by 8.5%, from US$573.2 billion to US$524.7 billion, according to GlobalData COVID-19 adjusted forecasts . That being said, the sector is expected to bounce back in 2021, and reach a forecasted full recovery by 2023.
“Coty purchasing 20% of Kim Kardashian West’s KKW makeup brand is a prime example, as Coty is depending on the strong personality and social-media driven KKW after its other brands are struggling,” says the data and analytics company.
This operation follows Coty’s earlier acquisition of a 51 percent stake in Kylie Jenner’s cosmetics brand. Jenner is Kardashian’s half-sister. The pair have built a beauty empire on the back of the success of the hit reality TV show "Keeping Up with the Kardashians," which first aired in 2007.
“Companies such as Coty know and value the relationship beauty brands must maintain with their audience through social media. Maintaining this engagement with consumers will keep their brands top of mind when the economy bounces back,” adds GlobalData. This is why personality-led brands are key in this industry.
“With something as personal as beauty, consumers want to feel as if they’re being offered something made for them or is recommended by a ‘friend’. This is the appeal of celebrity-led brands as these beauty icons are more than the traditional brand ambassador used by legacy beauty brands - they have built their business empires on their influence, personality and style, as well as through authentic engagement with their audience online,” comments Yamina Tsalamlal, Associate Analyst at GlobalData.
“Of the consumers that thought they were spending more time on social media during COVID-19, 59% of them were in the 16-24 age bracket - a key demographic for influencer-led brands. While social media activity has increased as consumers spend more times indoors, it is the way that this age range has adopted such habits over time that makes them more comfortable with this brand relationship,” she adds.
Another key consideration is that consumers can be mistrustful of large corporations and so are attracted to smaller indie brands that they encounter online and feel with which they can engage.
“These personality-driven brands bring a more human touch and provide the sense that the consumer is having an authentic experience with the brand and the influencer. This allows large corporations such as Coty to benefit from the powerful consumer relationships these brands have built. Ultimately, multinationals and established beauty companies should take influencers and smaller brands seriously - if they don’t capture these passionate consumers, then the competition will,” Tsalamlal continues.
In a similar move, Gap - which posted hundreds of millions in losses in 2020’s first quarter and has flailed in recent years - recently inked a deal with Kim Kardashian’s husband Kanye West to produce a new line marrying its American clothing classics with the rapper’s Yeezy designs. Latching onto the star power of West is considered a major marketing score for Gap, which has seen sales consistently decline since 2013 and has scrambled to remain relevant in a rapidly shifting ready-to-wear landscape.