Management Sponsored by
Editor’s note: The 2014 graduates of the cosmetics and fragrance marketing and management master's degree program at the Fashion Institute of Technology (FIT) in New York presented their Capstone presentations at “The Changing Face of the Beauty Consumer,” event, sponsored by Unilever U.S., at FIT’s Morris W. and Fannie B. Haft Auditorium on Wednesday, June 4, 2014. This year, students presented on a theme that dives into the challenges shaping the way beauty companies operate from economics to gender to ethnicity.
The following white paper, “Engaging the New Beauty Consumer,” accompanied the presentation from group leader Roshini Greenwald (L'Oréal) and co-leader Jacquelyne Smerklo (Givaudan), as well as Gayathri Balasundar (IFF), Kimberly Lam (Estée Lauder Companies), Deanna Spence (Bath and Body Works) and Brenna Stone (L'Oréal).
By 2050, “other” will be the largest projected ethnic group in the United States. People aged 65 and older will outnumber the young. The number of gay couples with children, which has already doubled in the past decade, will continue to grow, as will the evolution of new family units as gender roles continue to blur. As communities expand geographically, travel retail will double by 2020 and grow 5.4% annually over the next 10 years, outpacing the global GDP. What may have been considered the “others” of yesterday will be the majority of tomorrow. This is the reality of the future, and of consumers, and it is not so far away (Pascale, D., & Wendlandt, A. 2013) This changing consumer will have emerging beauty demands that the industry has not yet seen. The current segmentation model used for targeting beauty consumers does not reflect shoppers’ multi-faceted, multi-ethnic, and diverse backgrounds and lifestyles. This in turn limits customer recruitment and retention opportunities for brands.
By implementing a more dynamic approach to consumer insights, brands and retailers will be able to engage with the evolving beauty consumer in a more relevant and authentic way. The winning companies will be those that create the strongest connection to the consumer and deliver the most relevant content.
This paper will explain the short falls of the current consumer segmentation model and provide a new approach for companies and brands to better understand the growing population of “others.” The term “others” is a way to redefine the new beauty consumer. It identifies the marginalized minorities, those who currently might not be clear on which box to check on the census form. “Others” will define tomorrow’s trendsetting majority.
Despite vast diversity amongst consumers of today and consumers of the future, there exist common threads for consumer understanding that brands can utilize to remain relevant and authentic.
The current consumer segmentation model used for targeting beauty consumers boxes them into the specific demographics of race, age, sex, and geography. These parameters do not reflect psychographics, the attitudes, values, beliefs, and desires of the evolving beauty consumer. The current model is static and linear. It is imperative for brands to engage in a more fluid approach in order to resonate across the consumer’s multi-dimensional value system.
The rising number of “others” in the very near future will have very diverse beauty implications. Demographics alone do not capture a consumer’s cultural values, role in the family unit, and so many other considerations that impact the way they purchase beauty products. Looking at today’s segmentation model, there is no way to deduce these important drivers.
Brands need to evolve from the current boxed segmentation to find out more about the depth and breadth of a person’s true identity. This will provide brands with an opportunity to further explore the layers of a consumer’s individuality. Each of the current segmentation drivers of race, age, sex, and geography are merely starting points for a multifaceted spectrum of interpretations. Clearly, consumers are changing, and yet the beauty industry has not changed the lens through which they view them. By rethinking the current traditional segmentation model, the evolution of the current way consumers self-identify in terms of race, origins, and lifestyle can be understood.
The traditional framework does not capture the multi-faceted nature of consumers. Understanding the deeper associations the consumer has allows engagement in a more relevant and authentic way. “Others” are on the rise.
Race will evolve into a cultural spectrum, where people with diverse backgrounds can share common values. Age will evolve into a cross-generational spectrum of shared passions and interests. Sex will become a spectrum of complex gender identities. Geography will evolve into a series of connections intertwined with notions of community. The existing consumer segmentation model “targets,” while this new dynamic approach “probes” to understand the evolving consumer.
The consumer population of the future will have a majority of “others,” self-identified groups that may look and act nothing like today’s consumers. Brands must take serious consideration of a more holistic consumer view. Detailed in this paper are four spectrums, which describe and illustrate with case studies, brands that are moving in the correct direction, that is, alongside the consumer. This new approach is not about creating four new boxes in which to segment consumers. It is about engaging consumers across the more holistic identity drivers of culture, gender, generation, and community.
In order to stay relevant, it is no longer adequate to simply speak to a person’s race. Race is a classification system used to identify people according to their physical appearances, geographic ancestry, and inherited characteristics. In order to fully engage with consumers, it is essential to consider their cultural values. A person’s culture includes their beliefs, customs, and norms. One race can have multiple cultural values and one culture can span many races. The reality is that a person’s association with race and culture is dynamic. “Others” do not define themselves by color alone.
By 2019, the white American child will be a minority (Mintel 2011). This reality is fast approaching. Recently, National Geographic published an article with visuals depicting the changing faces of America. As races continue to blend, recessive traits such as red hair, freckles, and blue eyes will become more unusual (Wolchover, 2014). By 2050, 47% of the U.S. will have pigmented skin (Aquino, 2012). Appearance and identity are most certainly linked when it comes to racial categories, but there is another important ingredient that must be considered: experience. There is no room for that on those official census forms, but when a person picks up a writing instrument to choose which box they check, experience most certainly guides their hand (Norris, 2013).