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The economic turmoil that has continued into 2009 has greatly intensified consumers’ anxiety, and the end does not seem near. The most important implication we anticipate is more evidence of how consumers will learn to cope. Consumers will be increasingly prone to relishing simple pleasures—re-evaluating their priorities and revising their purchasing habits accordingly. The economic realities will bear real incentives for consumers to discover novel ways of enjoying what they have, rather than the uncontrolled, conspicuous consumption of the last decade. At the annual National Retail Federation convention, former Wal-Mart CEO Lee Scott warned against expecting a buying spree when the economy starts to recover. He noted that consumers are giving up habits such as eating out and shopping, but there is one difference about this recession compared to the past: consumers are talking about how good they feel about their own pullback in spending.
In our caseload at LPK, we’ve observed that many consumers are also beginning to re-examine their skin care habits, and Gen-Y consumers will continue to drive the anti-consumerism movement, purchasing only what is truly essential or even making their own skin care formulations. Gen-X consumers will spend with caution, perhaps looking for discounts or incentives or innovative offerings like hybrid or multi-use products. A growing number of baby boomers will postpone visits to a cosmetic surgeon in favor of less-expensive fixes such as Botox, Reloxin (a new Botox rival), products such as the NV Perricone Light Renewal Therapy or stronger topical treatments instead. From this adversity will flow opportunity. Well-managed manufacturers of skin care products will have the cash flow to continue their focus on innovation and research.
For some skin care brands, the guiding principle will be the performance/price ratio; i.e., Which products and services in a given offering (premium, mid-tier or value) provide the most capacity for real performance at a reasonable price? How can the performance component be emphasized without drastically raising the cost? According to an Information Resources, Inc. (IRI) report titled, “Shopper in Crisis” (Nov. 6, 2008), 52% of consumers at all income levels said they tried to make personal care products last longer. Will manufacturers create more concentrated skin care products, similar to what’s happened with laundry detergents? Will larger sizes be demanded by consumers in an attempt to cut down on shopping trips and get a better price per ounce?
As consumers look for shopping strategies, what will they seek out? Will they be looking for skin care products with ingredients that are comforting and familiar to them, perhaps those with good-for-you ingredients like vegetables from the produce aisle?
Spinach appeared as an ingredient in two beauty products in 2007. This year it appears in at least 10—including CosMedix Purity Clean Exfoliating Cleanser and MAC Studio Moisture Cream.