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Marketing Matters: Shift Toward Simplicity Impacts Skin Care
By: Liz Grubow and Valerie Jacobs
Posted: April 7, 2009
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Skin care is taking a beating around the globe due to the financial crisis. Europeans are scrutinizing prices more closely, reining in their spending. In the U.K., for example, decreased skin care sales in back-to-back months has been the trend. The British are stating that they are taking this opportunity to look back on the austere postwar years with pride.
In addition, foot traffic in European and U.S. department stores is decreasing dramatically, and retailers are reassessing their product offerings—while customers are thinking harder about what products provide the best value. Asia is fairing the best, enjoying surging growth in recent years—after its own financial crisis—that has expanded the ranks of middle-class consumers. Asian consumers are being cautious and tightening the purse strings on luxuries, but have generally done a better job of budgeting and have less credit card debt than the West. In South Korea, estimates indicate that as many as 30% of women aged 20 to 50 had surgical or non-surgical cosmetic procedures in 2008, but these procedures are currently experiencing a decline. Although research indicates that Asians save anywhere from 40–70% of their salaries, job losses, forced retirement and pay freezes/reductions are affecting these consumers as well. In an attempt to decrease the impact on the economy, some Asian countries have provided economic stimulus vouchers to their neediest citizens.
For retailers, private label consumer packaged goods continue to be a strategy to gain market share, and private label brands continue to evolve in their sophistication and availability. Private label options do provide good quality at a good value; however, trusted brands provide certainty in terms of expected product quality through time-tested research and technology.
Skin care brands that will experience sustainable growth will be those that bond and form allegiances with consumers that are more than skin deep—the value proposition must be real, authentic and honest. With continuing revelations of corporate and political greed and misdeeds, cynical consumers are demanding consistency, accountability and authenticity. This will be a difficult barrier to overcome since some manufacturers will still have to create breakthrough products with some degree of restricted resources—a reduced workforce, frozen or slashed advertising budgets, or other outcomes of the economic crisis. The strong will survive—the brands that have longevity are backed by companies with flawless reputations for how they are managed financially, how they treat their employees and their level of responsibility as genuine corporate citizens. Skin care brands will need to work overtime to prove they are authentic; a fleeting change in tactics or simply dusting off the last recession playbook is not going to suffice. There must be a profound, strategic shift that builds closer, stronger relationships with consumers that will survive long after the recession subsides.
Liz Grubow is vice president and group creative director of the LPK Beauty Group. In her 20-plus year career, Grubow has helped develop and manage brand identity programs for some of the world’s most successful beauty brands—including Pantene, Olay, MAX Factor International and Cover Girl.