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State of the Industry: Eco-values Escalate

By: Briony Davies
Posted: November 14, 2007, from the June 2007 issue of GCI Magazine.

page 5 of 5

Ethical consumerism is a newer trend, borne, in part, from the demand for natural and organic ingredients. As the realities of global warming and the exploitation of developing labor markets gain increasing media attention, consumers have grown sensitive to these concerns and want products that fit their growing eco-values—those with a minimal environmental impact and that give something back to the communities in which they operate. Once a niche position espoused by specialty brands such as Green People, “going green” has now become such a potent selling point that even the world’s largest cosmetics and toiletries multinationals are becoming eco-friendly. Fair trade, a concept already well entrenched in food (chocolate and coffee particularly) and more recently being adopted by the clothing industry, has yet to appear on cosmetics and toiletries labels, but could be a new development to watch out for in 2007.

Consumers Rule Retail in the Youniverse

A new development running contrary to the current celebrity trend puts the spotlight on consumers, making them the stars. It is a way of building loyalty, of making consumers feel as if their favorite products are working for them and listening to them as if they have a stake in the brand. The result is customizable products, such as Prescriptives’ Colorprint service that helps identify the foundation and colors ideal for a consumer’s skin type.

In retail, it has also meant an increase in customer service. Christmas 2006 saw an array of new initiatives designed to make gift shopping faster and less stressful. Macy’s, for example, tried to alleviate long checkout queues with mobile point-of-sale scanners and express checkout carts on wheels. This is also a reaction to a new age of democracy where power is in the hands of all; the Internet is becoming a tool for bringing together the small contributions of people and making them matter. The youniverse gained global recognition in December 2006 when Time Magazine announced its “Person of the Year,” you. Developing and capitalizing on this trend is one way manufacturers can carve out a niche for themselves.

Future Outlook

Euromonitor International forecasts average annual growth of 3% to reach global sales of more than $313 billion by 2011. Skin care and sun care are expected to lead growth, with the importance of the emerging markets of Russia, China, Brazil and India increasing dramatically. As these areas grow, it is likely that local leaders such as Natura, Kalina and Faberlic will become increasingly important on a global scale and that multinationals will work harder to understand ethnic consumers and adapt strategies on a market-by-market basis. Whatever the future holds, innovation will be key to securing success, and manufacturers and retailers alike will have to rapidly adapt to the changing circumstances to exploit potential growth.