Becoming a 10x brand will be crucial for those competing in the beauty industry, according to Terry Young, chief executive officer and founder of Sparks & Honey.
From his vantage point at Sparks & Honey, a cultural consultancy that helps companies understand the implications of a changing market, Young suggested businesses need to rethink strategies for dealing with rapidly changing industry developments. “Thinking about change as only incremental isn’t going to work in a world that is moving at the pace of change we are seeing in this environment. It requires us to think exponentially and exponential change is driven by technology.”
At first, thinking exponentially can seem like a disappointment, Young said. “But then it turns to amazement. It is the Netflix, the Amazon and the Instagram effect. Those are the results of exponential thinking.”
He zeroed in on three aspects impacting the industry: artificial intelligence, personalization and the fragmentation of the beauty business. AI, he said, will impact everything from automation to white-collar industry jobs. “AI will not replace humans, but humans working with AI will. Everyone’s jobs will be altered,” he said. One of the biggest challenges will be discovering how to accept automation and do things “faster, better and quicker.”
You May Also Like
Young said there have been 932 patents involving AI filed with 60 percent of them from the technology titans including Facebook, Google, Amazon and Alibaba. When clustered they fall into four categories: face recognition, language analysis, creativity and emotional recognition. “What I find intriguing about this is that it is pretty much what we do in marketing and branding. We build art and images, we write copy, we have concepts and we understand emotion at the human level to understand why they buy. So, the automation is coming fast and furious. The AI is being built around you and don’t need to be seen as a threat.” He called new technologies “superpowers” that will enable beauty teams to establish leadership. The challenge, he added, is to retrain employees to embrace technology to turn it into a competitive edge.
Young advised beauty companies to dive into personalization. A deep understanding of biology is the next step in creating customized products. That can also cascade into creating personalized shopping experiences.
The third challenge Young addressed is the rise of the indie brands, an issue that is especially critical in the beauty industry but reaches into all businesses. The top brands in the consumer packaging industry are seeing slow growth or no growth. But where there are sales inclines are the smaller brands that result in a splintered market. This results in a challenge for beauty powers to establish marketing game plans when competing against hundreds of brands that “come and go at a fast pace.”
The situation is compounded by the emergence of social platforms, which have built a more complex marketplace. It won’t be easy for big brands to compete, but it can be done, Young said. Brands need a roadmap to hammer out how to be successful when pitted against upstart beauty brands. It requires a different model, Young suggested. “There is opportunity to look at a model to build big super brands in a competitive and fragmented market. It just requires internal and external changes.”