Consumers are getting smart to the status quo.
CEW convened for a Beauty Insider series panel discussion Wednesday night at Meredith headquarters in Manhattan. The theme was the “institution-less consumer” — the modern consumer who has lost trust in traditional legacy brands and demands a one-on-one connection and radical transparency from companies.
“There’s a lot of information on the Internet,” said Marcia Kilgore, the serial entrepreneur who most recently founded Beauty Pie, a membership-based direct-to-consumer company that promises beauty products at prices close to the actual cost of manufacturing. “Technology has given this consumer the knowledge of how much some ingredients are and what products actually cost to make, so for how long will she allow herself to pay that much extra for her brand?”
For Kilgore, there were several “a-ha” moments that led to the creation of Beauty Pie. One was a conversation she had with a retailer who told her that “nothing new” ever happened in beauty.
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“Nothing new had happened in beauty in the last several years. It’s the same lipstick or gloss that comes in with maybe different packaging, but there’s really nothing new,” said Kilgore. “We all use the same suppliers, especially in luxury beauty, and we put it in the same package and then there’s this markup for retail.”
E-commerce, Kilgore noted, has eliminated the need for a retail markup.
“Whether or not the retailer is providing that much value for that markup at this point is debatable, because people spend more time interacting on their screens now than they do in a retail environment. I just thought, this isn’t really right anymore to charge someone $100 for something that cost $10.”
Large corporations are feeling the demand for radical transparency.
Said Molly Landman, global brand director of Love Beauty and Planet and ApotheCare Essentials at Unilever: “We had to get more aggressive as an institution and create more brands that we were able to scale what Unilever does so well in terms of manufacturing and efficiency, but pull forward so many innovations in terms of technology and sustainable ingredient partnerships…to really make things that felt like they weren’t from a Unilever, while not hiding the fact that they came from us.”
L’Oréal has made similar efforts — a small entrepreneurial team inside the world’s biggest beauty company launched Seed Phytonutrients last month, a sustainable beauty brand formulated with natural ingredients. The idea was to leverage L’Oréal’s resources and use them to create a start-up-style brand that offered transparency to consumers. The entrepreneurial spirit seems to be rubbing off on other employees. Said Shane Wolff, Seed Phytnutrients founder: “My inbox is filled with people from every brand in the company, asking ‘How did you do this? How did you do that?'”