The future of brands is about adapting to the changing needs and preferences of consumers.
That’s one of the main takeaways from the Fashion Institute of Technology’s annual capstone presentation by the graduate students in the Cosmetics and Fragrance Marketing and Management program held Tuesday night. Sponsored by Shiseido, three groups of students focused on Millennials, brand expression and retail, to present ways for brands to succeed in the fast paced beauty industry.
To start the evening, the first group presented its quantitative research project focused on Millennials and their relationship with brands. Called “Closing the Consumer Gap,” this group conducted 10 surveys over the course of 12 weeks that went out to 250 to 500 Millennial consumers in order to better understand their shopping preferences.
“We liked the idea of us as Millennials fielding to our fellow Millennials to show that there really isn’t this divide anymore between the brand and the consumer,” said Grace Gordon, marketing manager in designer fragrances at The Estée Lauder Cos. Inc., who co-led the research project. “Our hypothesis was essentially that brands are still relevant [to Millennial consumers], but the relationship has evolved.”
You May Also Like
The first key finding from the surveys was that price, quality and convenience are the top non-negotiable needs of Millennial consumers. For instance, 40 percent of surveyors stated price was their most important requirement when making a purchase and 42 percent base purchases on quality. When it comes to convenience, the group found that physical proximity is no longer what defines the term, rather it constitutes time-saving measures, like fast shipping and easy returns.
The group also found that there is a deep emotional estrangement between brands and Millennial consumers, creating what the group calls a “consumer gap.” Gordon stated that only 19 percent of Millennial consumers believe brands value them over profits and only 8 percent feel that brands listen to them. With these findings, the group looked into what brands can do to repair the gap and connect with the emotional side of Millennial consumers. The group’s solution is to focus on three key attributes: transparency, experience and community.
“This triad of connection between these three elements will enable a brand to create this unbreakable bond with the consumer and build a relationship,” Gordon continued. “We want to urge brands to understand they can’t continue this cold and unemotional [relationship] with their consumers and instead leverage the fact that the consumer is involved [with the brand].”
The second research group looked at brand values, consumer relationships and models for success to determine ways to evolve brand expression. In their findings, the group saw that Millennial consumers have an increasing distrust of larger organizations and brands.
“We found that because of this distrust, [Millennial consumers] are looking for their spending to be a reflection of the trust they’re placing, so that’s why we framed [the presentation] with this idea that buying power is greater than voting power,” said Nicolas Vissat, director of marketing at the L’Oréal-owned hair-care brand Matrix, who led the brand expression presentation.
To mend this consumer distrust, the group presented its “brand humanization theory.” This theory includes three main factors to appeal to Millennial consumers: brand actualization, personalization at scale and promoting an inside-out organization.
Brand actualization refers to brands thoroughly understanding their purpose, which will help it understand its audience and create a community with its consumers. Personalization at scale focuses on creating a one-on-one connection with consumers in order to connect on an individual level rather than mass marketing to a larger consumer base. Finally, by working as an inside-out organization brands can empower their employees to become “internal influencers” to give the brand a level of transparency, which has proven to appeal to Millennial consumers with beauty brands such as Glossier.
Focusing on the future of retail experiences, the final group looked at ways to create and sustain a successful brick-and-mortar business amidst the current wave of retail closings.
Even though 2017 has already seen a number of retail closings with nine retail bankruptcies and more than 3,000 doors shuttered, the group stated that consumer spending isn’t causing the decline of retail, rather it is projected to increase by 3.8 percent this year.
Unsurprisingly, e-commerce and technological advancements have impacted brick-and-mortar sales, but another key influencer is consumers’ inclination for experience over the actual product.
“Time has essentially been sped up because of the advent of technology and as a result consumers have evolved at a very fast rate in terms of their behavior change,” said Pragati Ruia, senior brand manager at Unilever, who led the retail experience presentation. “Retailers haven’t had a chance to catch up and are stuck in the past working in traditional models, which aren’t relevant to the consumer of today.”
Based on Charles Darwin’s theory of evolution, the group proposed ideas to modernize the current retail model. First, they suggested variating retail to be relevant and local by creating more local distribution centers to create faster delivery systems. The group also suggested creating shorter-term retail leases, like pop-up stores, for more relevant, experience-based shops catered to the local consumer.
It was also recommended that the role of sales associate be evolved to brand ambassador. Instead of treating the position as a part-time job, the group suggested that it become an aspirational career, where the right tools and education are provided for employees to excel in the position. This will make them more passionate and educated about the brand, making them internal influencers that can attract more consumers to stores.
To create a more experiential store environment, the group said brands should have a clear point of view in order to find ways to be relevant to their consumers and create shared experiences.
With these three presentations, the students hope brands realize that their current models of operation have become obsolete and that they need to adapt to a more consumer-focused, experiential approach.
The night ended with an awards presentation. Vissat and Ruia received the Class of 2017 Outstanding Scholars awards, Lisa Sequino received the Coty Award for Professional Excellence, Mark Polson received the Estée Lauder Companies Faculty Excellence Award and Crystal Sai received the Limited Brands Student Leadership award and the Department Medal, which is voted on by the program’s faculty.