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Radical Transparency Sweeps Beauty Industry

Deciem, Drunk Elephant and Beauty Pie are at the forefront of the movement.

The days of top-secret ingredients and formulations are over.

Instead of beauty brands slapping multi-hundred-dollar price tags on products where the ingredients, for decades, have been shrouded in secrecy — whether under the guise of proprietary blends or just to foster an air of mystery and allure — a new movement is taking shape. A handful of beauty players — from mass to prestige, indie to legacy — are adopting a new modus operandi when it comes to the way they speak to customers — and it’s all about being radically transparent.

The movement is being adopted in myriad ways:

• In terms of product, brands like Drunk Elephant, Beauty Pie, Deciem, Glytone, Brandless, No BS and Garnier are moving beyond the barest listing of ingredients as mandated by authorities and are revealing the exact percentages of active ingredients used — and even where they’re derived from.

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• When it comes to brand messaging, founder of Glossier Emily Weiss has been instrumental in creating a conversation around transparency with Millennial consumers, most notably with Body Hero, a range that launched in September with a campaign that celebrated “real” bodies.

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• Regarding price, Deciem has built a house of brands with approachable, mass price points to show there’s no correlation between quality and cost of goods.

• Then there are marketing materials. CVS last week made headlines after revealing it would no longer “digitally alter or change a person’s shape, size, proportion, skin or eye color or enhance or alter lines, wrinkles or other individual characteristics” in beauty imagery that’s used within its stores, web site, through social media and in other marketing channels for beauty. Helena Foulkes, president of CVS Pharmacy and executive vice president, CVS Health, told WWD she is hopeful that CVS’ move to promote more realistic beauty imagery will trickle down to brand partners, many of which the drug chain is already in discussions with to figure out how to best achieve a broader “standard” of beauty.

“We are a health-care company with beauty inside — and this is a health issue. The American Medical Association has identified the propagation of unrealistic body images as a significant driver of health issues, particularly in young women and girls,” Foulkes said. “We hope to inspire others — inside and outside of the beauty industry — to think about the messages they are sending to women.”

First steps to address transparency in its stores include the inclusion of The Beauty Mark, a watermark that separates “real” images from those that have been manipulated. The watermark will appear on all non-altered images and a disclaimer on all “materially altered” imagery will “ensure that customers know the difference.”

“It [transparency] just seems like an obvious thing — businesses and brands should have always been doing this. It’s this huge movement and all of these bands are changing to be this way — which is amazing — but it’s just strange that it took until the year 2018 for that happen,” said Nicola Kilner, co-chief executive officer of Deciem.

The Canadian-based Deciem, parent company of nine brands (with three more rolling out this year), is among a fast-growing crop of beauty players leading the transparency charge. Niod, Hylamide, Stemm and Esho are some of the labels in Deciem’s portfolio, with The Ordinary being the largest and best known.

In just a year’s time, the company has managed to become one of the most buzzed-about in the industry — and not just because of a minority investment from The Estée Lauder Cos. Inc. seven months ago.

Beyond listing the percentage of ingredients used, the company’s approach to transparency includes detailed information on product pages that contain a table with a material’s pH and whether or not it’s free of gluten, nuts, soy, silicone, oil, alcohol and so on. It also extends to packaging, manufacturing and animal testing, the latter of which is the reason why Deciem will never physically sell in Mainland China (where animal testing is mandatory to enter brick and mortar retailers).

But Deciem’s key differentiator is openness about an accessible price structure. The brand wants to debunk the myth that efficacious skin care needs to cost more and so it prices items according to how much they actually cost to make. For instance, the best-selling product is a Niacinamide 10% + Zinc 1% solution that retails for $5.90.

Likewise, Beauty Pie was created by Marcia Kilgore to “democratize access to luxury beauty products.” The site sells prestige beauty items through a $10 monthly membership that gives users access to buy at factory-direct costs. Kilgore’s goal is for customers to have access to products that would normally cost 10 times as much — the usual industry markup, she said. Because Kilgore is sourcing products directly from manufacturers, she’s able to pass the value on to consumers, who as members pay just $3.57 for a lipstick that would typically retail for $25.

Despite having founded four successful beauty brands with a proven track record, Kilgore had a hard time convincing bankers and the finance crowd that her concept had legs.

She recalled one naysayer in particular who said the only reason beauty is successful is because “it’s about selling a fairy tale.”

To that Kilgore replied: “I would like to sell her a new fairy tale — one where she comes into the factory with me and gets to buy everything directly from the factory. That’s a better fairy tale, that’s radical transparency. It’s saying, ‘Here’s what is, here’s what it’s made of and here’s what it really costs to make.’”

Another element of transparency revolves around being upfront about the cons of a product (in addition to the pros, of course), so for its part, Deciem lays out all the facts to empower consumers to make their own decisions with the information they’ve been given.

For example, when it comes to retinol offerings, The Ordinary’s stance is that retinoids trump retinol because the latter could lead to irritation of the skin. The brand still sells both options to give customers a choice, but verbiage on the retinol product page recommends the use of a retinoid over a retinol.

“In the world of skin care, not every ingredient works for everyone’s skin,” Kilner said. “In the past, brands were doing too much to pretend that a product was perfect for everyone.”

Deciem might be a first mover, but the beauty industry should brace itself: Experts predict that this approach will become the new norm. Not only will the movement influence traditional beauty marketing and advertising — predicated on women achieving aesthetic perfection, the complete opposite of transparency — but communication overall. This is fueled by social media, which for most companies has become the primary vehicle to engage with their consumer, enabling a two-way dialogue between consumer and brand that could never have existed before.

This is great for the beauty firms that are forthcoming about product and formulations, and maybe not so much for those that aren’t. The old guard is being cautioned to adopt a new way of communicating — and fast. To make it in a category as overcrowded and saturated with me-too products, you need to rely on more than trade secrets and a promise of antiaging benefits to win.

“Beauty has been absolutely brilliant at reflecting women’s aspirations; it’s just that those aspirations are changing. New brands pop up to reflect the aspirations of a new generation. They start to become the next wave and old brands either have to catch up or they’ll no longer be relevant. They’ll age out,” said Ruth Bernstein, ceo of Yard NYC, an advertising agency that’s worked with clients in the beauty space including Bobbi Brown and Laura Mercier.

For Bernstein, the idea of a product being the “best kept secret” is dead. A lack of access was once considered aspirational in beauty, where secrecy was something to be coveted. The desire to see impossibly perfect looking A-list actresses and models, some Photoshopped and edited so heavily that campaign imagery was no longer representative of how they truly looked, is being usurped by consumers’ desire for transparency.

But why now?

A dose of reality for one, due largely to the advent of social media, as today’s consumer has come to see that many of the actresses and models aren’t living the aspirational lives depicted in the ads they’ve grown accustomed to seeing. Some traditional advertising has lost credibility in light of the digital age unmasking the truth: the women society once viewed as the most confident (because they were models and actresses) are often the most unhappy.

“The reality was that they [actresses] weren’t feeling confident. And really, all of us women are aspiring to be empowered and confident and feel comfortable and beautiful in our skin,” Bernstein said.

Foulkes even cited a survey conducted by WWD’s sister publication Variety that showed YouTube stars are more popular than traditional celebrities with younger audiences between the ages of 13 and 24. It boiled down to “relatability,” where Foulkes was surprised to learn that Millennials and Gen Z consumers used phrases such as “just like me,” “doesn’t try to be perfect” and “genuine” in their responses.

But this shift in celebrity perception is just one of the many catalysts inciting the transparency revolution.

An ever-informed consumer — who has unbridled access to research tools ranging from the Internet to retailer apps containing detailed product information to the brands themselves — wants to know what she is putting on her face. Combine this with the growing wellness movement, which has made natural and organic ingredients (of the topical ingested variety) top of mind for many individuals seeking synthetic alternatives.

Cultural considerations come into play, too. Some believe this move toward transparency is due in part to a reinvigorated feminist movement and a politically fueled climate where women are encouraged to speak up. With the aggrandization of social media, anyone now has a platform to do so.

“There’s going to be more pressure on brands to even detail what they’re paying people because brands are not only presenting themselves by the products they sell but as cool and progressive places to work. The number of criteria on which they’re assessed on will be much holistic, and more things will be added to the list. They will be forced to be more transparent,” said Lucie Green, a futurist at J. Walter Thompson Worldwide.

Once upon a time, using recycled packaging was seen as a bonus and cause for bragging rights, Green said, but today, the number of elements brands can be scrutinized on has increased exponentially. It’s not even just sharing information about raw materials and ingredients – transparency has extended to how suppliers are treated, how much diversity there is in corporate leadership and employee salaries (and whether that varies by gender). Anything is fair game.

“This is no longer on the fringes. Feminism is a mainstream cultural trend and it means that women are holding brands accountable, and apart from anything else, the [brands’] representation of women,” said Green.

For this group, where politics and feminism are dominant themes, it’s become the norm to turn to social media to “call out” brands for a myriad of things that might not have otherwise come to light,” Green said, noting that these concerns become even more pronounced for the 12- to 19-year-olds in Generation Z.

Drunk Elephant is one prestige brand that has incorporated that attitude into its business strategy. Outspoken founder Tiffany Masterson has a “tell it like it is” stance when it comes to ingredients (she is pro-glycolic acid and vehemently against essential oils, for instance) and backing up her claims with science.

“It’s not hard to come out and be transparent about what we use. The hardest part is saying what we don’t use and why, to say, ‘Look I don’t agree with the use of these six ingredients. I think they are bad for the skin.’ We’ve gotten all sorts of pushback, but I have to be true to my philosophy,” Masterson said.

She’s honest about what her products will and won’t do — Drunk Elephant’s Shaba Complex Eye-Serum won’t get rid of dark circles (“No product gets rid of dark circles,” she proclaimed) but she does hope the serum’s ingredients make the skin under the eyes brighter, firmer and healthier.

Masterson is also honest about mistakes, and instead of “quietly trying to usher in a replacement” or new formula or packaging, she’s upfront with her customers. She said the first iteration of what was called the Beste Cleanser got mixed reviews from customers, where many voiced that it stung their eyes and had leaky packaging. Masterson admitted it “wasn’t the best product” and quickly got to work on developing an improved version.

“We told our consumer, ‘Look, we screwed up. We didn’t love it, you didn’t love it. We fixed it and hope you like the new one,'” Masterson said of the Beste No. 9 Jelly Cleanser, which got its name because it took her nine times to perfect the formula. “It’s the highest form of transparency. I’m telling the consumer it took me nine times to get it right. We’re all humans, we’re going to make mistakes.…You tell them [customers] the truth and guess what? Everyone understands.”

Jamie O’Banion, cofounder and ceo of Beauty Bioscience (also parent company of cult Glopro microneedling device), is another entrepreneur rewriting the product playbook. Before starting her own company in 2011, she spent years working at her family-owned labs in Baton Rouge, La., and Dallas that manufacture and supply many top beauty firms with raw materials and finished formulas.

O’Banion declined to name names, but said it was commonplace for companies to purchase and use just a fraction of the concentration of active ingredients necessary to make the claims emblazoned on product packaging.

“It’s maddening,” she declared. “We would spend all of this time making this new raw material that was incredible. And the world never knew about it because it wasn’t in the product in a high enough concentration to do anything.”

After uncovering this, she coined the term “fairy-dust amounts,” which soon became a popular phrase among staffers in the labs.

“Can they legally claim that the ingredient is in there? Absolutely. But it’s only fairy dust amounts,” O’Banion said, adding: “They [brands] aren’t being dishonest. It actually has that ingredient but it’s almost like a bait and switch. Customers think they are getting these benefits.”

After starting her own skin-care line, she vowed that she would always formulate with the maximum concentration that’s both efficacious and safe. Her mantra is “Truth in Beauty,” which is not only printed on all products but plastered on the wall (via neon signage) of her company’s headquarters.

But ingredients aren’t the only area where brands are becoming transparent. The concept also extends to issues once considered unseemly for the beauty counter. Katie Sturino, founder of Megababe and a plus-size influencer who goes by The 12ish Style on Instagram, wants to eliminate some of the shame that comes with being a woman by starting a conversation around the “things we aren’t supposed to talk about,” such as body odor, thigh chafing or melasma.

To do this, she’s building a beauty company based on tackling taboo women’s issues — and customers are reacting. Sturino launched Thigh Rescue, a deodorant-like, antichafe stick for thighs, in the spring of 2016 and the product sold out while still in preorder. Next she released Bust Dust, a bacteria-fighting powder that eliminates “boob sweat.” For the remainder of the year she has a lineup of additional products, as well as a partnership with a major retailer.

“I got so much feedback from women saying, ‘I wore shorts or a skirt for the first time this summer.’ A lot of times people wear Spanx under their dresses and they said it was amazing and freeing to walk down the street and not have to sweat,” Sturino said, noting that an unexpected market for Thigh Rescue emerged: mothers buying for younger girls who were ashamed to wear skirts or “had to wear biker shorts under things” to manage thigh chafe.

“It’s talking about the things that no one wants to talk about or people haven’t been able to talk about or the media hasn’t acknowledged. The cover of a beauty magazine is like, ‘Hey lose weight and get whiter teeth’ — it’s not ‘We can help you with your boob sweat and your melasma mustache,'” she added.

The beauty industry was established on the inverse of transparency, where women were supposed to “defy science and nature,” but Sturino doesn’t think this unrealistic messaging appeals to the ideals of women today.

Dr. Jennifer E. Miller, Ph.D., assistant professor at New York University School of Medicine and founder and president of Bioethics International, a non-profit organization dedicated to advancing human health through ethics and integrity, drew a parallel to what’s happening in beauty to the evolution of the pharmaceutical industry over the past two decades.

Johnson & Johnson, for example, was among the first in the space to have radical transparency and disclose information about their medications — all the way to patient level data, which was unheard of at the time, she said. As first movers, it wasn’t clear at the time if others would comply, but today, most large companies disclose the safety and efficacy of their medications and vaccines.

“Transparency is part of a larger trend toward integrity. Americans don’t trust big corporations anymore because they think they put profits before people…and so companies have been struggling with how to regain trustworthiness. They’ve been doing all these different things, and the big one is transparency — disclosing the truth about their products, and that’s not just the ingredients but in the marketing and advertising and images and all of that,” she said.

Still, it remains to be seen if banning Photoshop and using “real” people in marketing will ever extend beyond novelty campaigns. The consensus from the advertising community is that marketing lags far behind product formulation when it comes to transparency — simply because it’s a lot more challenging to shift a marketing message that prevailed for decades.

Ad and marketing executives emphasize that inspiration and aspiration are still essential to beauty advertising, but the key today is figuring out to what degree it’s acceptable to augment the way someone looks to create this messaging.

“There needs to be a bit more honesty, but we don’t need to get so raw and real that nothing looks pretty or desirable anymore,” said Kim Vernon, president and ceo of The Vernon Co. and former chief marketing officer of Calvin Klein. “I really love and respect the creative process, and we cannot tear it apart and dilute it by being so adamant about everything looking exactly like it does. I wear makeup because I want to change the way I look when I go out.”

Vernon is clear that she’s not in support of projecting false advertising and imagery, but making everything “really real” might not benefit the buyer either, especially if images are of the skin and face. Sometimes lighting in studios isn’t ideal, she pointed out, where the editing of photos is actually necessary to “bring the color of skin tone back to normal.”

Ad veteran David Lipman agreed that striking a balance between reality and inspiration is the new goal.

“There is still the magic of a beautiful photograph, but a beautiful photograph that’s taken on the camera, not the computer. There’s a big difference, and where that goes and how that’s done is going to be the magic,” Lipman said. “If it’s a skin-care campaign you want to feel the real skin of this person. You don’t want to see fake skin and say, ‘Oh, I can be that.’ It’s too much for the consumer to digest, and we’ve been pounding her with this for many years.”

He recounted a project he worked on about five years ago, where a woman around age 30 was shot for a skin-care campaign for a sizable beauty brand — without hair or makeup stylists on set. The photos were shot over the course of three days, where the woman would emerge from the water at sunrise and again at the end of the day.

“We came back with the images and I could see the discomfort from the brand, the discomfort of not seeing retouched images at a moment in time I thought that women would connect to seeing something they would relate to,” Lipman said.

The campaign never ran.

That doesn’t surprise Thomai Serdari, Ph.D., adjunct professor at New York University’s Leonard N. Stern School of Business and expert in luxury marketing and branding, who noted that consumer psychology is still a key part of beauty buying habits — and this is unlikely to change.

“If I am keen on pursuing transparency and authenticity in all my life expressions, I will probably choose my cosmetics from brands who promise exactly that and will use my additional disposable income to realize a different desire (perhaps a trip),” she said.

But Serdari quickly offered the flipside: “If I believe in social stratification and strive to rise to the top, I will invest in beauty products that empower me to believe I can rise to the top — even if I’m spending most of my discretionary income on these products, which actually may keep me exactly where I am. The dream the beauty industry offers is bigger than the physical benefits the consumer derives from using their products. It is inextricably linked to our psyche and our world view.”

She certainly doesn’t expect newer brands that promise transparency to take over the market, but she’s glad to see an alternative view, especially one that attempts to shift consumer attention to who they are as people rather than just their physical appearance. Instead of labeling it a trend that will “eclipse all other brands in the market,” she views the move toward transparency as another trend that appeals to a specific customer segment.

In other words, brands like La Mer and La Prairie, both of which charge upward of $300 for skin care and have built combined multibillion-dollar businesses by revealing little about their hero ingredients derived through decades-old proprietary methods, can coexist — and thrive — with the radically transparent bunch without cannibalizing the other.

“It challenges other brands that are charging a lot of money for magic potions based on secret ingredients but it would take a radical transformation of society to assume that only transparent brands will sell,” said Serdari. “People’s motives in buying beauty products is deeply rooted in [the] psychological, rather than only physical, insecurities. These insecurities are healed as much by the product sold as by the type of escapism the brand offers.”