Appeared In
Special Issue
Beauty Inc issue 10/13/2017

When it was confirmed that celebrity influencer Kylie Jenner’s “Kylie” cosmetics was on its way to becoming a one-billion-dollar brand (it boasted $420 million in retail sales in only 18 months), it became apparent that the beauty industry is no longer shuffling on a shifting terrain — it’s finding its footing in a brand new landscape.

This story first appeared in the October 13, 2017 issue of WWD. Subscribe Today.

It’s not just the Kardashian sisters who are taking the beauty world by storm. Bloggers, vloggers and influencers have permanently altered the core of beauty marketing, and retailers are having to figure out how to adjust strategies accordingly. While some retailers blundered and others have celebrated success. When what seems like a simple Instagram post can make or break a brand, the shopping preferences of Millennials — one of today’s most relevant shopping demographics — demand attention. And the group’s notoriously high expectations cannot be ignored.

Beauty brands are working to accommodate the group. Bloomingdale’s recently announced a revamp of its contemporary floors to include a targeted Millennial-friendly beauty department. But Bloomingdale’s is far from the only mega-beauty retailer focused on expansion and luring coveted customers. Ulta Beauty is debuting a bricks-and-mortar location in Manhattan, meanwhile Wal-Mart is making its strategy more aggressive for the category. It plans to add 700 new products to its beauty offerings by the end of 2017.

Generation Z is also mixing up the consumer base. Millennials (bringing along their penchant for all things digital) continue to be a key target audience for retailers, but Generation Z has reached shopping age, and understanding this set will become increasingly critical. For reference, WWD recently reported that the estimated spending power of Generation Z is at almost $70 billion in the U.S. — and this number is expected to increase as the demographic grows to make up 40 percent of the population by 2020.

Suggestions from industry executives on how to best accommodate these newcomers have ranged from tips on attempting to capture their attention in five seconds or less to encouraging seamless mobile shopping experiences to providing how-to videos on YouTube. WWD recently collaborated and reported on a survey that found 49 percent of Gen Z students expressed that YouTube videos “totally influence [their] purchase decisions.”

Generation Z’s expectations are going to be high, as is the case with the group’s predecessor. Its members will have their own specific tastes in regard to cosmetic preferences and shopping experiences. But one thing is certain: Technology will be more important — and play a bigger role in retail — than ever before. Fittingly, technological innovations are imperative, and retailers have turned their sights toward learning how to accommodate what has become a brave new digital world.

What the emphasis on technology means for the beauty industry is paramount. Influencers are key to marketing strategies, disrupting traditional marketing models in their wake. Technology in beauty products as well as stores and digital channels will be top priority, too. Case in point: Sephora’s introduction of a new online community platform, promoted communication between users — a feature sure to appeal to Millennials’ preferences for digital portals, unique experiences and authenticity.

Retail has faced notable tumbles of late, but retailers are finding ways to acclimate and blend both digital and physical channels into new, unique omnichannel experiences. With the landscape of retail rapidly evolving, should the beauty industry (and its players) continue to embrace and adapt to new innovations and technologies, it’s almost sure to thrive.

For More WWD Business News, See:

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