Appeared In
Special Issue
Beauty Inc issue 12/07/2007

More mergers, fewer acquisitions? New faces, different places? To discover what 2008 holds in store for society at large (and beauty in particular), we asked some forward thinkers to speculate on what lies ahead in their respective fields.

This story first appeared in the December 7, 2007 issue of WWD. Subscribe Today.

Faith Popcorn
Our lives are out of the delicate balance that Chinese philosophy calls yin and yang. Yin embodies what is dark, negative and passive. It is this mind-set that has made our world aware of the catastrophic affects of harsh treatment toward Mother Nature. Yang stands for light, positivity and action. Our world has been in an overwhelming state of yin, but 2008 will continue to usher in an accent of yang. Though not in balance yet, the tiny ray of light in the darkness we are calling “yin(g).” As the trend AtmosFEAR explains, polluted air, contaminated water and tainted food stir up a storm of consumer doubt. This feeling of fear has been propelling consumers toward the trend of S.O.S., where individuals are discovering a sense of responsibility, ethics and compassion for our planet. In 2008, responsibility will equal sophistication. Items that are rare, with a story or a conscience, will become more valuable. Streamlined, efficient design will continue to infiltrate the mainstream. The handmade works of global artisans will be given more value than ever before. Our culture is digging for depth in how we live and what we have. Hence, ying is the new bling; responsibility is what’s “flash,” not mere trappings.

Karim Rashid
The new year will bring the increased casualization of our world. The world around us seems to be getting perpetually softer, more amorphous and more experiential, more tactile, more sensual. Our objects are softer, more human and more engaging. The digital age, the information society, the global village and the leisure culture all are symptoms of a changing shrinking physical world where “soft” defines our new relaxed landscape. Soft is a metaphor for our forever-changing ever-vast organic system. This casualization of shape, form, material and behavior is now a movement that elevates the physical world to be as engaging as the digital world.

Wendy Liebmann, Founder and Chief Shopper, WSL Strategic Retail
I think 2008 will be one tough roller-coaster ride at retail. It’s been a long time since we’ve seen this convergence of diminished economic expectations, dramatic social change and political upheaval all wrapped up in a time of technological transformation. We’ll see the continuing redefinition of retail. It’s what we call the big bang theory—continuing consolidation across all channels resulting in fewer bigger retailers, with lots of smaller, more agile, newer retail players filling the void. Brick-and-mortar stores will finally become just another option. Shoppers will expect their goods and services any way, any where they want: traditional storefronts, online, vending stores, TV, Web sites, all of the above and more. Add to that the fast-evolving value proposition shoppers will demand—way beyond great prices. Constant newness, innovation, a simplified shopping experience and a strong, authentic emotional connection will all be critical to building value and loyalty.

Andrew Weil, Physician
Anger and frustration with the state of health care will lead to demands for reform and, I hope, to more people taking personal responsibility for their own well-being.

Giovanni C Russo, Creative Director, No 11 Inc.
As there is more wealth being created around the globe, the demand for luxury goods will increase. That being said, the exclusive experience from luxury brands is declining. The result of this is we will most likely see a return to handmade, artisan, bespoke and couture. Having tailor-made means one of a kind, so you have no chance of running into your clone at a cocktail party. As far as the ready-to-wear market, you’ll see more and more convergence of sports technology and fashion. I love going to a snowboard or surf shop to search for ideas regarding new high-tech fabrics and design. Furthermore, I see the use of high-tech fabrics in other areas like fragrance packaging. Architects are also beginning to use state-of-the-art fabric materials in building. It’s new and fresh, and definitely not anything we’ve seen before.

Paco Underhill, Founder, Chief Executive Officer and President, Envirosell
The ongoing launch of private label. Retailers are finding ways to source their own products. If you look at the hottest stores across the First World, be it Zara or Mango or Trader Joe’s or even Jo Malone, they’re all about private label products. This allows the manufacturer of products not to make love through the interpreter of the retailer and is another way of engineering cost out of the supply chain. We’re also going to see a better union of the store, its catalogue and the Internet. It will be more integrated, meaning I preshop online, I visit the store and I either close the deal in-store or I go back and order online. The online world is a better informed sales associate. What we’re going to see increasingly as we have Internet-enabled mobile phones and in-store devices that can broadcast to a mobile phone will be that some of the basic needs of packaging are made redundant—just as with Apple’s new iPhone, which came with an Internet address instead of an instruction book. It also makes us an eminently greener culture.

Evan Hansen, Editor in Chief, Wired News
Look for big advances in personalized medicine with companies such as 23andme and deCode Genetics offering detailed DNA roadmaps for under $1,000. This will let you see your genetic predisposition for cancer, heart disease and so on, and will have enormous implications for health and society at large (consider how this information might affect medical insurance premiums). In consumer electronics we’re going to see wireless technology advance to the next level with the rollout of new high-speed networks called 3G. From the military, look for unmanned robotic weapons and nonlethal crowd control technologies using sound, microwaves and nausea to disperse rioters.

Cathy Leonhardt, Managing Director, Peter J. Solomon Co.
Much of the high level of M&A activity in the past three years has been driven by the growth of private equity investors and transaction financing at unprecedented levels. However, with recent credit market turmoil, the housing market crisis and economic uncertainty, M&A activity has declined. But so have valuations, with consumer and retail stocks reflecting these issues. In the coming months, M&A activity will likely be at a slower pace than the past few years. But there are a few countervailing forces: Strategic buyers are now better positioned to do acquisitions vis-à-vis private equity buyers as credit markets are limiting transaction multiples and valuations are lower. Additionally, private equity investors are returning to more value-priced acquisitions. Strategic buyers will still pay higher multiples for premium growth brands such as Burt’s Bees. To drive expansion, consumer products companies will continue to selectively pursue acquisitions to enter new product categories, gain share in geographies and access new distribution channels. With strategics focusing on billion dollar global brands, fewer mega-acquisitions are still possible. However, the consolidation of trade factors and increasing regulatory initiatives are forcing mergers at the midlevel. Thus, M&A activity will continue to play a major role in the beauty industry, but at more modest transaction valuations.