Makeup and skin-care brands with an outsize share of the social-media conversation, such as Anastasia Beverly Hills, are likely to see their revenues increase, according to the latest research from Tribe Dynamics.
“If you have a greater share of your voice amongst your competitive set, that’s a really strong indication that you’re going to grow next year, and if you don’t, it’s likely that you’re going to decline from a revenue standpoint,” said Conor Begley, cofounder of Tribe Dynamics. The report will be circulated to Tribe’s subscriber base in the coming days.
In order to figure out which brands are likely to experience revenue gains, Tribe groups them into a new iteration of competitive set.
“There are ways to define your competitive sets very objectively,” Begley said. “You can talk about their distribution, so are they Sephora, are they Ulta, are they Macy’s, are they Nordstrom; you can talk about their price point, are they prestige, are they mass; you can do more subjective things, like brand identity or consumer perception. What we wanted to attack was the more subjective field.”
“The way we did it is with influencer-determined competitive sets. What this means essentially is we’re defining brands that have a lot of really common content creators as competitors. The way to think about that is that if you’re a makeup artistry brand…say I’m Anastasia Beverly Hills — I’m going to have a lot of people talking about me that also talk about MAC Cosmetics. Versus Too Faced and Chanel, who have very few people in common,” Begley continued.
Then, Tribe looks into the share of conversation a brand has compared to that brand’s share of revenue for the competitive set to determine which brands will grow versus which may decline. Examples include Anastasia Beverly Hills or Tatcha as potential growers, and MAC and Bare Escentuals as brands that may see a slow down, according to Tribe.
Anastasia’s EMV, or earned media value, gained 71 percent to $159.1 million for the second quarter. The brand had significantly higher EMV for 2014 than expected based on its revenue share, and gained 4.9 percent market share within its competitive group for 2015, according to Tribe’s research.
Tatcha, also expected to grow, gained 404 percent year-over-year in EMV to about $5.3 million for the quarter.
“They’re probably one of the most interesting stories right now,” Begley said. “If you look at what I think is really driving growth for brands in general…great products win more than they used to. That’s an overarching theme that’s really important.”
“They’ve created really great products that people really like,” he continued. “I think that’s what is driving a lot of the growth from Tatcha, as well as the embrace of the influencer community.”
Skin care is still a slower category, social media-wise. “The amount of volume created about skin care is pretty low right now,” Begley said. “I don’t know if that’s related to the low growth in the category, but it certainly can’t be helping.” Tribe did not track competitive set market share growth from skin-care brands that were punching above their EMV weight between 2014 and 2015, but said it expects the growth trend to ring true in that category as well.
Aside from Tatcha, blogger-created brand Farsali grew EMV 1,526 percent; Clinique grew 243 percent; EOS grew 79 percent; Kiehl’s grew 44 percent; Glossier grew 425 percent; Caudalie grew 169 percent, and the Body Shop grew 9 percent, according to Tribe. In skin care, Lush dropped 47 percent and Loving Tan dropped 12 percent.
Makeup, which was the fastest-growing category in prestige with a 13 percent gain for 2015, according to the NPD Group, also saw some shifts in EMV. Aside from Anastasia, growth came from Benefit with 165 percent increase; Tarte with a 182 percent increase; Too Faced with a 130 percent increase; NYX with a 107 percent increase; ColourPop with a 168 percent increase; Huda Beauty with a 684 percent increase, and Morphe with a 171 percent increase. MAC’s EMV declined less than 1 percent.
The report also calls out several specific events for generating lots of social media buzz, including Benefit’s Benefair product reveal party, and Becca Cosmetics’ party for the Becca x Jaclyn Hill Champagne Glow collection.
Begley called out the outliers as brands that should reign in particular attention. Right now, that group includes Violet Voss and Jeffree Star Cosmetics, he said.