By: Corey Fenton, Assistant Vice President of Consumer Products Development – Hair Métier at L’Oréal; Alexa Krynicki, Lead, Store Planning & Merchandising Strategy at CHANEL; Jamie Lynn O’Brien, Senior Manager of Global Marketing & Product Innovation (Skinceuticals) at L’Oréal; Phyllis Orozco, Senior Product Development Manager at Disposable Hygiene LLC DBA Anthem; and Shir-el Teboul, Manager, Digital at L’Oréal
Our Evolving Landscape
Recent years have unearthed a world of change for today’s consumers, directly influencing attitudes and behaviors in the beauty industry and beyond.
Within the political sphere, political sentiments, and associated policies are more polarized than ever. These polarizing views, in combination with technological advancements and the explosion of partisan news networks, have led to the creation of ultra-curated forms of media – which in turn allows readers to take a “build-your-own-adventure” approach to media consumption, contributing to unparalleled confirmation biases.
Economically, our wealth gap is worsening, driving greater animosity against the ultra-rich. Troublingly, many of the detested icons of monetary success are now spending billions to escape it, either physically through space travel, or virtually via the metaverse. As inflation continues to rise as a result of the pandemic, labor shortages, and the supply chain crisis, consumers are more discerning of discretionary spending.
Societal shifts related to the concept and expectations of the American workplace are occurring in tandem. COVID-19 revolutionized the way many people work, opening their eyes to a realm of remote opportunities. Further, due to poorly received pandemic responses, perceptions of “big business” have faltered in the public eye. These factors are contributors to the Great Resignation – where many employees have exited the traditional corporate structure.
Lastly, there is the climate crisis. Concerns over the climate crisis will continue to influence consumer attitudes for decades to come. During the 2021 United Nations Climate Change Conference in Glasgow, thousands came together to advocate for systemic change, including cooperation from business leaders to protect the Earth. While climate change overall is cause for concern, weak signals are pointing to a focus on water as, according to the World Economic Forum, “water scarcity will be the biggest climate-related threat to corporate assets”.
Capitalism Gone Rogue
Across these political, economic, social, and ecological factors, there is a common thread linking these rising tensions together: consumerism, consumption, and wealth.
From for-profit news algorithms personalizing media in favor of political agendas, to the widening systemic wealth gap, to the mass exodus from corporate life, to the impact of consumption on the climate, there are various signals that capitalism has mutated and gone rogue. With this understanding, FIT’s Beauty Think Tank predicts there will be a fundamental shift in the perception and measurement of wealth to reflect these capitalist tensions. This new definition will extend the definition of wealthy beyond financial abundance, and redefine it with 3 distinct metrics.
Time As Currency
In response to the Great Resignation and shift to remote work, there will be a new meaning of “the luxury of time”. While the concept of the “time value of money” is widely understood, we expect to see a value shift due to the scarcity and non-renewable nature of time. This will lead to an emphasis on time’s monetary value, where it will be perceived as one of the most treasured assets. Looking to the future, three industry territories will be influenced by the increased value of time: needs for innovation, go-to-market strategies, and workplace culture.
Companies must first identify how time’s value will influence their consumers’ product needs to then implement innovation KPIs, such as usage time, time saved, and time for results. They must then deliver pointed innovation strategies to support their consumers’ new habits as they evolve.
Further, organizations must analyze which areas of their go-to-market strategies will be most influenced by a shift in the time-value shift. Then, they must identify what “time investments” of their go-to-market strategies their consumers will continue to value and discontinue those that are obsolete. Lastly, brands will require ultra-streamlined omnichannel strategies to further expedite the shopping experience while retaining brand DNA.
Finally, a cultural revolution must occur in the workplace. Organizations must support employee morale by evangelizing respect for time, creating compensated intrapreneurial opportunities, and integrating time into benefit packages. Companies must also identify emerging gaps in their workforce triggered by entrepreneurial and retirement exits. Finally, FIT’s Beauty Think Tank recommends implementing new structures within your organization to better support talent retention as perceptions of full-time work have shifted, for example experimenting with what ratios of full-time employees to consultants will optimize productivity.
Liquid Gold
According to the World Health Organization and UNICEF, by 2030, billions of people will lack access to safe water for drinking, sanitation and hygiene. Water scarcity is an imminent threat, driven by climate change, population growth, and rapid industrialization. In the future, fossil fuels will have been replaced by affordable, stable alternative energy solutions, but the industry will be faced with restricted water supplies.
Due to the water scarcity crisis, FIT’s Beauty Think Tank foresees water becoming “liquid gold”. This trend will have a wide-reaching impact on the beauty industry, and organizations must plan for both the short and long-term implications.
Soon, bathing rituals will shift in markets impacted by water scarcity for the first time. Here lie opportunities to create localized content and dialogue with these consumers to communicate relevant best practices for reducing water use.
For product innovation, pioneering brands have already reduced their water footprint, but we expect mass adoption of anhydrous and sustainably packed beauty products. Beauty brands must offer water-less and low-water options at scale for improved sustainability and added consumer value. To reduce costs and improve scalability, smaller beauty brands should explore cross-branded partnership opportunities to produce these products in third-party contract manufacturing facilities. Lastly, to evolve internally, manufacturing facilities must re-assess internal operations to decrease water consumption over the decade, exploring new tooling investments, water recycling opportunities, and even water substitutes for equipment cleaning.
Redefined Reality
Much of today’s internet consists of digital platforms that enhance our physical experience. Of the virtual worlds that do exist, the overwhelming majority are siloed, making transitioning avatars, goods, or currency from one virtual world to another a futile effort.
In the future, the metaverse will enhance digital experiences rather than physical ones. There are currently over 90 companies working to develop this virtual ecosystem. In years to come, these virtual worlds will no longer act as independent entities, with a decentralized open architecture allowing consumers to transfer avatars, goods, and currency from one experience to another, dramatically amplifying the importance of the metaverse for all companies as their consumers evolve in this new virtual space.
As reality is redefined in the metaverse, wealth for a “metasumer” will, too, be redefined. Metasumers will reimagine traditional consumption by expanding their collections of NFTs to include art, clothing, media, and even vehicles. They will also purchase real estate and experience retail environments, creating a world in which an individual may care more about the quality and location of their metaverse home than their physical home. Unique virtual experiences in the metaverse, and the ability to access them, will contribute greatly to metasumer’s quality of life and signal “metawealth”.
To address and capitalize on the emerging metaverse, the beauty industry must take action now. Brands must first conduct consumer-market research to identify their metasumer, and lean into pilot scenarios to reach them in this new world. Brands must also build strategies for virtual retail & real estate, digital experiences, partnerships, and advertising. Diversification of metaverse go-to-market strategies will be critical as the evolution of this virtual territory is unknown. Mid-term, brands must identify the role of NFT’s for their business to enhance consumers’ virtual experiences through perks, drive sales of physical products, or simply grow brand equity. Finally, brands must optimize paid and earned strategies for ava-influencers and meta-ads for hyper-personalization.
What’s Next?
Capitalism has gone rogue – and consumers’ behavior will continue to evolve as wealth is redefined.
Today’s shopper is the “connected consumer”. She is connected with her peers, institutions, and employers – with interactions that she can turn on and off as she chooses. Looking to the future, there will be the “immersed consumer”, with a vested interest in the products she consumes, relationships she holds, and the brands she purchases from – which will become integral & woven into her daily life.
As consumers redefine wealth, there will be shifts and amplifications of their values in the beauty and personal care space. Convenience and speed will become more critical in a time-sensitive world. Sustainability will become table stakes rather than added value. Consumers will seek transparent pricing from brands and maximum flexibility from their employers. They’ll strive for an ideal digital image in the virtual world. Lastly, there will be an emergence of hybrid experiences where the physical and virtual worlds collide. With this, the FIT Beauty Think Tank calls on the beauty industry to proactively adapt ways of working in preparation for these emerging trends to ensure organizational consumer-centricity will remain paramount in 2022 and beyond.
ABOUT FIT’s MPS CFMM Program
The FIT Master of Professional Studies (MPS) in Cosmetics and Fragrance Marketing and Management (CFMM) program, one of seven advanced degree programs in FIT’s School of Graduate Studies, was developed in collaboration with industry as a leadership development program for outstanding mid-career executives. Global luxury firms including Chanel, Shiseido, Estée Lauder, and LVMH, and global consumer packaged goods companies including L’Oréal and Unilever, nominate talented emerging executives to participate in the two-year program. The CFMM program has become the beauty industry’s recognized think tank, producing high-level research presented to industry executives and organizations, and during specialized panels, symposia, and forums in both academia and industry. Visit: https://www.fitnyc.edu/academics/academic-divisions/graduate-studies/cfmm/index.php
Categorized in: Trends/Insights