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Direct Response Marketing

Beauty and Personal Care Market: Basking in the Glow

1 Apr, 2017 By: Bridget McCrea Response

Even with a wide array of digital and direct advertising options at their fingertips, beauty and personal care marketers continue to enjoy the positive impact of television’s halo effect.


Asim Akhtar, Ph.D., has taken on one of the biggest challenges that any skincare product company could face: getting young men to think about skincare and the products that can help them get clear skin. And while today’s man is certainly more in touch with his feminine side than, say, his macho, agrarian ancestors may have been, even the guys who do buy the products don’t necessarily ever use them.

“Some people don’t even open the product packaging, which is really bizarre to me,” says Akhtar, chairman and CEO at New York-based Kyoku Holdings LLC, maker of the Kyoku for Men acne treatment system. “They read the sales copy, spend the money, buy the product, and then wait three weeks to even open the box. Then, they call and say, ‘Hey it didn’t work,’ and want their money back. I guess they don’t realize that they have to take it out of the box and actually use it.”

Akhtar says skincare isn’t the only victim of this “let’s hope it works in the box” consumer behavior. “My friends who sell weight-loss products echo these sentiments,” he says. “For example, someone will buy a treadmill or a diet plan, not even use it, and then call up and ask for the money-back guarantee.”

Akhtar says the younger demographic is particularly prone to this kind of behavior. “They kind of buy something that sounds good in the moment,” he points out, “and then they don’t follow up and use it.”

The good news is that both men and women are scooping up their fair share of beauty and personal care products these days — and are being prompted to do so by a mix of performance-based advertising mechanisms. On the male side of the market, the personal care category has grown steadily since 2011 and is expected to reach sales of $4.4 billion in this year, according to research firm Mintel. Skincare accounts for 21 percent of market share (falling in line behind antiperspirant and shaving) and grew 22 percent in the past five years.

Collectively, KPMG expects the global market for personal care products to increase between 3.5 and 4.5 percent during the next few years, reaching a total market value of $500 billion by 2020. Skincare is the major application for personal care products and accounts for a quarter of sales, KPMG reports.

“In South Korea, consumers take up to a dozen steps in their daily skincare routine, while Chinese consumers prefer one-step products supplemented by sheet masks — sometimes twice daily,” writes KPMG analyst Alton Adams. “In Indonesia, scalp freshener products are popular with Islamic women wearing the jilbab. In the U.S., men’s grooming is one of the fastest-growing market segments in personal care.”

That last statement is music to Akhtar’s ears. Focusing 100-percent on D2C sales — with a small degree of wholesalers involved — Akhtar says he tried to go the “retail route” early in Kyoku’s existence but quickly realized that his target demographic wasn’t buying skincare products in places like Macy’s. “With everyone buying from e-tailers like Amazon, the easiest way to get to our consumers was by speaking directly to them,” he explains.

“We found that the most profitable way to do that while also controlling our own message — and without a big budget — was to use direct response online,” says Akhtar, who is pleased thus far with the results of that early decision. “We’re perfecting our message every single day and working hard to get more of our messaging, information, and products in front of our target demographic.”

In September 2016, for example, the company scaled up its online campaign aggressively and started offering a trial continuity program that it had been testing for about six months. The company has used TV in the past, but — for now — plans to stick with a blend of online and mobile advertising strategies. “We’re pouring more and more into advertising and growing our presence in a very large market,” says Akhtar. “At this point, we’ve barely scratched the surface.”

Making New Inroads

It’s been just about 30 years since Guthy- Renker first dipped its toe into the beauty and skincare market, and it has since introduced the world to venerable brands like Proactiv, Principal Secret, Perricone MD, WEN Haircare, and Meaningful Beauty. The company’s chief marketing officer, Ken Mahony, says Guthy-Renker continues to lean on a blend of traditional direct response plus mobile and social to get the word out about its products.

Facebook has been a particularly good mechanism, Mahony notes, due to the fact that so many consumers are now engaging with and interacting on the social media platform. With Facebook, for example, Guthy-Renker is able to track individual users — versus just browser sessions. Facebook can also tie multiple devices together and give the marketer a more complete picture of the customer (versus stats related to a single browser session). “If we catch you looking at something, Facebook can help us serve up ads that are more targeted to what you’re searching for,” says Mahony.

“Obviously, it’s nothing compared to the extent of our television advertising, but we’re making some inroads with Facebook, which is exciting for us,” Mahony continues. He’s also enthused by the ongoing positive results produced through mobile, a channel that Guthy-Renker has been using since 2009.

“Whatever brand we’re launching and regardless of age demographics, mobile is always an important component,” Mahony says. For example, he adds that while the firm’s makeup and skincare lines tend to target different demographics, “both have very significant mobile interaction.”

Looking back on the nearly three decades that Guthy-Renker has been paving new ground in the beauty and personal care market, Mahony says the company remains tightly focused on its “well-defined problem-solution approach” to the market.

“We use a strong and interesting product story and highly demonstrable before-and-afters,” says Mahony. “If you look at the recent success we had with IT Cosmetics, those elements were all very much front-and-center.”

The ‘Halo Effect’

Television advertising is good for all kinds of stuff, but if there’s one thing it was literally built for, that’s creating a “halo effect” around most other advertising and sales channels.

“Last year was our first real foray into the long-form DRTV world with our Keranique brand, and it’s going gangbusters,” says Andrew Surwilo, CEO and co-founder of Atlantic Coast Brands of Jersey City, N.J. “The best part is that DRTV has a tremendous halo effect in terms of creating sales in retail and online, and really helping our other media channels work.”

A big user of direct-to-consumer advertising, Atlantic Coast Brands sells products like Christie Brinkley Authentic Skincare and Hydroxatone, among others. In surveying the current selling landscape, Surwilo says that while DR historically was a “kind of strange concept for mainstream advertisers and brands,” that’s no longer the case

“Those typical single-channel or two-channel brands are now struggling to understand the power of DR and the analytical nature of what we do,” says Surwilo, who says he has been approached personally by several well-known, major national brands that have not typically engaged in direct response. “They’re asking us for advice and guidance in what we do with direct response TV, online, print, and direct mail.”

Surwilo credits the consumer revolution and democratization of retail with driving some of this new interest in direct channels on the part of traditional advertisers. “We’re in a world where consumers are less concerned about the name of the retailer that they’re buying from,” he explains, “and more about the comfort and convenience levels associated with the way they buy.”

Circling back to DR’s halo effect, Surwilo says that advantage is playing out well in the beauty and personal care market right now. “Direct response marketers always pride ourselves on knowing the ROI associated with spending one dollar within a specific channel,” he points out. “It’s all about attribution, and today it’s even more important than ever to be able to attribute sales to exactly where the marketing dollar is spent.”

Recognizing that most companies are using multichannel approaches in today’s market, Surwilo says standing out from the pack has gotten a little harder during the past few years. Concurrently, he says following the rules and staying compliant isn’t getting any easier for beauty and personal care marketers.

“Regulatory guidance and clarity are major challenges,” he says. “And while that’s not unusual for our industry, anytime something new takes hold, it takes regulators time to figure out how to guide an industry. We’re seeing that now, and we’ve been adjusting our marketing messages and techniques while relying on our lawyers and the latest rulings on cases for guidance.”

During the next 12 months, Surwilo expects the regulatory climate to normalize somewhat and pave a clearer path for beauty and personal care marketers. “This is one thing that anyone in the beauty industry continually struggles with,” says Surwilo. “We should see much clearer guidance from regulators, whether that’s for advertising or product lines — or both.”

A Shift to Digital

ICTV Brands Inc. in Philadelphia cut its teeth on DRTV with DermaWand a few years ago, but has since shifted its focus to more digital advertising. “People are staying connected with many different types of devices, using social media and online reviews to get tips and find out about new products,” says Nikki Kearney, vice president of marketing. “To accommodate this shift, we’ve really embraced the omnichannel approach with a strong focus on digital.”

But even with that multifaceted mindset, companies like ICTV are facing new and significant challenges in the marketplaces where they’ve operated for years. Right now, for example, Kearney says one of the toughest obstacles is the sheer number of options available to today’s consumers in the beauty and personal care space. So where one specific brand or line of products may have dominated a certain consumers’ vanity cabinet just 10 years ago, the variety in that cabinet is now much broader.

“The variety is a real plus for consumers, who have a lot of options to choose from and various sources of reviews and feedback to refer to,” says Kearney. “From the marketer’s perspective, it allows us to innovate, grow, and build different lines — but it also bombards consumers with a lot of options.”

As a result, attempting to create a unique selling proposition is more difficult than ever. “Digital definitely helps us do that,” says Kearney, “by allowing us to quickly and cost efficiently adjust our creative and target specific audiences with different messaging.”

Harnessing the ‘Power Shift’

Looking ahead, Surwilo expects the power shift to the consumer to continue — a trend that will enable brands to be even more creative and flexible while being less beholden to the marketing and advertising channels themselves. “This is akin to the continuing democratization of retail and brand marketing,” says Surwilo, “and it’s going to continue.”

At Guthy-Renker, Mahony says the company will continue to spread its efforts across numerous brands in order to avoid cannibalizing any one of those brands. He sees body care and devices as being particularly strong candidates for 2017, and says that even the crowded anti-aging market could present opportunity for an innovative marketer.

Ultimately, he says the age-old belief that “product is king” continues to reign in the beauty and personal care sector, where consumers are looking for products that help them look and feel better.

“We’re always looking for that new ‘white space’ that allows us to tell and retell our story,” says Mahony. “But, in the end, success in this market is really about quality products that work.” ■

 


About the Author: Bridget McCrea

Bridget McCrea

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