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| Issue 41 |  |
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| Category | Title | Author | ||
| Market Report | Diversification in the skin care market | Helga Hertsig-Lavocah |
The major marketing characteristic of the skin care market in the 21st century is diversification and specification. By this we mean that products are diversifying, instead of just one cream or lotion, consumers need an arsenal of products each targeting a specific problem/area of the body and face e.g. underarms (Biodermal), buttocks (Collistar and Somatoline) or the skin between the upper lip and nose (Bliss).
This article discusses the origin of this development and the impact it has on the market.
Why diversification?
Diversification is part of the natural evolution of every market. The hair care market splintered with the arrival of shampoos and conditioners for blondes, brunettes and red heads. The laundry detergent market has fragmented into products for white, black, pastel or bright coloured textiles. In Italy the Carapelli range of olive oils includes one specifically for babies.
Diversification and specification bring new impulses to mature markets. In the case of shampoo, manufacturers cannot attract new users to the product; everyone uses shampoo; so therefore they target their product to a specific need e.g. the specific needs of brunettes as opposed to those of red heads. These strategies are relevant for mature markets where there are many competitors with little or no innovation to differentiate themselves, where products have lost their novelty or added value and become commodities, and where consumers are over whelmed with choice leaving them unable to make an informed decision. In this situation, diversification and specification are employed as marketing strategies in an attempt to rejuvenate interest and to attract new users to the brand. A good example is different toothpastes for the morning and evening (Elmex in Germany). In skin care, hand care is an example of diversification, the Nivea range includes four variants (moisturising, intensive care, Q10 and night).
The downside to this strategy is fragmentation of market share.
Another way of looking at diversification is to view it as a net. A wider net catches more fish (or consumers). In the case of hand care, the consumer may not have thought that her hands needed moisturising, but an anti-ageing Q10 product may trigger her insecurities regarding ageing, and therefore trigger interest in the product which hopefully leads to purchase.
Diversification and specification are related to customisation. Today's consumer is an individual who wants products targeted to his or her own unique needs and desires. This is particularly evident in the mobile phone market, with customised ring tones and accessories. The more specific a product, the closer it gets to customisation. Customisation is the holy grail for the mass market, but difficult to achieve. Procter & Gamble closed down their customisation skin care service Reflect.com. One of the few brands still on the market is Mademoiselle Bigoudi in France which has three facial creams which are then tailored with three dermatological additives and two scent additives.
Diversification satisfies consumer hunger for novelty. As markets evolve we discover new needs - before the advent of the mp3 player we could not imagine wanting to have instant and mobile access to thousands of songs. The same applies to skin care.
In the case of skin care there's an additional, unique phenomenon driving this diversification that we do not find in other market e.g. mobile phones. This is the quest for eternal youth, which is being called permayouth. Even though some trend watchers predict that wisdom (that comes with age) will be the new status symbol, the skin care market will always cater to the desire for firm, luminous skin. By breaking the problem down into smaller parts and offering solutions for each problem, marketers create new product categories and desires.
Examples of diversification in skin care include
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Neck products (as opposed to products for neck and décolleté): Lancôme Rénergie Microlift Neck and Clarins Crème Jeunesse du Cou Multi-Régénérante |
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Under eye products (as opposed to products for both above and below the eye): Kinerase Under Eye Rescue, Clarins Men Undereye Serum |
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Under eye products targetting dark circles: Wexler Under-Eye Brigthening Cream, Hylexin, Cellex C Under-Eye Toning Gel |
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Chin products: Joey firming patch |
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Products for the area between the upper lip and nose: Bliss |
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Skin care for patients undergoing chemotherapy: Lindi |
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After sun products for the face (not face and body): Clarins, Korff, Collistar, Helena Rubinstein, Biotherm and Lancaster |
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Facial care for couperous skin: Collistar |
Diversification in the rituals of skin care
Lotions and creams were simple rub on products that demanded little from consumers, there was no ritual since there was little interaction between the user and the product. Anti cellulite products requiring a massage technique have changed our relationship with and expectations from skin care products. It's now a ritual. The newest generation of anti cellulite products is sold with massage tools: Garnier's product is delivered with a roll on, L'Oréal has teamed up with Philips for the PerfectSlim Pro. In the consumer's mind, a tool improves the delivery of the product into the skin and therefore increases performance.
Facial care is also getting its own set of tools. RoC was the first to introduce the upper mass market consumer to this phenomenon. Facial tools help the consumer to create a home spa experience, which in their minds will be more professional and therefore more efficient. This professionalisation of the skin care ceremony is also evident in home chemical peel kits. The perceived added value of gadgets is spawning renewed interest in facial steamers - which were niche products - with Panasonic advertising in magazines such as Cosmopolitan.
The Experience Economy: many marketers use the term "experience economy." By this they mean that consumers want an experience rather than a product. An experience engages the user; they are participants rather than consumers. An experience helps to create a memory which differentiates the product from its competition. Examples include home beer taps and Starbucks coffee. In skin care the experience is delivered through tools that transform a product into a ritual, through product texture - Dr Sebagh sells powders that transform into a cream, or the crackling foams and cooling products, and through kits.
Diversification in how consumers perceive their faces and bodies
Consumers used to think of their faces in terms of normal, dry, oily or sensitive. Now they are aware that each area of their face needs its own diagnosis. US skin care brand Dermalogica has divided the face into 14 zones. US dermatologist Leslie Baumann classifies 16 skin types in her new book "The Skin Type Solution, a revolutionary guide to your best skin care ever."
This fragmentation in classification is also evident in hair care e.g. shampoos for hair with greasy roots and dry ends.
In the market for slimming aids, French brands are differentiating between body shapes (endomorph, mesomorph and ectomorph). This segmentation has not yet been adopted by the skin care market.
Diversification in the understanding of our body's needs
Our perception of ageing and its effect on the skin is evolving. Brands are starting to differentiate between hormonal ageing and photo ageing (sun damage) and diversifying their portfolios accordingly e.g. Dr Murad's Resurgence series and Nuxe's Nuxuriance series.
Another example of segmentation driven by a better understanding of our bodies is oncocosmetics. In the USA, Lindi Skin is a range specifically for women undergoing chemotherapy and radiation therapy, while IS includes a Cancer Care skin care program.
Diversification in category boundaries
Skin care is moving towards nutrition.
This is a more holistic approach - beauty on the outside is the result of a healthy lifestyle, which includes a balanced diet and inner wellness (anti-stress, fulfillment). Luxury brands such as Dr Perricone have had vitamins and supplements in their ranges for years. The cosmeceutical market is booming and has attracted the interest of mass market brands. The American Olay range includes a vitamin range (launched autumn 2003). The web-site (www.olayvitamins.com) shows the "Olay Holistic Beauty Care" pyramid, which rests on three pillars: Outside Beauty (Olay products), Inner Skin Health & Beauty (Olay vitamins) and Internal Health & Wellness (wellness nutrients).
This brings us to another diversification in skin care boundaries: towards lifestyle solutions such as anti-stress measures. Rituals has shifted its focus from a colourful and fun experience to serenity; the bright colours in store have been replaced by dark woods, brown tones and Buddhas. In the UK, Boots sells a Karmatherapy line.
The beauty industry's interest in nutrition isn't limited to traditional supplements. Borba sells powders that when added to water transform it into "skin balance water." Borba is also introducing the US consumer to beauty candy, which is a well established category in Japan with sweets fortified with calcium, collagen and/or vitamins.
While many brands have used the "food for skin" claim in their advertising, the Garnier Nutritionist facial range (launched Summer 2005 in Europe) is one of the largest and clearest demonstrations of the food for skin theme, claiming to contain omega 3, omega 6 and magnesium.
Impact on the market
Choice stress: consumers are already complaining of choice stress. With such an abundance of products, how can they be sure that they're making the correct decision? The stress begins with the choice of brand and then amplifies with the diagnosis of which product within the brand is best for his or her needs. Decision making is clouded by the fear of missing an opportunity, missing a great product that could have made all the difference.
Less brand loyalty: new products are coming onto the market more frequently and making greater claims often on a semi-scientific basis. This leads to 'brand hopping' in the consumer's quest for the best.
In their pursuit of permayouth, consumers are certain to explore more niche segments and therefore embrace more complex skin care routines and product regimes. The market will therefore fragment even further. There are however two factors which will slow down the momentum:
The retailers: it's becoming increasingly challenging for manufacturers to present the complete product portfolio in store. This can leave consumers with an incomplete picture of what is available and how the products work together.
Time: consumers are described as money rich, time poor. Will consumers take the time to investigate the advantages and disadvantages of every brand and every product? Will they invest time in massaging their faces, enjoying a ritual, interacting with a new myriad of products?
Brands are already responding to these challenges with kits. Kits are a one stop shop (time saving) that give a ready made answer (reducing the fear of a wrong decision). In addition they present themselves as easy solutions, often promising results after so many days, thereby encouraging users to stick with the program. But beware, kits are also diversifying.
Author
Helga Hertsig-Lavocah is a trend watcher for the personal care and home care industries. Her agency, Hint Creative Consultancy, also tracks markets that impact on personal care and home care, such as food and beverage. Hint Creative Consultancy publishes newsletters and trend reports, and is available for consultancy work and brain-stormings.
For further details call
00 31 348 550031 or
e-mail info@hint-cc.com
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