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Why It's So Hard for Beauty Brands to Cross Over From One Category to Another

Amidst a booming skincare market, makeup-first labels are angling to become purveyors of moisturisers and serums, too. But can a brand be an authority in both?
Makeup products | Source: Shutterstock
By
  • Rachel Strugatz
BoF PROFESSIONAL

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NEW YORK, United States – Too Faced is going from mascara to SPF, Kylie Cosmetics from lip kits to vitamin C serum, and later this year, Huda Beauty will debut skincare.

Increasingly, makeup labels with deep roots in colour are turning their attention to moisturisers and eye creams. Why? The above businesses might be thriving (Huda Beauty reportedly did $400 million in sales in 2018, just two years after her entry into cosmetics), but the makeup category as a whole is sluggish. In the first quarter of this year, prestige makeup sales in the US dipped by 4 percent. Prestige skincare sales, on the other hand, grew 13 percent last year, according to The NPD Group.

Widening the breadth of product offered can attract new customers. Non-makeup wearing Kylie Jenner fans might now buy Kylie Skin in hopes of achieving the fresh face Jenner posted in her filtered Twitter video. Consumers too intimidated to try Too Faced's dramatic "Better Than Sex" mascara can opt for a hydrating "Good in Bed" serum instead.

Plus, there’s increased pressure to become a “lifestyle brand.” It’s no longer about owning a single category – these labels want to touch all aspects of a customer's beauty routine.

Even Lululemon wants in.

This week, the brand introduced a "self-care" range in its own stores and on Sephora's e-commerce site (the fitness wear line's newish Chief Executive Calvin McDonald was previously chief executive of Sephora Americas). Leaping from activewear to skin could be more challenging than moving from colour to skin, but post-gym friendly beauty products are resonating. There's a good chance that Lululemon devotees populating $35-a-pop boutique fitness studios will be eager to buy the brand's $34 dry shampoo or $12 mini aluminium-free deodorant.

“If it’s marketing…or a knee-jerk reaction to a consumer trend, I would advise them to think very carefully around their reasoning,” Alexia Inge, co-founder and co-chief executive of UK-based e-tailer Cult Beauty, told me. “New categories need to…solve something meaningful for their core customers.”

Lululemon's self-care line | Source: Courtesy

During a recent visit to Too Faced’s headquarters in Irvine, California, affectionately known as the “pink palace,” co-founder Jerrod Blandino said he’s creating skincare that will “make your makeup better by making your skin better.” His end goal is for wearers to need less makeup. (This is probably not the goal for the Estée Lauder Companies, which bought Too Faced in 2016 for almost $1.5 billion.)

“A few years back skin was not hot and colour was hot. Now that’s flipped,” said Tamara Brown, founder and chief executive at Tamara Brown Consulting.

But this doesn’t come without challenges.

Brown said brands venturing from colour to skin will have a harder time than the reverse because it’s easier to add pigment to a treatment product. Skincare is a more serious category due to the clinical nature of certain ingredients, especially active ones in high concentrations. For a customer, trying an acid-based serum is riskier than a lipstick or highlighter.

Inge thinks some transitions “breed less consumer resistance,” such as skincare to wellbeing. In her experience, hair care to makeup and nails to skincare has not been achieved successfully.

“In musical terms, it’s like the difficult ‘second album,’” Inge said.

Consumers can certainly be sceptical of a second act. Grande Prairie, Canada-based Brittney Persson, 29, is wary of skincare products that come from makeup-first labels. “They don’t appeal to me as much as skincare brands that focus solely on skincare... with a dermatologist attached who’s developed the product after having a practice,” she said. Her go-to’s are Dr. Brandt and Dr. Murad.

Others are eager to try skincare from leading makeup lines – if it’s a brand they already trust.

“I’m all for it. I’d prefer that over a new skincare brand or brand I’ve never tried before,” said Lesly Emahiser, 33, from Newport News, Virginia, a fan of Too Faced’s primer who plans to try the “Hangover” skincare collection. The same goes for Paulina Reyes, a 35-year-old from Guadalajara, Mexico. A devoted “Hangover” primer user, she assumes Too Faced’s skincare “will be good.” She’s looking forward to trying the serum and moisturiser.

Here are four tips for brands looking to cross over into new categories:

Work With Authorities

Product extension comes down to authority. A brand might do one thing really well, but the company has to convince consumers that it can also do a different thing just as well.

A quick way to bolster credibility at the onset, as well as build trust, is to tap outside experts to help. For example, La Mer – best known for its Crème de la Mer moisturiser – partnered with top makeup artists like Violette and Patrick Ta when it launched foundation and concealer in 2016.

Too Faced's new serum | Source: Courtesy

“They realised that they can’t just rest on their laurels if they want to get out there and be an authority [in colour]. They need someone else who has an authoritative viewpoint to say, ‘We love it [the product] because of X, Y and Z,'” Brown said.

Co-merchandise

Customers might not be running to Sephora to get Too Faced’s new skincare range right away, but they might happen to stumble upon it while grabbing a ‘Better Than Sex’ mascara. Co-merchandising at a retailer allows for discovery, and if a label can control their own selling experience it’s even better. Besides wider margins, a strong direct business allows a brand to communicate and sell on their own turf – and terms.

Give Customers What They Want

Requests from followers is what drove Jen Atkin, founder of haircare brand Ouai, to create a limited collection of four scents last fall.

“The community helped us to leverage data and test it out in different categories. Our fragrance…sold out in three days,” Atkin said. As a result, fragrance will become a permanent part of Ouai’s lineup, launching in all Sephora stores next month.

The retail success of Ouai’s dual-use products, a rose hair and body oil and a scalp and body scrub, also led to the development of a standalone body care collection. The first two explicitly body products debut in September, with more to come for holiday.

Adapt Accordingly, But Stay True to Your Brand

Inge cited Hims to Hers as an example of a company that failed to cross over successfully because, in her opinion, applying male consumer strategy to target women doesn’t work. Hims’ cactus campaign was a hit with men, she said, but the marketing for Hers’ version of “female viagra,” Addyi, “fell flat for many."

“Female sexual pleasure has become... something to be approached with more subtlety than pushing an anti-anxiety drug that works in a completely different way from Viagra – and ultimately oversimplifies female sexuality,” she added.

Ouai fragrances | Source: Courtesy

With Too Faced, the “Hangover” skincare is an extension of the brand’s Hangover primer and setting spray. While it might be a more serious category, Blandino gave serum and moisturiser cheeky names such as “Good in Bed” and “Good to Go” – very much in line with the way he names mascara things like “Damn Girl” or “Better Than Sex.”

“The Millennial and Generation Z consumers are becoming category-agnostic – they buy primarily into brands with an ethos that closely aligns with their beliefs – it doesn’t matter whether the brand sells shampoo, sage smudges or sex toys,” said Inge.

THIS WEEK IN BEAUTY

Lululemon unveils a beauty line. The Toronto-based brand launched four "self-care" products this week, including a moisturiser and a dry shampoo.

Kylie Jenner might have a new investor. It's rumoured that Coty is in talks to buy a 51 percent stake of Jenner's line for "at least $600 million."

These doctors are experts in skin and the mind. Psychodermatologists, of which there are only a handful listed in the US, are double-board-certified dermatologists and psychiatrists.

L'Oreal Paris has named its first woman president. Delphine Viguier-Hovasse, who formerly headed up Garnier, will succeed Pierre-Emmanuel Angeloglou as global brand president at the brand.

Beauty box subscriptions aren't dead. Allure's editor in chief called the publication's beauty box a "success" that's diversify revenue.

Vitamin D supplements could have fewer benefits than you think. New research shows that vitamin D supplements are "useless for most people."

People are threatening to boycott brands that work with Bella Hadid. In response to the model posting an Instagram story perceived to be racist by Saudia Arabia and the United Arab Emirates, people took to social media to post videos of themselves throwing out Dior beauty products (Hadid is an ambassador of the brand).

There's still a white space in the clean beauty market. Clean skincare lines might be ubiquitous, but there are far fewer options when it comes to clean colour cosmetics brands.

The Business of Beauty wants to hear from you. Send tips, suggestions, complaints and compliments to our beauty correspondent, Rachel Strugatz (rachel.strugatz@businessoffashion.com).

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