www.SustainableBrands.com

Skin Deep Skin: The Future of BeautyMitch Baranowski, BBMG

@SustainBrands @whichmitch @ItsBBMG #TheAspirationals

09.10.14Prepared for Sustainable Brands

Special Preview of an Upcoming BBMG Trend Report

Skin Deep Skin:The Future of Beauty

–Stendhal

“Beauty is the promise of happiness.”

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Part 1. Introduction

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Hi, it’s great to meet you.

@whichmitch@ItsBBMG#aspirationalsfuture of #beauty

Headline Style 2Our Mission

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BBMG is a brand and innovation consultancy dedicated to creating brands of enduring value. We design brands and re-engineer brand experiences for growth and positive social impact.

Our Beauty Experience

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The global beauty market grew impressively in 2013 to $454 billion;$73 billion for the U.S. market. New ‘natural’ products were 62% of 1,600 total skincare launches last year. 1-3% YOY growth predicted for the category.

In 2012, we surveyed 2,500 consumers in six key global markets about their thoughts on beauty/personal care products. This summer we updated those findings with the help of 300 U.S. consumers, who engaged in quantitative and qualitative research activities.

• Focus on prestige-hungry Aspirational Consumers• Focus on skincare rituals and routines• Focus on the semiotics of skincare branding and marketing

About This Work

Sources: Euro Monitor, Mintel

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• Natural + Effective = Total Beauty

• It’s a hard journey. Make it easier. De-risk repeated trial.

• Stand for something bigger. Competing ( just) on benefits is a lose-lose.

• Slice more. By function/benefit, a “systems” approach, occasion, season, life stage, mood and values.

• Reward ambassadors more creatively.

• Foster dialogue/community; co-create shareable stuff.

• Challenge the stereotypes: less gloss, more moss.

What You’ll Learn

Product-led Vision-led

Consumer-driven(co-created, two way dialogue)

Company-driven(dictated, one-way dialogue)

The Opportunity

Most beauty brands

Your beauty brand

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Part 2. The Aspirationals

+ 2 billionworldwide

Meet the Aspirationals: Global Context

+ 33%of Millennials

+ 34%of U.S. population

A New Segmentation Model

Social and Environmental Values

Mat

eria

lism

BBMG + GlobeScan 2014

A Force For Change

+ Culture

+ Materialism

+ Social Values

MATERIALISM

SOCIAL

VALUES

CULTURAL

INFLUENCE

Why Aspirationals?

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What do Aspirationals mean for beauty?

Text

Table Stakes: Beauty Purchase Drivers Today

Safe to use Price/valueDoes a good job/qualityEasy to useNo harsh chemicals/toxinsIngredient transparency

92%90%90%90%87%

82%

(+3)

(+1)

(+1)

(+1)

(+3)

(+3)

Opportunities: Beauty Purchase Drivers Tomorrow

Natural ingredients Desirable/trusted brandNo parabens/phalate-freeNo animal testingRecyclable packagingFair labor practices

78%76%74%67%65%

63%

(+6)

(+5)

(+4)

(+2)

(+6)

(+4)

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Aspirationals are asking for honesty, transparency and higher standards.

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Put another way, they are the first to unite materialism and meaning.

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Status Seekers

Going Tribal

Happy Shoppers Buying Be!er

Style Mavens

Social Influencers

Purpose Premiums

Participation

MeaningMaterialism +

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Part 3. Key Findings

More than 300 Aspirational Consumers joined us in research activities designed to explore brand affinities, purchase drivers, shopping preferences, certifications and more. Consumers even shared a peek inside their cabinets and described in detail their skincare rituals. We’re still analyzing the data, but here is an advance look at insights and implications.

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• 300 participants• 30-question survey probing purchase drivers and affinities• Two-part journal study and home audit exploring skincare

rituals and routines

Key Demographics

Active Skincare Users

Influential and Informed

12.6.2013

Concerned for Their Skin

Competition in the Cabinet

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Consumers shared photos of the products in their cabinets.

A good reminder: You are not alone.

The diversity reflects the journey. How are you the guide on that journey?

How might the physical product be connected to content and community?

A Complex Routine

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When asked to describe their daily face care routines, our 300 respondents shared quite detailed, consistent approaches. We grouped common responses and developed the following schematic to visually represent key themes and process steps.

The size of each element represents how many comments we received about it.

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Face Care: It’s a journey.

“In the morning, I wash with cleanser that has salicylic acid then use a moisturizer with built in sunscreen. I exfoliate once a week. At night, I wash with cleanser that has salicylic acid. Moisturize with nigh!ime moisturizer or serum then use spot treatment for acne.”

– Nicole, 40, Wisconsin

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“I exfoliate with a scrub weekly and use a retinoid cream a few times a week. I use a benzoyl peroxide wash morning and night and I also moisturize in the morning and night.

– Sarah, 28, California

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“I wash twice a day. Morning routine: cleanser, toner, serum, either moisturizer with SPF, bb cream or retinol with SPF. Night routine: cleanser, toner, sometimes anti-aging serum and Argan oil. I also exfoliate once a week. ”– Shaun, 48, Connecticut

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So what about the journey?It’s a rich, multi-faceted process.

It’s complex. Time intensive. Personal. Emotional. Intimate.

It involves many products, often from many brands.

It begs questions about...• A systems approach to own the journey?• How to reinforce rituals and consistency?• How to predict replenishment?• How to best develop ancillary products (brushes, pads, etc.)?• How to tie in rewards (recognition, access, perks and privileges)?

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Part 4. Angles on Skincare

The narrative of beauty is achingly familiar: Age is the enemy. Wrinkles are the enemy. Damage. Imperfections. These things must be eradicated, nay, even reversed.

Nutrients are heroes. Nourishment is exalted. Moisture wields a mighty shield. Radiance is the desired outcome. So is renewal. Repair. Transformation. Tone and texture. A cleaner clean. Purity everlasting.

Unpacking how we show up is critical to advancing our brand design. Here are seven initial angles on skincare.

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Takeaways• Put your twist on the

Hero archetype.• Empower your

customer to be his/her best, not just look their best. Aging is inevitable.

• Balance functional claims with personal stories.

Angle #1:

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As warrior for youth.It’s about fighting or slowing down the effects of aging.

42% say finding anti-aging formulas is their biggest skincare concern.

“I look at skincare as a way to help my face and body become the best it can be at this place and time; given aging it’s a challenge because of the frustration with new wrinkles.” Nike

Takeaways• Put your twist on the

Caregiver archetype.• Reveal the philosophy

behind the science/innovation.

• Leverage testimonials (clinicians, customers) to reinforce efficacy.

• Watch out: ‘perfection’ as una"ainable ideal.

Angle #2:

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As reparation and renewal.It’s about correcting flaws, restoring lustre, elasticity or moisture levels.

44% buy the product for its efficacy.

“I combine jojoba oil, evening primrose oil, rosemary and tea tree oil to clean and moisturize. Even within a week my scars have been clearing up and my skin has be#er tone.” Evian

Takeaways• Put your twist on the

Magician archetype.• Consider more

transparency about how made, by whom.

• Take us behind the scenes; help us find what works; pair with lifestyle content that helps us be/feel our best.

Angle #3:

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As concealer.It’s about masking, hiding imperfections.

44% struggle with acne.

“My face is never as good as I hope. I still break out, red blotches showing through my makeup. Logically I know there’s no magic potion, but just once I’d love something to live up to its promise.”

Everlane

Takeaways• Audit the ways your

products help care for his/her body.

• Identify the day-parts conducive to nourishment.

• Consider segmenting by mood, life stage or occasion.

• Connect your customers to share their stories.

Angle #4:

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As sensorial ritual.The action of moisturizing provides a nourishing physical sensation that triggers mental upli$.

30% say moisturizing their dry skin is very important.

“I got a huge tub of coconut oil. It melts great, doesn’t make my skin feel sticky. And it smells good! I’ve noticed a big difference in tone and texture in just a few days.”

Spotify

Takeaways• Natural + effective =

total beauty.• Reinforce ‘no

compromise’.• Detail why these

ingredients (and not those).

• Elevate certifications, like cruelty-free and fair trade.

• Promote trial to allay concerns re: efficacy.

Angle #5:

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As compassionate worldview.It’s about caring, for our bodies (no toxins), animals (no testing) and nature (no synthetics).

51% buy a product because it has natural ingredients. 80% care that it’s cruelty-free.

“I like to buy natural or organic products, but I will only buy them if I believe they have the same efficacy as a standard brand.”

MethodHome

Takeaways• Again, twist the

Magician archetype.• Personalize the

science with your philosophy/approach/people behind the innovation.

• Temper expectations re: miracles: showcase real women, relatable experiences.

Angle #6:

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As technical achievement.It’s miraculous, or wants to be, with the science promising speed, efficacy and agency (multiple benefits).

A majority are skeptical of product claims.

“I try my best not to buy into the hype. They use younger, non-wrinkled women who are probably 14. If your product really works, use women who seriously need it.”

Pixar

Takeaways• Add your twist to the

Explorer archetype. • Audit the brand for

ways to (1) celebrate how his/her journey is unique; (2) ease the pain points.

• Leverage data to personalize delivery.

• Enrich with affinity brand partnerships (e.g., health/wellness).

Angle #7:

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As personal journey.Finally, it’s personal, since our skin is literally a reflection of our sense of self. And no two people are the same.

Only 4% say that commercials influence what they buy: “That’s not me. I am different.”

“There are so many products. I get a headache and feel terrible overwhelmed to find what actually works. That’s probably why I change products so much.”

Clif Bar

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Part 5. In Conclusion...

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The future of beauty will be defined by fundamental shifts.

Today:Perfected & Final

Tomorrow:Perfected & Meaningful

Today:Chasing Trends

Tomorrow:Creating Yourself

Today:Functional Benefits

Tomorrow:Practical +

Social +Tribal Benefits

Today:How-To Content

Tomorrow:Lifestyle Content

Today:Onlooker

Tomorrow:Contributor

Today:Retail

Tomorrow:Retail + Services

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How will your brand capitalize on these shifts?

Discussion

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If you would like to receive an advance copy of the final trend report, please email:

Aria McLauchlanBusiness Development & Strategic Partnerships

amclauchlan@bbmg.com

Contact

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www.SustainableBrands.com

Thank You

View the recording of this webinar in the SB Libraryand learn more at TheAspirationals.com

@SustainBrands @whichmitch @ItsBBMG #TheAspirationals