Whose buying Prestige Beauty?
For our final semester as Creative Brand Managers, we are tasked with contacting a client of our dreams to help solve a business problem. Because I have an addiction to makeup there was no other brand than MAC Cosmetics. In January I set out to solve the task of making MAC Cosmetics more relevant to it’s customers and keep them coming back. Below is independent study project that resulted in an individual hour long client presentation focused on color exploration.
Staying relevant in a world of color
Until recently there was only one place to buy prestige cosmetics and that was the glamorous department store makeup counter. Here artists dressed in all black created a more personalized experience applying cosmetics for your skin tone, skin color, and skin texture. It made you feel special, instead of just throwing a mascara from the walls of a CVS into your basket. It was this experience that led the prestige cosmetics industry to grow at an annual rate of 7% throughout the 1990’s causing Estee Lauder Companies to look for a brand to fill the white space in their portfolio and bring in a new group of customers.
Rise of Prestige Beauty Market
While other potential brands to acquire were following category conventions of using supermodels and actresses as their spokesperson, there was one brand that was different. MAC Cosmetics chose a drag queen from Atlanta, GA to represent every that the MAC girl should be. Ru Paul gave portrayed the “spirit of irreverence, outrageous style and irrepressible love of life.”
It's this no holds bar- be whatever you want to be and wear whatever you want that differentiated it from the rest of the cosmetics companies at the time, especially among the department store counters. They valued individuality and self-expression over everything else and adopted the motto “All ages. All races. All sexes.” This was a store that accepted both the career driven woman looking for an everyday shade of pink and a drag queen looking for a bright shade of blue glitter. MAC cosmetics was different and forward thinking around acceptance causing Estee Lauder to acquired the brand in 1998.
Under Estee Lauder’s umbrella the brand expanded quickly becoming a staple in beauty counters in malls across the country.
Today, MAC Cosmetics sells 1 lipstick and 1 eye shadows every two seconds in 106 countries.
Even though that equates to 86,400 lipsticks and eyeshadows sold each day, I was tasked with the mission of uncovering a way to keep MAC Cosmetics relevant to its customers and keep them coming back.
Growth through acceptance
Where they shop:
Where does MAC Cosmetics fit in?
In 2015, the industry generated $56.2 billion in the United States and is expected to grow by an annual 6.4% until 2020. And the category is made up 10 major conglomerates that control the majority of the market. Many of these companies range from skincare to cosmetics to fragrance and capture audiences from low end price points such as Cover Girl by P&G and NYX by L’Oreal all the way to high end like Christian Dior from LVMH and of course Estee Lauder.
And Estee Lauder is the global leader in prestige beauty with sales of $10.78 billion last year with 37% coming from the United States. The prestige beauty market reached around $16 billion around the globe and has seen sales increases of an average of 7% since 2014. With cosmetics making the healthiest sales growth of around 13%.
This rise in prestige is intriguing even more because last year was the first time that the prestige market surpasses the U.S. mass channels. Estee Lauder followed suit with makeup being the highest growth in sales and from their annual report noted that they achieved strong double digits sales growth last year for MAC Cosmetics.
Aspirational IT Girls have a spending power of over $43 billion and influence an additional $600 billion in family spending. They grew up during the recession and place a huge importance on money, in fact 39% say they would rather “save money then spend money.” So what do they spend their money on?
1. Experiences- The first isn’t surprising these girls want to spend their money on experiences. They value hanging out with their friends over anything and enjoy activities like shopping, hiking and volunteering. These girls suffer from extreme FOMO and can always be found in packs.
2. Technology- Their FOMO is slightly reduced from being constantly connected. These girls multitask across 5 screens daily and spend 41% of their time outside of school on their computer or a mobile device. And if you were to try to take these devices away from them- 79% would experience emotional distress. These phones are their lifelines, extensions of their being where they are able to talk with friends, absorb entertainment, and gain information about their surrounding world.
3. Makeup- The last category is the most surprising- makeup. For girls that value experiences why would they spend their money on possessions such as cosmetics?
What Aspirtoinal IT girls spend their money on:
We live in the Golden Era of Selfies
The time where you could sleep in, slack on putting on your makeup and it wouldn’t matter because only a few people would see you are GONE. With cameras in everyone’s Smartphones these girls are living in an era where every single second of their day is documented to be shared- and they feel they need to look camera ready- 24/7/365.
In fact, the majority of my survey respondents wore makeup between 5 and 7 days a week. These girls are looking for products to help them look selfie ready which perfectly correlates to the four highest growing makeup categories: Eyebrows- which now make up 11% of prestige eye makeup, contour kits- so everyone can get the Kim Kardashian chiseled cheekbones, matte lips- where browns and nudes have surpassed pinks and reds, and foundations- that offer filter like effects making you HD ready.
So even though these girls are spending money on makeup, what makes them lean toward prestige beauty instead of mass drugstore brands? There were three main drivers:
The video platform for sharing content has become the educational tool allowing anyone to become a professional makeup artist. In fact- YouTube remains the world’s leading online beauty video consumption platform with more than 1.7 billion beauty videos on YouTube which experienced a 50% growth from just 2014. 55% of these girls are accessing beauty videos from their mobile devices. The CEO of YouTube noted that this YouTube reaches more girls in this demographic than any television network. As when you break the beauty video content down into the various categories- makeup is the fastest growing segment.
These girls are learning how to apply makeup from various beauty gurus. They turn to these gurus for guidance when it comes to reviews, tutorials, product recommendations, and even life advice.
They become connected to these girls, acting as if they are a family- supporting one another as well as the guru. Which is no surprise that the five most influential celebrities among these aspiration it girls are YouTube stars.
They appreciate that fact that these girls are just like them- average girl next doors- who just happen to have an obsession with makeup too. They enjoy the candid sense of humor, and fact that they are truly being themselves.
Now that we understand the motivation behind these Aspiration IT Girls, we need to understand how they shop for makeup. And the journey begins on YouTube.
Instagram- the photo sharing medium and collector of the selfies- has become a community driven digital market place for indie brands to reach the masses and Aspirational IT Girls to interact with their favorite influencers. While the majority of the 400 million active users using the platform are under 35- for these Aspirational IT girls- Instagram is life. 90% are on the platform and view it as the most important social media platform.
In fact this platform is the reason Anastasia Beverly Hills has become so successful. Last year- they were the fastest growing prestige brand in off and online sales. And her years over year sales have quadrupled since 2012- which just so happens to be the year she joined Instagram. She is the most followed beauty brand and in fact- her interactions with consumers is equal to the combined interaction of the next top brands- which includes MAC Cosmetics. Her strategy is clear: frequency. She had a dedicated team responsible for posting once every 3 hours between 7 a.m. and midnight averaging around 11 images a day. Because these girls are constantly on their phone, and constantly on Instagram- she is providing them with photos so each time they check back into the app they have the ability to interact with the brand. Her other strategy relies on what she calls “reverse mentors” Her philosophy is that showing the products on gurus and everyday girls make the brand feel more authentic.
And she's not the only brand that has turned Instagram into a platform for driving sales. Each of these brands was either non-existent or flew under the radar until they joined Instagram.
Here they are able to share their stories, talk directly with their potential consumer and provide new products that they know these Aspirational IT Girls will want. And these smaller brands help make them feel more unique. These girl are yearning to be more expressive and find new ways to stand out and by having products that are new, cool, and different from traditional brands- makes them feel special.
It should come to no surprise that Aspirational IT Girls are turning to specialty makeup stores like Sephora and Ulta. These stores have tapped into every little girl’s dream of being able to run around and play with their mom’s makeup bag- and the best part is they can’t get in trouble this time.
Customers approach buying beauty products as more of a treasure hunt, and the mission is that much easier in a place where you can easily test virtually any product. Plus, both Sephora and Ulta carry a large selection of the niche, under-the-radar brands these girls are turning toward.
It’s this need for exploration that makes these Aspirational IT Girls harder to keep brand loyal. They are constantly willing to replace products in their collection with substitutes. The days when one girl’s makeup bag would be all one brand are gone. Instead girls are beginning to define themselves not by the brand they carry but by the products they own. Instead of getting hooked on certain brands, these girls are getting hooked on a certain type of product.
The good news is that Aspirational IT Girls love MAC Cosmetics. They believe it is the ultimate cosmetics brand. The problem however is they don’t have the same love for the experience at the store- instead of offering an exploratative experience, they view MAC Cosmetics as a destination for replenishment- something that is transactional. For instance one survey respondent said “When I’m out of prolongwear concealer, I’ll go get some more. When I hit pan on my blush, I’ll go get some more. But if I’m searching for something new there’s no point in visiting MAC.”
They know the store offers high quality products they love in a wide range of colors. In fact “color” was the number one used word to describe the brand. And that makes sense because during it founding the brand decided to “Establish itself as the ultimate form of colour authority.”
But color is unique- its sets moods, attracts attention, and makes a statement. There's a psychology behind colors and the story they tell. By selecting a specific color scheme you can create an ambiance of elegance, warmth or tranquility, or you can convey an image of playful youthfulness.
And this idea of setting moods with color- is something these Aspirational IT Girls do on a daily basis.
When it comes to exploring, there are no rules.
Only a world full of rich colors.
Don't tell them what to do, give them the tools to discover it for themselves.
allows bold statements that refresh their look each day.
By redefining artistry through coloration and experimentation, M·A·C Cosmetics will capture aspirational IT girls on their journey to discover the color of their every mood.
M·A·C Cosmetics helps you discover your colorful self.
APP designed by: Christina Foy