Personal Care

Smart shoppers expected low prices, more benefits

Personal care remained a consumer priority.

Even as they made fewer shopping trips and eliminated frivolous purchases, consumers bought personal care items, sometimes as affordable luxuries— lipsticks and moisturizers—but also because looking good in some ways became even more important during trying economic times.

Consumers tried to spend less, adopting smart shopping strategies, researching more online and sometimes switching to private label when the functional or emotional benefits didn’t seem worth a brand’s premium. Consumers also selected more do-it-yourself options that promised salon-quality results for at-home prices.

At the same time, consumers expected multiple benefits. In hair treatment, they selected products that not only beautified hair but also helped compensate for damage inflicted by straightening or other processes. Increasingly, functional benefits related to health and wellness, a trend also evident in other categories.

The emotional benefit was as much about feeling good as about making the right impression. Some celebrity brand representatives communicated the more inclusive message. When British singer Cheryl Cole presented the glamour of L’Oreal, the tagline was “We’re so worth it” rather than the brands usual, “Because I’m worth it.” Actor Hugh Lurie conveyed a similar point of view for L’Oreal for men.

Category resists private label

Gillette selected the actor Adrien Brody, intense but not conventionally good looking, as one of its “Masters of Style” to make the brand seem more accessible to men in general and to help make shaving the gateway into skincare and other men’s care products, a growing opportunity for brands like Gillette and Dove.

But the cost of replacement blades inspired at least one website to sell lowprice blades by subscription. Especially when people feel financially stressed, basic personal care products, like soap or body wash, face a similar loyalty challenge. For certain other personal care products private label is less of a threat.

Women consider face care a high priority, for example, and usually remain loyal to a preferred brand, such as Olay. In feminine hygiene, women might switch national brands but are less likely to select a private label. For other products, like body care, financially pressed consumers are more likely to do without the product than switch to private label.

Trust and social media

The importance of trust in the personal care category is one reason that North American and European brands dominate the personal care category. The Brazilian brand Natura is an important exception. The brand’s claims about health and sustainability gain credibility from its association with Brazil as a nation known for its vast rain forests and natural resources. Trust is especially evident in the global success of Colgate and Crest. Colgate ranks in the Top 10 in TrustR, the BrandZ™ global ranking of brands that inspire consumers to trust and recommend them.

Peer reviews are important for building trust in personal care. While expert testimony remains important, many personal care brands engage consumers in conversation in social media. Social media is especially useful for the global brands because YouTube and other sites reach global audiences.

In marketing Nivea to various demographic segments, the brand reached young people with a social media campaign around the singer Rihanna. Axe, the brand known for expertly using social media to pitch men’s grooming products, introduced a new scent, called Anarchy, with a version for men and another for women.

Brands faced ups and downs in BRICs

Developing markets remained critical to the growth of personal care brands. Estée Lauder experienced strong growth in China. Recognized as a leading prestige brand, Estée Lauder is developing facilities to make China what it describes as a second home market. The brand also is strong in Russia and Brazil where Clinique, an Estée Lauder brand, also increased its popularity.

Other brands encountered problems in the BRICs, however. Natura expanded its direct sales team in Brazil by more than 14 percent to over 1.1 million agents. Sales improved both in Brazil and worldwide. But Natura’s stock price declined by 20.4 percent, roughly following the arc of the Bovespa Index.

Avon’s results improved in the fourth quarter after its stock plunged on poor third-quarter results. Ultimately, revenue gained only 1 percent in 2011, for both internal reasons and difficulties in important markets, including the US, Russia and the company’s largest market, Brazil, where Avon experienced supply problems.

Avon maintains direct sales representatives in 65 countries and territories and is present in 42 other locations. The company derives 60 percent of its sales from fast growing markets. Also hurt by a bribery scandal in China, Avon is in the midst of a leadership transition.

BrandZ Top 100 2012

BrandZ Global 2012 Report Top 100 Report

Top 100 Chart

Methodology and valuation by Kantar Millward Brown

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