Personal Care

Product Refinements, New Trends Drive Growth

Clever marketing counters private label

Personal care rebounded. Brand value for the category increased 11 percent in contrast to a decline of 5 percent last year.

Many brands introduced new and higher performing products to counter the lingering effects of the recession, which intensified the category's normally heavy promotional and private label activity and eroded brand loyalty.

Improved private label quality made it more difficult to convince consumers to kick the private label habit. Brands sharpened their marketing to build personalities and differentiation into their products.

To explain their perceived premium pricing, some brands emphasized the masterbrand, a strategy that added quality assurance and stretched marketing budgets.

Brands' continued expansion into the fast growing markets where the rising middle classes represent enormous new customer potential. These other trends also influenced the category:

Technology

The confluence of cosmetics and pharmaceuticals formed a new and fast-growing segment of the category.

Social attitudes

Changing views of beauty influenced product offerings and evolving attitudes about masculinity increased interest in men's grooming.

Marketing

Without abandoning traditional media, brands took full advantage of digital marketing, in-store and online.

Crossing categories

A fast-growing class of hybrid products, known as cosmeceuticals, combined the beauty and the health and wellness sectors. A cosmeceutical, for example, may be a moisturizer with a medical ingredient for enhancing skin health. The interest in cosmeceuticals reflected the shifting attitudes toward beauty, which increasingly were more about enhancement rather than cover up, looking like the best "you," and not attempting to imitate someone else's beauty ideal.

It also relates to several larger trends that cross categories. Today's multi-tasking consumers desire products that save time and add convenience. In that respect, cosmeceuticals are similar to soft drinks that perform more than one function, simultaneously quenching thirst and boosting energy.

Personal care brands active in cosmeceuticals included the three brands that appreciated most in brand value: L'Oréal and Garnier, which are owned by the L'Oréal Group, and Nivea, owned by Beiersdorf. L'Oréal led the BrandZ™ personal care ranking with a 30 percent rise in brand value. Garnier grew 22 percent in brand value and Nivea, 36 percent.

Brand value growth resulted mostly from strong financial performance. L'Oréal and Garnier also increased in Brand Contribution. Brand Contribution measures how much of brand value can be attributed to brand alone, rather than financial and other factors.

Growth opportunities

The interest in products for men continued unabated. Among the many factors driving the men's grooming trend are: growing pressure to look fit; the struggle to find or keep a job in a difficult economy; and the evolving, more nuanced view of masculinity.

The sales potential attracted new competitors, including a recent market-disrupting direct-to-consumer entry with a proposition based on price and convenience. Called Dollarshaveclub.com, it offers an online subscription service and delivers relatively inexpensive blades by mail.

Meanwhile, the well-established Gillette brand appealed to younger men in an effort to convert new, life-long customers. Along with Crest and Natura, Gillette received the highest Brand Contribution score in the personal care category. In contrast, brands that primarily target young men—like Unilever's Axe (Lynx in the UK and several other markets) — adjusted its messaging to keep young male customers interested in the brand as they age.

Do it yourself (DIY) represented another growth opportunity. DIY products expanded the category by offering an at-home solution for a service usually performed by a professional at a much higher price. Several brands introduced DIY electrolysis for hair removal. L'Oréal, Clinique and other brands offered improved, more precise applicators for lipsticks, eye shadow and other cosmetics.

Integrated marketing

Because the category is so competitive and commoditized, brands sought new ways to differentiate. Celebrity remained a central convention. But some brands defied certain conventions in order to stand out. The DIY trend led to the widespread use of "how-to" videos as a new marketing channel on YouTube. Skin care brands partnered with popular bloggers and celebrity stylists to showcase the ease and convenience of using professional products at home.

Non-competing brands co-marketed in an effort to lift the entire category. To encourage shoppers to cross the aisles, Colgate-Palmolive and Kimberly-Clark cooperated in a back-to-school marketing effort called "Healthy Habits." The program combined social media with instore presence to encourage good hygiene, like hand washing and teeth brushing. The brand value of Colgate increased 15 percent.

Fast growing markets

Even as its rate of economic growth slowed, China continued to be an important growth engine for many personal care brands.

Estée Lauder worked to develop China as its second home market in 2012. Sales of the Estée Lauder brand significantly outpaced the Chinese economy. Estée Lauder increased 18 percent in brand value.

The Estée Lauder Companies introduced a brand called Osiao, specifically for China. A further iteration on the cosmeceutical trend, the Osiao brand combines Western science and Chinese medicine.

The Brazilian cosmetic brand Natura rebounded with a 12 percent increase in brand value following a decline of 28 percent a year ago. Its success came from linking a clearly communicated brand proposition, about health and a personalized ideal of beauty, with a well executed direct sales structure.

Not usually thought of as a fast growing market, the US, with an improving economy, helped drive personal care sales. Luxury names like Lancôme, a high-end brand owned by L'Oréal, benefited from the trend.

Insights BrandZ BigData™

Brands ranked caring, desirable, responsible

Brands in the personal care category are now rated more desirable, caring and kind than brands over all, and even more than the BrandZ™ Top 100 Most Valuable Global Brands.

The personal care category brand value leaders also have a significantly higher ethical responsibility ranking when compared with all brands and with the Top 100. The personal care brand value leaders have increased steadily in these aspects since the BrandZ valuation began eight years ago.

Natura, the successful Brazilian brand that ranks in the Top 10 most valuable personal care brands, is particularly strong on ethical credentials.

Action Points

1. Have a point of view

The personal care category could use a fresh viewpoint on the question of "what is beauty" that's sensitive to cultural differences and communicated in a memorable way.

2. Innovate

Because of commoditization, growth may come from innovation, meaning looking at existing product areas and adding a new element that fulfills an unmet need.

3. Be healthy

Consumers read ingredients closely. Claims that a product is healthy need to be fully supported by the facts or risk customer backlash, which can spread loudly and widely on social media.

4. Be social

Consumers, especially young women, are using social media to learn about and evaluate new cosmetic products.

Personal Care Up 11%


Definition
The personal care category includes brands in health and wellness, beauty, and facial, skin, hair and oral care.


BrandZ Top 100 2013

BrandZ Global 2013 Report Top 100 Report

Top 100 Chart


2013 BrandZ Top 100 Infographic

BrandZ 2013 Infographic


Methodology and valuation by Kantar Millward Brown


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