How is the beauty industry “rejuvenating” to reach Gen Z?

The beauty landscape is rapidly evolving, with E.l.f. Cosmetics emerging as a formidable challenger to major players like Estée Lauder and L’Oréal by innovating their marketing approaches.

Summary:

1. E.l.f.’s Leap
2. Keeping Up with Trends and Standing Out
3. Anti-aging Skincare

Maybelline recently introduced their first-ever CGI avatar named May, alongside their Falsies Surreal Mascara line, as part of a broader trend where leading beauty brands are leveraging advanced technology, hit songs, and virtual influencers to captivate Gen Z. This generation, characterized by its rapid changes and craving for novelty in marketing activities, is compelling longstanding conglomerates to revamp their business strategies.

While younger consumers have long been a key target demographic for the beauty industry, the spending power of Gen Z is even stronger, projected to surpass that of Millennials by 2031. According to Piper Sandler, spending in the makeup, skincare, and fragrance categories among this segment increased by 19% compared to the previous year.

As media activities geared towards this generation continue to escalate, beauty giants like Estée Lauder and L’Oréal have adapted their business strategies. However, the ever-changing trends and the emergence of new brands have made it increasingly challenging for them to keep pace.

The primary driver behind the beauty industry’s sales growth is cosmetics consumption, which witnessed a 32% increase compared to the same period last year, according to Piper Sandler’s Taking Stock with Teens report.

E.l.f. Cosmetics’ success can be attributed in part to the release of high-quality products at lower price points and a meticulously planned and executed marketing strategy. The brand has significantly more influence than well-established brands like Revlon or L’Oréal, according to Evan Horowitz, CEO and co-founder of advertising company Movers+Shakers.

In May, the brand collaborated with TikTok influencers Ian Paget and Chris Olsen, whose dating and subsequent breakup story garnered significant social media attention. Their video discussing the breakup while using E.l.f. products went viral and attracted thousands of views.

E.l.f. also became the first brand to launch a TikTok hashtag challenge with an original song. Investing in social media, especially TikTok – Gen Z’s favorite platform – has become essential for marketers aiming to reach this demographic, particularly in the beauty industry, which is deeply influenced by social media.

Maybelline’s strategy has been to invest in social media, particularly through content creators, as a core strategy in targeting younger consumers. These efforts drove sales of their Sky High mascara line, generating over $100 million in revenue, according to Jessie Feinstein, Maybelline’s SVP of Marketing.

A reliance on social media marks a transformation for this century-old brand, as diversifying their media budgets in recent years has yielded positive results, contributing to L’Oréal’s 13% growth in the first quarter, fueled by Maybelline.

Maybelline has experimented with various channels frequented by young consumers, such as engaging in activities on Wattpad during Mental Health Awareness Month and launching an interactive ad, “Maybelline Mascara Merge,” capitalizing on the growing popularity of mobile gaming.

The brand also created a Virtual Influencer named May earlier this year to support future metaverse activities. Feinstein admitted that the brand had been slow to fully enter the virtual world.

Other successes for the brand include the launch of Maybelline’s Super Stay foundation, promoted earlier this year through collaborations with two of the industry’s most famous makeup artists, Mikayla Nogueira and NikkieTutorials, who hosted a personalized makeup class, generating enthusiastic feedback and lively conversations about the product.

While the cosmetics segment is experiencing a surge in sales, there is a corresponding decrease in skincare spending. However, skincare is still up by 11% compared to the same period last year, according to Wolfmeyer of Piper Sandler.

Some brands have successfully maintained their positions, particularly CeraVe (L’Oréal), The Ordinary (Estée Lauder), and Cetaphil (Galderma), which remain the top three preferred brands among young consumers in the latest survey.

For Clinique, owned by Estée Lauder, engaging with Gen Z requires a focus on personal touchpoints and digitalization. Earlier this year, the brand launched the “Protect Your Glow” campaign around Coachella to advertise its new Moisture Surge SPF 28 sunscreen.

The campaign kicked off with Clinique’s Hydration House pop-up shop in Indio, California, along with sponsoring a poolside party at the Day Club Palm Springs for the last two weeks of April.

Throughout the event, Clinique distributed 34,000 samples of Moisture Surge 100-Hour and Moisture Surge SPF 28 products and garnered over 350 million media impressions, reaching 5.1 million views on TikTok and Instagram videos.

This campaign is one of the brand’s latest efforts to establish a direct connection with Gen Z without relying on endorsements from older consumers, according to Guastella.

“Word-of-mouth across generations is common because we often hear stories from consumers about products introduced to teenagers by their mothers who have been fans of the brand for many years.”

Clinique consistently collaborates with content creators to change brand perceptions, particularly for Gen Z, said Guastella. The brand launched The Clinique Lab in March, a virtual science experience where consumers can create a custom character and navigate through six different territories. This virtual world complements Clinique’s in-store experience of the same name introduced last year.

The focus on science in lab-like experiences has been carefully chosen to align with the brand, Guastella said. This could resonate with Gen Z individuals who use TikTok as a search tool.

Overall, the beauty industry is witnessing a shift towards more interactive and digitally-driven marketing strategies to cater to the preferences of Gen Z, who are increasingly influential in shaping consumer trends.