by Jacqueline Clarke
Diagonal Reports, argues in its latest research report a new beauty culture is emerging. It is shaped by a combination of factors such as significant technological innovations, changed consumer expectations of aesthetic transformation and contemporary consumer lifestyles. The new beauty culture is a disruptive innovation that will make it difficult, if not impossible, for established beauty market to continue business as usual.
Technology innovations reshape inherited expectations of efforts at aesthetic or appearance transformation. Examples of the best known innovations would include soft tissue injection/filler treatments, (e.g. Botox by Allergan), laser and related (e.g. Intense Pulsed Light–IPL, Fraxel), along with liposuction and weight reduction (vibration and oscillation) technologies.
Innovations, and the beauty culture they create, are a major threat to the inherited beauty culture, and to long established providers of beauty services (salons/day spas) and of beauty products and equipment.
An analysis of actual consumer spending indicates consumer migrate to the new solutions when they become available. In doing so, consumers create new mega categories in beauty, i.e., sales of $1.3 billion worldwide in 2008 as with Botox. In the United States, some four innovative skin care technologies reached sales of $1.1 billion in 2007, the first year they were counted. The rise to new mega categories has been swift, given that many were only developed and launched in the mid-90s.
The willingness of consumers to spend money on new beauty contrasts with trends in more traditional beauty categories, which continue to be stagnant in very different countries (the United States and many in Europe), even before the downturn of late 2008.
Innovations not only created new mega categories, but they quickly and radically transformed consumers’ expectations of what all beauty procedures and products should deliver. This transformation is ominous for traditional beauty––if only because it cannot satisfy these new expectations.
In short, what the new delivers is now the beauty benchmark. Many new products and procedures deliver almost immediate results, e.g., the instant eradication of wrinkles with Botox, or unwanted body fat/cellulite with lipo.
Such innovations are the beauty counterparts of Viagra—the drug offering an instant solution for erectile dysfunction (ED). They offer time-easy and effort-easy resolutions for appearance problems. The almost instant results of the innovation contrasts with the longer time frames (weeks not hours) that traditional skin care and slimming regimes require.
A contributing factor to the extraordinarily fast consumer acceptance of new beauty was their origin in the medical sphere—they were developed for medical purposes. As with any medicine or medical procedure, before being approved for use, they first had to undergo stringent investigation (clinical trials). When they were later approved for cosmetic use, they brought with them the authority of the medical. The stringent pre-launch testing of the innovative contrasts with the looser frameworks that cover cosmetic products. It is almost inevitable that clinical data is seen as marketing positive in a beauty market that can be notorious for its lack of metrics to assess what is on offer.
New beauty is a significant threat because it could erode demand in the traditional beauty market for the categories that account for most sales. As a rule of thumb, in most countries, approximately 80 percent of salon/spa industry revenues are from two or three beauty treatments. Further, the traditional salon channel serves a very limited segment of the population, no more than 20 percent, mostly adult women.
New beauty categories are not a bubble; rather, they are long term due to sustained:
• consumer concern with appearance, including body shape;
• demographic changes, such as the aging baby boomers and their attitudes to the signs of aging;
• time poor lifestyles;
• demand that crosses many consumer segments and geographical areas;
• and, falling costs make new beauty solutions more affordable, and thus more accessible.
The innovations are here to stay because they allow consumers to realize their appearance exacting demands and standards. It is highly unlikely consumers will downgrade these standards. Exacting standards drive spending on beauty methods that deliver the desired outcomes, even when those methods cost many multiples of less satisfactory products and services.
New beauty attracts the very consumer segments that traditional beauty salons/spas have struggled to attract. Men and first time users of beauty can be among the most open to new beauty because they have no built-in loyalty to traditional beauty, and thus no resistance to the new. For example, in 2007 Diagonal Reports’ research revealed first time, U.S. beauty consumers accounted for 50 percent to 70 percent of clients in the different laser businesses sampled.
New beauty and Its Delivery Of Instant Transformation
New beauty culture is a part of, and is in line with, wider cultural frames, among which the familiar and socially pervasive technology of image modification. (e.g., Photoshop.) Image modification technology continues transforming inherited expectations for outcomes of attempts at appearance modification. It does this when it allows consumers to actualize—in an instant––the image they desire, and to remove any imperfections. In this new framework, beauty treatments or products tend to disappoint when they do not transform as effectively as does image modification technology.
Looking Ahead, Who’s Rethinking Commercial Models?
Developments in the beauty market suggest innovations are no longer for the affluent, but are being rolled out into the mass market. This can be missed because the beauty salon/day spa market is extremely fragmented and under-documented.
In a generally stagnant market, innovators introduce new commercial concepts that offer consumers beauty formulas that are in line with actual lifestyles. Innovators could change beauty services in the same way that fast food companies revolutionized the food services industry in previous decades—innovation did not just result in the closure of many traditional family-style mom and pop restaurants in the United States, but actually changed eating habits.
Jacqueline Clarke is the research director of Diagonal Reports. She directs the company's beauty market research, analyzing the field interviews and preparing the reports. Clarke has presented Diagonal Reports's research at industry events, including Cosmoprof Asia in Hong Kong and the Global Spa Summit (Spa Finder) in Interlaken, Switzerland. Diagonal Reports’ latest report “New Beauty for New Consumers 2009” examines how technology innovations are transforming consumer attitudes towards beauty treatments and products.