Beauty Industry Report: UK Market

Beauty Industry Report: UK Market

A Digital Marketing Perspective

Digital innovation has been key to success in the beauty industry. In the year to March 2017, cosmetic sales had grown by 6% to reach almost £1 billion in the UK, according to IRI.

This growth is largely due to the industry’s ability to track and respond to rapidly-evolving trends online, such as:

The “selfie” generation: Over 93 million selfies are taken in any given day. This “always-on” generation are driven to look flawless on social media and, as a result, beauty products are among their top beneficiaries.

The celebrity influence: Celebrity selfies and vlogs have exploded growth in certain product categories. Cara Delevigne has driven the rise in eyebrow products; Kim Kardashian for contouring products, with sales of bronzers and concealers almost doubling in 2017.

The rise in augmented reality: Personalised apps have allowed consumers to “virtually” try on products in the comfort of their own homes. Apps such as YouCam Makeup have received over 50,000 downloads in the past
4 weeks alone (ending 23-Sep).

The industry’s growth is also due to new, growing players disrupting the status quo.

These include brands, marketplaces and voices that have embraced all things digital, such as:

New market entrants who offer innovative products and services online,

Online retailers who have taken share away from direct brands, and

Social influencers who have become increasingly important to a consumer’s beauty purchases.

In this report, we focus on these digital disruptors in the beauty industry. We zoom into key brands, retailers and influencers, and detail how they have grown in popularity.

We also look at what existing brands and retailers can do in response – by either combating or collaborating with disruptors through online analytics.

1. New Market Entrants: Disrupting the Status Quo

A generation of beauty start-ups, born from a strong social following and unique brand story, have challenged the status quo. In this section we look at how Harry’s, a new market entrant, has rocked the male grooming category. We analyse who Harry’s has attracted online, and what other players can do to respond to this disruptor.

Harry’s – New York Hipster Meets London

The New York-based brand, Harry’s, has seen explosive growth since its establishment in 2013. Their appeal largely comes from their high-quality shavers and affordable “shave plans”, which are as little as £3 per month.

Harry’s had entered the UK market in July with a diverse digital strategy. Search was still the top source of traffic. However, compared to other male grooming brands, Harry’s relied on a wider range of News & Media and select Social Media sites, such as The Guardian, Daily Mail, and Facebook, to drive new users to their site.

UK Beauty Report: Online Market Share
Source: Hitwise Intelligence. Visit Share based on top 13 retailers and brands dedicated to male grooming.

From July onwards, their presence has been felt online. Harry’s visit share in the male grooming category had grown by 555% MoM, at the expense of market leader and multi-brand retailer, Shavers UK (-33% MoM), and incumbent brand, Gillette (-50% MoM).

Who is Harry’s Attracting Online?

In June, the number of visitors to Harry’s’ site was far behind market leader, Shavers UK. Fast-forward two months to August, Harry’s is competing in key demographics and regions in the UK.

Audiences aged 18-24 have risen by 828% from June, to reach almost the level of Shavers UK’s equivalent segment. Audiences based in London and South East have also grown by over 1000%.

UK Beauty Report: Harry's vs. Shavers UK
Source: Hitwise Intelligence. Audience: Visits to and NOT

In June, unique users on was significantly lower across ages and key regions in the UK. By August, Harry’s users have grown to match Shavers UK in 18-24 age group, as well in London and South East.

Compared to other brands, Harry’s utilised more News and select Social Media sites, such as The Guardian and Facebook, to drive new users to their site.

What Can Existing Players Do?

Shavers UK can respond by profiling people going to Harry’s (and NOT Shavers UK) and analysing their search behaviour. When it comes to shaving-related terms, “razors” and “stands” drew high audience reach and high organic click rates, which can be targeted in Shavers UK’s PPC campaigns.

UK Beauty Report: Harry's Audience
Source: Hitwise Intelligence. Audience: Visits to and NOT Period: July and August 2017.

Harry’s customers were also searching for wider skincare needs, such as: exfoliators, eye creams and blackhead removers.

These insights can be used in multiple ways: target terms with 100% organic rates in PPC, develop content such as blogs or Youtube videos (e.g. “how to remove blackheads”), and filter these needs into other product ranges.

Top Takeaway
Harry’s is just one example; disruptors are challenging incumbents across all beauty categories. Profile audiences that disruptors are attracting, and understand why through search. Identify high reach / high organic terms to target in your PPC and content.

2. The Retailer Channel: Disrupting Direct Sales

In reality, very few brands only sell direct, particularly in the beauty industry. Many rely on third parties to generate sales online and offline. In this section, we look at how visits to retailer sites dominate online activity, compared to visits to direct brand sites. Collaboration between retailer and brand is critical. We show how a brand like Benefit Cosmetics can use analytics on retailer sites to improve their competitiveness, and ultimately their sales through this channel.

Benefit Cosmetics: Assessing the Brand’s True Competitiveness

Online visits to Benefit’s site had grown by 5% in July MoM. This supposedly is good news for Benefit, as they had risen higher than the top 50 brand average of 3% *.

However, when we compare these figures to multi-brand retailers, a different story evolves. The top 50 brands only amounted to one quarter of the traffic that the top 50 multi-brand retailers received in July *.

The top 50 retailers also grew faster 6% MoM, with the stand out retailer, Feel Unique, increasing their online visits by 28%.

UK Beauty Report: Brand vs. Retailer - Online Visits
Source: Hitwise Intelligence. Top 50 brands & retailers are based on online visits in July 2017.
How Did Benefit Perform on Retailer, Feel Unique?

Benefit saw an uplift of 51% in page views on Feel Unique’s site in July MoM. Whilst this is significant, other brands like NYX, Bare Minerals and Clinique saw even greater increases. In particular, page visits to NYX (another disruptor brand) grew by 115%.

UK Beauty Report: Feel Unique - Brand Performance
Source: Hitwise Intelligence. Share of Product Pages Per Brand, on Feel Unique’s site.

When we zoom into specific products, NYX’s matte and extreme matte lipsticks had grown by an incredible 600% on Feel Unique’s site. A combination of blemish gels, foundations and lipsticks were also the top risers for Bare Minerals and Clinique.

UK Beauty Report: Feel Unique's Top Product Risers
Source: Hitwise Intelligence. Percentage shows relative difference in page share on Feel Unique’s site, in July vs. June.
What Can Benefit Do with Retailer Analytics?

Benefit could compare the top risers of their competitors, with their own product range.

UK Beauty report: Feel Unique - Benefit vs. Competitor
Source: Hitwise Intelligence. * Online Retail Price on Feel Unique (12-Sep). ** MoM Change = Relative difference in page share in July vs. June. Share = Share of Product Pages, on Feel Unique’s site. Arm yourself with onsite retailer analytics to understand your brand’s true competitiveness. Benchmark performance on brand and product level. Use these insights to improve your collaboration with retailers, such as promotions and featured ads.

Bare Minerals’ Blemish Remedy Gel grew by 751% in page views, amounting to 0.03% of total pages on Feel Unique’s site. In contrast, Benefit’s hero product, Porefessional PRO Balm, declined by 47%, yet still had a higher share of 0.05%. 

Seeing an uptake in competitor demand, Benefit could respond by pushing promotions or featured ads of their Porefessional range on Feel Unique’s site.

Additionally, insight into NYX’s lipstick performance can feed into Benefit’s product development. The closest product Benefit stocks on Feel Unique’s site is their Double lip liner and lipstick.

Whilst the brand isn’t known for their single lipsticks, Benefit could then look into developing a unique product combo that focuses on the matte look.

Top Takeaway
Arm yourself with onsite retailer analytics to understand your brand’s true competitiveness. Benchmark performance on brand and product level. Use these insights to improve your collaboration with retailers, such as promotions and featured ads.

Social Influencers: Disrupting Traditional Content

The past few years have seen a new voice enter and dominate the content space – the social influencer. Their rising influence have pushed brands to seek out partnerships with vloggers. But, with over 8 million influencers active globally, how does a brand begin to select the right one and measure their impact objectively? In this section, we use audience analytics to answer both the who and the how when it comes to a brand’s influencer strategy.

How Does A Brand Select the Right Influencer?

Any external collaboration should feel genuine. A way to ensure this is by understanding the true needs of your audience, and aligning these with the needs and interests of your influencer’s audience.

For example, the following brands draw varying audiences by gender and by interest (which is derived through search behaviour). Too Faced and Tarte Cosmetics attracts female fashionistas, whereas Becca Cosmetics attracts the male party-goer.

UK Beauty Report: Brand vs. Audience
Source: Hitwise Intelligence. Audiences: Visits and/or searches to brand and influencer. Period: 12 rolling weeks to 09-Sep-2017.

Applying this analysis against a list of beauty influencers, we can see that Jaclyn Hill and Lilly Pebbles draws the female party-goer and fashionista. Patricia Bright and Lilly Pebbles attracts the equivalent male segments.

Brands can use these common audience interests to find connections with influencers. Makeup Forever could partner with Jacyln Hill and feature a hot eye shadow range for nights out. Tarte Cosmetics could also partner with Lilly Pebbles to feature the latest makeup trends for men and women.

UK Beauty report: Connecting Brand with Influencer
Source: Hitwise Intelligence. Audiences: Visits and/or searches to brand and influencer. Period: 12 rolling weeks to 09-Sep-2017.
How Can A Brand Measure An Influencer Campaign?

MAC announced a partnership with ten global beauty gurus at the start of 2017. Each guru then created their own MAC lipstick shade that represented who they were and their followers.

The below example highlights the collaboration with vlogger, Fleur De Force, across key campaign milestones – when the partnership was announced and when the lipstick was revealed.

UK Beauty Report: Index with Fleur De Force's Audience
Source: Hitwise Intelligence. Audiences: Visits and/or searches to brand and influencer. Period: 12 rolling weeks ending 7-Jan for Pre-Partnership, 8-Apr for Partnership Announced, and 15-Jul for Lipstick Revealed.

MAC’s audience overlap with Fleur’s audience had grown with each campaign milestone, eventually reaching the level of competitor, Bobbi Brown, who also features heavily on Fleur’s vlogs.

But who did MAC gain specifically from this collaboration and how? When we look people engaged with both MAC and Fleur De Force online, the largest increases were seen among key age groups, 18-24 and 25-34.

UK Beauty Report: MAC, Bobbi Brown, Clinique
Source: Hitwise Intelligence. Audiences: Visits and/or searches to brand and influencer. Period: 12 rolling weeks ending 8-Apr for Partnership Announced, and 15-Jul for Lipstick Revealed.

From partnership announcement to lipstick reveal, MAC also grew in online share. MAC saw a 20% increase in visit share, contrasting to the 52% decline for competitor, Bobbi Brown.

Top Takeaway
Genuine affinity is key to any social influencer collaboration – ensure alignment with your audience’s true interests and needs. Use audience analytics to research, select and benchmark the performance of an influencer campaign.

Key Takeaways

Profile the disruptors impacting your beauty category, including: new players, new channels and social influencers. Devise a plan of attack – combat or collaborate.

For new players, analyse the types of audiences that a brand attracts and analyse why through search intelligence. Feed these insights into your response strategy, such as PPC and content.

For retailers, equip yourself with onsite analytics to understand your brand’s true competitiveness. Use product level data to assess or strengthen retailer relationships.

For social influencers, ensure authenticity by identifying and aligning your audience’s needs and interests with the influencer’s.

Use audience analytics to benchmark the performance of an influencer campaign, such as understanding audience uplift and tracking online market share vs. the competition.

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