What Effect Does the Boom in Male Grooming Have on the Beauty Industry?
The beauty industry was worth $200 billion (approximately £150 billion) globally in 2015 and has been growing steadily at a rate of 3.8% per year (EY, 2016). The beauty and cosmetics industry is primarily dominated by a small number of transnational corporations (TNCs) which own multiple brands; including The L'Oréal Group, which is the largest, Procter & Gamble and Unilever, amongst others. There are, however, a multitude of smaller, independently owned brands as well as numerous start-ups. Traditionally female-centric, the industry has seen a sharp increase in male consumers over the last 15 years in particular, reshaping and evolving the industry.
This business report will focus on this key change – the boom in male grooming – and its subsequent effects on the beauty industry.
The change will firstly be identified in terms of general growth of the sub-sector globally, with a focus on the UK market in particular.
An analysis will be carried out with regards to the reasons for the change occurring in the UK market.
The key, most important opportunities and threats of the change to the beauty industry will be identified and analysed, relevant to the UK market.
Applicable courses of action will be proposed for each identified opportunity and threat, as well as recommendations for the UK market summarised, relevant to the most applicable types of companies.
Information has been gathered for this section of the report by combining secondary research with first-hand Industrial Experience gained by the writer from working at L'Oréal for 1 year, working primarily in marketing, but also covering aspects of commercial and digital. L'Oréal was established in 1909 and is the largest beauty company in the world, with over 30 brands in its UK portfolio. (L'Oréal, 2018).
Identifying the boom in the male grooming industry
The male grooming market is booming globally and is predicted to increase from US$17.5 billion in 2015 (approximately £13 billion) to a staggering $60 billion (approximately £45 billion) by 2020 (Euromonitor, 2017). A large part of this growth is coming from greater spending power from emerging markets such as China and India, allied to its continuing growth in Western developed countries such as the UK and USA. (Statista, 2018)
In particular, Western Europe's male grooming value standing tall against other regions of the world at $8 billion 2017.
It is the larger transnational companies (TNCs) that are leading the change (Fig 1), such as Procter & Gamble stipulating $11.2 billion of the industry and Unilever at $5.1 billion. However, whilst the TNCs have been quick to jump in on this trend, creating dedicated brands or sub brands, the boom in male grooming is not limited to these large corporations.
There have been a plethora of start-up companies emerging over the last two decades in particular, successfully tapping into the under serviced needs of the modern male and helping develop this market further and faster – typical of the development of a new market.
Such start-ups include skincare brands such as Bulldog, which started in 2005, when owner Simon Duffy claimed there was a gap in the market. He stated that men's desires for grease-free, natural products had not been catered for by the TNCs. Since inception, Bulldog has expanded to be stocked in 10,000 stores globally in 13 countries. (Bulldog, 2017). Bulldog is just one of many rapidly expanding start-up male grooming brands.
To compliment the wealth of quantitative data related to the growth of the industry, it is becoming increasingly common to see male models as the face of make-up brands, such as Manny Guitierrez for Maybelline and James Charles for Covergirl in 2017 and 2016 respectively (Whipp, 2017).
Popular culture now takes as granted the requirement for male grooming, a change over the last 2 decades. Male grooming is no longer just featured in male specific communications such as GQ Magazine - which covers grooming specifically now as well as fashion and style - but also more mainstream publications such as daily and weekend newspapers and their magazines and general advertising (for example, Nivea advertising male grooming in association with Liverpool FC).
The combination of statistical evidence and the increasing presence of male grooming in popular culture helps to clearly identifying the fact that the male grooming market is booming.
What has caused the boom in the male grooming industry?
There are a number of changes that have occurred in the last 2 decades in particular, that can be held responsible for the sharp growth in the male grooming sector. Social changes have been the most influential, with cultural and economic changes also catalysing and boosting the movement.
The Rise of the Metrosexual
The term Metrosexual first surfaced in 1994 as a portmanteau merging the words “metropolitan” and “heterosexual”. The term is used to describe urban men who actively take care of their appearance in terms of grooming and fashion; something previously stereotyped as traits of only homosexual men.
The rise of the metrosexual has led to a social shift in perceptions of the “21st century man” and has led to not only an acceptance of male self-care, but increasingly, the view of self-care being an expectation of the modern-day man – a typical international standard bearer for this change has been someone such as David Beckham. This change is one of the most influential causes of the rise in male grooming products, created to cater for the demands of the contemporary man.
Revival of Barbershop Culture
The popularity of “hipster culture” has led to beards becoming fashionable once again and allows men to be more experimental and less conservative with their look. Helping form a man's identity and enabling expression, the way that a man grows and styles his beard has become as important as his hairstyle.
This has resulted in an increase in traditional service-based grooming, created to suit the modern man (Butler, 2013). This stems beyond merely haircuts, with services such as beard, ear and nose trimming offered in authentic, vintage-style barbershops. Tying in with the revival of the barbershop, the industry has seen new brand and range launches due to this cultural shift, such as the introduction of RedKen's 2018 “Brews” line (Fig. 2). The branding and packaging is based on stereotypically rustic barbershop-style authenticity.
This change has also coincided with, and been boosted further by, a shift in spending in the western world in particular, with Generation Z in particular choosing experiences and self-care over the acquisition of traditional values such as homes and marriage.
The Influence of Social Media
The dominance of social media in peoples' lives has played a key role in shaping the perception of how their users should present and express themselves, with over 65% of teens claiming to rely on social media to discover and select beauty products (Kestenbaum, 2017).
In the past 15 years in particular, there has been a sharp increase in male “influencers” on sites such as Instagram and YouTube, giving skincare, haircare and even make-up advice. With high use and reliance on social media from teens in particular, the cause-and-effect between the increase of male influencers on social media and increase in male grooming demand can be clearly identified.
The boom in male grooming: What are the opportunities to the beauty industry?
Appeal to an older audience
The opportunity to appeal to an older audience, to expand the potential customer base to incorporate males of all ages, maximising sales potential
In the UK, there are over 23 million people aged 50+ (Hayter, 2018). Whilst there is a general societal acknowledgement of the ageing population, many businesses have been relatively slow to catch on to the potential for this market. With the older population being responsible for 40% of consumer demand in the UK, spending £200 billion per year, this market potential cannot be underestimated (Moeglin, 2014).
For decades, beauty brands such as Roger and Gallet have catered towards the female audience of this age group, with products formulated specifically for their needs; however, the same does not hold true to men of this age group.
The boom in male grooming is currently dominated by a young demographic (Elsner, 2012), leaving an untargeted mature audience that beauty companies can exploit. This is of particular importance, since older consumers have higher income than younger consumers, consequently meaning they have more disposable income that they may be willing to spend on self-care (Nilsson & Tetlow, 2018).
Course of Action
Shift in perception
o 71% of younger consumers see cosmetics and personal care as an important part of their daily lives (Cosmetics Europe, 2018). Beauty companies must seek to replicate the perception of beauty products being a necessity with older men too.
o This can help cause a shift from beauty products being seen as “luxury” or a “want”, that may be only used when given as a gift by children or spouses, for example, to being a “necessity” and a “need” that older men can't live without; something that forms part of their daily routine, in the same way this has largely occurred with younger generations.
Using older celebrities as the face of the brand/for certain campaigns to assist in this perception shift
o Studies have shown that there is a high level of vicarious role model influence of celebrities on purchase decisions (Makgosa, 2009). Combining this knowledge with results from Bandura's Social Psychology study, regarding the high level of impact that role models have when an observer identifies with the role model (Bandura, 1976), beauty companies can exploit the opportunity of using older celebrity spokespeople as the face for a brand, or for certain campaigns.
o This can trigger older consumers to identify with the role model in question and can influence their buying decisions. An example of where this has been executed is with L'Oréal's House of 99 Brand, where David Beckham is the spokesperson. Using a strong, respected, sporty, successful face as the brand can help shift perception and encourage older males to purchase beauty products.
o However, it must be noted that due to extensive costs to use celebrity spokespeople, this may be more relevant to TNCs than start-ups, due to high contractual costs incurred.
The use of first-person marketing
o In terms of CRM, communication should be adapted to fit the increasingly common “first-person marketing” phenomenon (White, 2017), where consumers are segmented on aspects such as their age group and sent communication most relevant to them (for example, news and discounts for anti-ageing face cream).
Marketing can influence the growth in demand
The opportunity for brands to create and expand demand through their own marketing, and then sell to this newly created audience
It can be argued that the increased offering of male grooming products isn't the result of reactiveness to a rise in demand, but due to the marketing of beauty brands actually creating the growth in demand itself. Marketing can be at least partially held responsible for the evolved view that society has on men in the Western world, and this could explain the psychological aspects as to why there has been an increase in sales of beauty products amongst men in the UK in the last decade. (Hopkins, 2017)
An example of where this has been carried out is in Nivea's men's range, with the introduction of a shaving foam product for the body. The concept of men shaving their body is something previously perceived as emasculating, and something heterosexual men in particular would avoid.
Nivea's marketing of the product shows a muscular, masculine, attractive man using the product. Through this campaign, Nivea have subtly removed the barrier that previously existed and are subliminally influencing men to buy a product they didn't even know they needed. Brands such as Nivea that have released products and campaigns in this way may be held accountable for the rise in metrosexuality over the last 2 decades, and growth in the male grooming sector (Dean, 2014).
Course of Action
Challenging the decision-making process
o Traditionally, beauty brands may have relied on existing market data and trends when making decisions about new products and campaigns, however beauty brands must realise that lack of current demand does not necessarily mean that such a demand cannot be created and developed by the brand itself.
o Beauty brands should be aware of the power of their own influence over the consumer, as this can affect their future product portfolio and evolution of a particular brand.
The use of demand marketing and psychological manipulation
o Demand marketing incorporates a holistic approach where customer perceptions, needs and desires are shifted (Hidalgo, 2015). This psychological manipulation of the consumer helps drive demand to products once they come to the market, before demand even exists.
o Adrian J. Slywotzky discusses in his book “Creating what people love before they know they want it”, the power of capturing an emotional connection with people, to convert them into consumers through a product's ergonomics, aesthetics, message, feel and story (Slywotzky, 2012). Using this basis to produce affinity with new products can help beauty companies to expand their male grooming offering, as Nivea have done with their body shaving foam.
o However, it must be considered that to trigger perception change, there must be widespread, consistent exposure and immersion of the product type to the target audience to subconsciously normalise and create demand, or perception change will not likely occur.
o For example, due to Nivea's large size and budget, their body shaving foam campaign can be found on billboards, web adverts and television adverts throughout the country, and through partnerships with Liverpool football club. Due to the extensive cost of immersive advertising through multiple channels, this holds demand marketing opportunities more relevant to larger companies that have larger economic resources.
Look for study on influence that loreal has
The boom in male grooming: What are the threats to the beauty industry?
Misunderstanding the demands of the male consumer in today's society
The threat of demand for personalised solutions causing redundancy in gender-specific products
Gender blurring is a relatively recent phenomenon, whereby gender stereotypes are being rejected in favour of an androgynous lifestyle (Euromonitor, 2016), meaning there may not be a necessity for gender distinction in beauty products. Both male and female consumers are increasingly demanding products and services tailored to their specific hair/skin concerns to garner desired results, rather than shopping based on their gender.
In fact, American fashion magazine Harpers Bazaar predicted that “bespoke beauty” would be the biggest beauty trend of 2018 (Murray, 2017). Bespoke beauty often includes a consultation/diagnosis of hair or skin health by beauty advisors, followed by personalised recommendations – for example, a face wash targeted to reduce oiliness for acne-prone skin. This may be problematic for beauty companies, as currently the majority of brands offer distinction between female and male products in terms of product and packaging aesthetic, and consequent marketing and campaigning.
Course of Action
Integrating male and female sub-brands into one
o Brands that split their women's and men's range should consider integrating them into one. For example, L'Oréal Paris' female range and men's range operate independently. Their women's products are packaged in light colours and are freshly scented, whereas their Men Expert products have dark packaging and a musk “masculine” scent.
o Instead of focusing on gender distinction as a top priority, they should focus on the hair or skin concern that their products address. For example, their anti-dandruff daily use shampoo is currently marketed as a “Men's Shampoo”, as generally men have more sensitive, oily scalps (Unilever, 2017). This could instead be marketed as an “Anti-dandruff shampoo”, with a more neutral scent and gender-neutral packaging, to ensure customers with dandruff concerns seek the shampoo, regardless of gender.
o This solution ensures that the boom in male grooming has been acknowledged and catered for, but in a less overt way that can actually expand target audience, by not limiting products to any one gender type.
o It must be acknowledged that this may not suit men in all UK settlements; there is a higher demand for “masculine”, male-identified products in smaller settlements, with urban, metropolitan areas more open to unisex products, in line with the notion of metrosexuality; metropolitan heterosexual men.
o This means that brands that consider integrating sub-brands should identify the audience they are trying to reach and whether it is an appropriate course of action, as they may overestimate the progression/social shift of male gender roles in less progressive, more traditional, smaller communities.
o This should be a strong consideration when bearing in mind most beauty companies are based in larger cities, so may have a less clear view of the demands of people from small communities.
Merchandising and trade marketing opportunity
o Store experience plays a large role in consumer perception of a brand and consequent purchases (Ebster, 2011). The environment that a brand presents to customers can impact their buying habits.
o Kiehl's are a L'Oréal brand that have successfully altered their stores in a unisex layout, to attract both genders (Fig. 4) (Schlesinger, 2018). This builds on the gender blurring concept that they incorporate in both their product development and CRM, through email communication with customers.
o Whilst Kiehl's do offer a limited number of male-specific products, customers are encouraged to have a consultation and find products based on their concerns and desired outcome for their skin/hair.
o This puts them in a good position for the future, regardless of which way the male grooming trend develops, as they cater for the male market but in a more indirect manner. Their core focus is centred around the individual consumer instead.
Men's shopping habits differ
If this isn't acknowledged, brands may be destined for failure
There is a plethora of studies that look at the shopping habits of men and women, and how they vastly differ. Men are pre-disposed to prioritise use of the left hemisphere of their brain, which includes logical thinking, and process of elimination when purchasing products (Greenwood, 2017). They also tend to purchase beauty products when convenient, for example, when they are already in a store purchasing something else. For this reason, men shop more in brick-and-mortar shops, compared to women who shop online more, seeking out specific products (Bovell, 2018).
Evidence of this can be found in Fig. X, which holds that brick-and-mortar accounts for over 80% of distribution of male grooming products. In fact, in Western Europe this figure stands even higher at a staggering 91%.
For this reason, ranges such as RedKen's Brews may be in danger, as the structure of the brand forces it to disregard this information. RedKen is in the Professional Products Division (PPD) of L'Oréal, meaning they sell B2B - exclusively to salons and E-Retailers.
They are not sold in any brick-and-mortar shops and have a very limited presence in barber shops, where majority of men have their haircut; 44% vs 32% in salons (Soble, 2015). This may therefore limit their success, due to the brand not selling products in brick-and-mortar shops, where men purchase.
Course of Action
Beauty companies must have a thorough understanding of male buying habits before launching any men's products
o Understanding the different shopping habits that men exhibit due to genetic differences, as well as socialised gender differences, should be of critical importance to beauty companies. If male grooming products are not sold in channels that men shop through, failure is inevitable. It is also important that beauty companies stay on top of researching the way in which men shop, as this can change over time.
o With regards to Redken Brews, L'Oréal should consider a divisional change for the male sub-brand, to be part of the Consumer Products Division (CPD), which sells to mass retailing channels – hypermarkets, supermarkets, drugstores and traditional stores (L'Oréal, 2018), whilst leaving the core female-centric business in PPD.
o This has occurred in the company before, where Essie Professional remained in PPD and Essie's more cost-efficient sister brand moved to CPD to help cover all audiences through multiple sales channels. (ref) This change would ensure that RedKen Brews is sold through a channel where their target audience shop; in brick-and-mortar shops.
Start-ups should take advantage of their agility
o As witnessed in the RedKen case study, companies such as L'Oréal that have maintained their structure from before the boom in male grooming, may have more barriers in terms of less ability to change.
o This gives competitive advantage to start-up brands such as Bulldog that have surfaced during the boom, and have therefore been able to be proactive in positioning their sales channels relevant to the male beauty market.
There must be a strong acknowledgement that whilst the boom in male grooming affects all beauty companies to some extent, this can differ significantly based on a number of factors, including business objectives and scale/size of a beauty company.
TNCs such as L'Oréal must have a strong understanding of the boom in male grooming and must cater accordingly. With such a continually strong year on year growth (ref), it is of pivotal importance for TNCs to cater for this market within their brand portfolio; be this by creating/absorbing new, male-focused brands, or by adapting existing brands to cater for males.
As witnessed by recent changes in L'Oréal, it is likely to see larger companies experience materialisation of new brands under the company, such as David Beckham's new House of 99 skincare range, as well as the takeover of existing male grooming brands, such as the absorption of Baxter's of California in 2018.
Start-Ups & Newer Companies
The market for male grooming is already relatively crowded, which can create a larger barrier-to-entry for newer companies that have fewer resources, less knowledge and less impact on the industry. For this reason, targeting more niche sub-sectors of the male grooming industry may be a wise path. For example, by targeting an older male audience, start-up brands can take advantage of the male grooming boom, but in a less crowded sub-sector, where there is more space for growth and success. This is particularly relevant for agile start-ups that forego the limitations of overly complex structures that larger companies hold.
Furthermore, start-ups may struggle to gain a decent amount of the already-saturated ‘general' male grooming industry, due to difficulty in competing with long-standing brands with larger capital, so targeting a niche sub-sector can give them first-mover advantage. However, the older male sub-sector is unlikely to remain uncrowded for long, as companies will naturally progress to cater to all types of male beauty consumers as the industry continues to grow.
The growth in male grooming has been driven by societal, cultural and demographic changes and is here to stay. Not only is it a significant market now, it is set to grow further as male grooming becomes entrenched; firstly, in the younger generations of the Western world, with the potential for this to develop into the more mature, and richer, element of the population. This may occur naturally as the current generation matures and consumes a greater proportion of the consumer group, or more quickly through influence and development of the more mature generations.
Beauty companies must have a thorough understanding of why the industry is growing and the way in which it is growing, and how that can branch off and differ. For example, some brands may focus on the male consumer in an overt fashion, with others catering for men in a subtler way, producing unisex products. To have a comprehensive and evolved view of these two key factors, beauty companies must continually gather a combination of quantitative and qualitative data by making use of the extensive, existing secondary Consumer & Market Insight (CMI) data available. Where possible, they should also gather primary data; this is most relevant to larger companies that have larger market research budgets to enable them to do so.
In addition to the growth of this market in the Western world, the remaining global market is also set to follow as, for example, in Asia (China and India in particular) the middle class is developing, generating wealth, disposable income and demand. All of these create a huge opportunity for development of this market and financial returns for those companies able to take advantage of the market's growth or to even manage the market's development. There is a clear “window” of opportunity that currently exists in this fast developing and relatively new sub-market.
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