30 Jun 2020
Posted in Consumer
Coty’s stake in KKW will leverage the winning formula of personality-driven beauty brands, says GlobalData
With 49% of the population spending more time on social media since the COVID-19 outbreak*, it has become apparent that online platforms will play an even more pivotal role in brand recognition and reach going forward. This is especially true for personal care sectors such as beauty. Coty purchasing 20% of Kim Kardashian West’s KKW makeup brand is a prime example, as Coty is depending on the strong personality and social-media driven KKW after its other brands are struggling, says GlobalData, a leading data and analytics company.
Like many industries, the beauty sector is struggling due to changes in lifestyles during the pandemic. Between 2019 and 2020, the US health and beauty market declined by 8.5%, from US$573.2bn to US$524.7bn, according to GlobalData COVID-19 adjusted forecasts*2. That being said, the sector is expected to bounce back in 2021, and reach a forecasted full recovery by 2023.
Companies like Coty that are struggling during this time know and value the relationship beauty brands must maintain with their audience through social media. Maintaining this engagement with consumers will keep their brands top of mind when the economy bounces back. This is why personality-led brands are key in this industry.
Yamina Tsalamlal, Associate Analyst at GlobalData, says: “With something as personal as beauty, consumers want to feel as if they’re being offered something made for them or is recommended by a ‘friend’. This is the appeal of celebrity-led brands as these beauty icons are more than the traditional brand ambassador used by legacy beauty brands – they have built their business empires on their influence, personality and style, as well as through authentic engagement with their audience online.
“Of the consumers that thought they were spending more time on social media during COVID-19, 59% of them were in the 16-24 age bracket* – a key demographic for influencer-led brands. While social media activity has increased as consumers spend more times indoors, it is the way that this age range has adopted such habits over time that makes them more comfortable with this brand relationship.”
Another key consideration is that consumers can be mistrustful of large corporations and so are attracted to smaller indie brands that they encounter online and feel with which they can engage.
Tsalamlal continues: “These personality-driven brands bring a more human touch and provide the sense that the consumer is having an authentic experience with the brand and the influencer. This allows large corporations such as Coty to benefit from the powerful consumer relationships these brands have built. Ultimately, multinationals and established beauty companies should take influencers and smaller brands seriously – if they don’t capture these passionate consumers, then the competition will.”
*GlobalData Coronavirus (COVID-19) Tracker Consumer Survey – Week 10 (June 3rd) – Global, Grouping includes: I am spending significantly more time on this than before; I am spending slightly more time on this than before; I am typically spending all day, every day on this; I have never spent time on this, but have started doing so now.
*2COVID-19: COVID-19 Impact Market Model – Retail