After the standout successes of Fenty Beauty and Kylie Cosmetics, it’s clear to see why many beauty execs thought it was a billion-dollar idea to team up with social media influencers, movie stars or musicians to create brands. So why are major retailers now pulling influencer brands from their shelves? And why did the incubator behind Ariana Grande’s range just file for bankruptcy?
“Addison Rae or Hyram Yarbro's social media presence may have been enough to encourage an initial purchase of their respective beauty brands,” said Olivia Stelmaszczyk, Beauty & Fashion Research Analyst at Euromonitor. “But consumer behavior was not sticky enough to continue supporting shelf space,” Stelmaszczyk told CosmeticsDesign-USA.
More fatigued than influenced
In mid-2022, Ipsos released a report from its Synthesio AI-enabled consumer intelligence platform that tracked online conversations about 53 beauty brands in the US, UK, and France and discovered how consumers felt about them. It analyzed over 1.5 million social media conversations (in English) about celebrity makeup, hair care, and skin care brands and discovered negative sentiments among consumers. Many of these conversations revealed that people felt skeptical about whether celebs actually used the products they pushed, and many said they felt the market was oversaturated.
It’s a valid point. Within the past year, a host of big-name stars jumped on the beauty brand bandwagon, including Scarlett Johansson, Gwen Stefani, Jared Leto, Kate Hudson, Harry Styles, and Brad Pitt, to name a few.
Minimal attention spans
“We are living in a time with minimal attention spans and lots of outlets competing for that attention. There certainly seems to be fatigue in the marketplace for the seemingly non-stop rate of new launches,” said Anna Mayo, VP of Beauty & Personal Care Thought Leadership at NielsenIQ. “We saw seven celebrity brands launch in 2020, 11 in 2021, and 12 in 2022, so the rate of new launches is accelerating. Consumers are starting to question the intention behind the launches of these brands, is it because of the celebrities' love for beauty and skin care, or is this purely a commercial opportunity?”
The increased popularity of TikTok in the beauty industry had also boosted consumer engagement with less-polished “lo-fi” content and more interest in micro-influencers in the beauty industry. The social platform changed the trends cycle in 2022 and seemingly had the power to create a new fad on a weekly or daily basis. This was set against a backdrop of the wider movement of “embracing the imperfect”, which had been steadily growing more popular. As many celebrities and influencers are built on an image of being conventionally beautiful and “perfect” their images are at odds with this movement.
Yet Mayo cautioned that it’s still too early to say whether new celebrity brand launches are failing. “Of the 37 celebrity beauty brands we are measuring in our database, 22 are experiencing year-over-year growth, five are in decline, and the rest are too new to measure growth,” she said. “Considering that 90% of all new brand launches across CPG fail, I think the growth rates look more promising than average for these brands.”
Sales data from NielsenIQ revealed that between mid-2021 and mid- 2022, US dollar omnichannel sales for celebrity beauty brands grew by 32% year-on-year. By Q2 2021 total omnichannel dollar sales in the US stood at $593,314,032 and by Q2 in 2022 they were at $785,979,097. But will these figures continue to rise by Q2 of this year and beyond?
Celebrity brand unicorns do still exist
Stelmaszczyk pointed out that some of the newer celebrity beauty brands have seen great success. “Certain players are finding success in the increasingly competitive and challenging market,” she said. “We see some celebrity brand "unicorns" like Rhode by Hailey Bieber, and Rare Beauty by Selena Gomez, telling a different story.”
She believed that brands like Rhode better resonated with customers because they built on the values consumers sought from their brand choices, such as authenticity. Rhode’s founder, Hailey Bieber, had indeed been a voice in the minimalist beauty space for years, and her simple yet effortless product range echoed the values she promoted, which also happened to tie into the popular "clean girl" aesthetic trend.
Mayo also agreed that to succeed, celebrities launching beauty brands must prove that the company aligns with their values. “Consumers seem to be demanding authenticity from celebrity brands; they want to know why the celebrity launched their brand, what the emotional connection is with the brand, and how dedicated they are to its success,” she said. “Celebrities now need to work a bit harder to prove why their brand is important and what it means to them.”
