Carrousel du Louvre Paris June 9-10

JUNE10,2016
CarrouselduLouvreParis
June9-10
OurkeytakeawaysfromtheMakeUpinParis2016eventinclude:
• Gen Y and Gen Z look for different things in beauty retail: the
formerenjoyssalon-typeexperiences,whilethelatterlooksfor
digitalizationandlowprices.
• Customization of products or packaging can strengthen
consumers’emotionalconnectionswithbrandsthroughasense
ofsharedexperienceorculturalconnection.
• In 2015, e-commerce accounted for 19% of beauty sales in
China—but only 11% of sales in the US, 7% in Western Europe
and7%intheAsia-PacificregionexcludingChina.
• The online channel is disproportionately about research and
browsing, while physical stores are more about the experience
than ever, and e-commerce is a diverse channel with distinct
opportunities.
TheFungGlobalRetail&TechnologyTeamattendedMakeUpinParis
2016 on June 9 and 10 at the Carrousel du Louvre. The event is a
showcase for the beauty industry in Europe, and it included a
conferenceprogramonbeautycategoriesandretailing.Hereareour
key takeaways from selected conference presentations and from our
10topdigitalbeautytrendsanddisruptorspresentedbyJohnMercer,
SeniorAnalystatFungGlobalRetail&Technology.
GenYandGenZLookforDifferentThings
Pauline Bonafous, Marketing Project
Manager at communications agency
Carlin International, noted some key
differences in the preferences of
Generation Y (or millennials, born
between 1980 and 2000) and
GenerationZ(bornafter2000):
• Gen Y wants everyday, natural
well-being. They visit salons
frequently and they like sensorial
experiences and customized
advice. As a group, they are well
informed and look for proof or
transparency when choosing
products. In France, their favorite
beautyretailbrandisSephora.
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
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JUNE10,2016
• GenZismoredigitallyengagedasagroup,andturnstoblogsand
YouTubeforbeautyadvice.Theyappreciatedigitalizedstores,and
theywantlowprices.InFrance,theirfavoritebeautyretailbrandis
KIKO.
CustomizationHelpsBrandsDeepenConnectionswithConsumers
Françoise Dassetto, Founder and CEO of branding agency Eferday,
noted the importance of customizing products or packaging in order
to strengthen brands, and showcased some examples of successful
customization through packaging and product innovations. She
highlighted Chanel’s summer-themed eye shadow—which came in
short-lived, limited-edition packs—and Estée Lauder’s specially
designedChineseNewYearpackaging,whichthecompanycreatedin
ordertocatertoaspecificlocalmarket.Thiskindofcustomizationcan
strengthen consumers’ emotional connections with brands through
either a sense of shared experience or cultural connection. Dassetto
concluded that customization projects should be underpinned by
threecoreobjectives:
• Theymustbecoherentandconsistentwiththeproduct,brandand
objectives.
• They should surprise people, as that is the best way to appeal to
customers.
• They must enhance the storytelling of the brand, and become a
newchapterinabrand’sbook.
ChinaHasaSubstantialLeadinBeautyE-Commerce
Laurence-AnneParent,SeniorPartneratconsultingfirmAdvancy,ran
through key statistics on the growth of e-commerce in the beauty
industry,andnotedtheleadChinaenjoysinthischannel.Amongthe
numbersParentsetoutwere:
• In2015,e-commerceaccountedfor19%ofbeautysalesinChina—
butonly11%ofsalesintheUS,7%inWesternEuropeand7%in
theAsia-PacificregionexcludingChina.
• TheAsia-Pacificregionnowaccountsforaround47%ofworldwide
onlinebeautysales.
• In2015,8%ofglobalbeautysalesweremadeonline;by2020,this
shouldbe10.4%.
TenDigitalBeautyTrends
John Mercer, Senior Analyst at Fung Global Retail & Technology,
presentedour10topdigitalbeautytrendsanddisruptors.Hegrouped
thetrendsunderthreethemes:onlineresearch,in-storeexperiences
and e-commerce. We outline these three themes and 10 trends
below.
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
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JUNE10,2016
I. The online channel is disproportionately about research and
browsing:
1. Mobileappshavebroughtscientificskinanalysisontoconsumers’
smartphones.
2. Incontrast,socialmedia(notablyYouTube)bringsamorehuman
elementtoonlineinformationaboutbeautyproducts.
II. Physicalstoresaremoreabouttheexperiencethaneverbefore:
3. Digital stores, such as Sephora Flash, are bringing online-style
informationandexperiencesintophysicalretail.
4. Magicmirrorshavefinallystartedtobedeployedinretailing,but
theyneedtoofferanexperiencethatisatleastasgoodastesting
productsinperson.
5. Wearabletechand3Dprintingofferpossibilities,and3Dprinting
mayeventuallyallowretailerstooperatewithzeroinventory.
6. Appsandonlineservicesareconsolidatingthefragmentedbeauty
servicesmarket.
7. By using smartphones in-store, shoppers are digitalizing stores
morethanretailersare.
III. E-commerceisadiversechannelwithdistinctopportunities:
8. Subscription services cater to routine, “chore” beauty purchases
aswellastoexperimentationandtrial.
9. E-commerceisabrightspotinanotherwiseslowluxurymarket.
10. OnlinegroceryissetformajorgrowthintheUS,andmass-market
beauty brands will shift online as part of consumers’ regular
groceryshopping.
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
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JUNE10,2016
DeborahWeinswig,CPA
ManagingDirector
FungGlobalRetail&Technology
NewYork:917.655.6790
HongKong:852.6119.1779
China:86.186.1420.3016
[email protected]
JohnMercer
SeniorAnalyst
HONGKONG:
10thFloor,LiFungTower
888CheungShaWanRoad,Kowloon
HongKong
Tel:85223002470
LONDON:
242-246MaryleboneRoad
London,NW16JQ
UnitedKingdom
Tel:44(0)2076168988
NEWYORK:
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1359Broadway,9 Floor
NewYork,NY10018
Tel:6468397017
FBICGROUP.COM
DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&TECHNOLOGY
[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016
Copyright©2016TheFungGroup.Allrightsreserved.
4