The Ordinary leads in perception of value and efficacy

This Vogue Business Beauty Index article is part of our Advanced Membership package. To enjoy unlimited access to The Long View from Vogue Business and bi-monthly Market Insights Reports and webinars, sign up for Advanced Membership here. This is one of the four chapters comprising the Vogue Business 2023 Beauty Index and should be read in conjunction with the others. Please use the table of contents below to navigate between the chapters of the Vogue Business Beauty Index. Key takeaways: Inflationary challenges could see over a third (35 per cent) of global consumers limit their beauty shopping frequency in the coming months, while 30 per cent will switch to cheaper products if prices continue to rise. Brands with strong price differentiation that still offer high quality could attract these consumers — and benefit when spending improves. Male beauty represents an important growing opportunity, with gender-neutral brands proving popular. Moisturisers, cleansers and fragrances are key gateway categories where male consumers shop in higher volumes. As economic conditions tighten in the West, brands should look to MENA and China, which are already thriving hubs for beauty. Engaging with market-specific beauty standards, especially in skincare where routines are often culturally ingrained, is the key to success. Navigating beauty’s evolving economics Today’s competitive beauty industry is characterised by a rising influx of new brands and celebrity-led beauty lines entering the market, each promising similar credentials, which weakens differentiation. As a result of this saturation, consumers are becoming overwhelmed with choices, while the rising cost of beauty sees some consumers contemplating cutbacks and seeking cheaper alternatives. In the UK alone, face moisturisers saw an 11 per cent rise in price, according to the British Beauty Council. The result is that it’s becoming harder to make a sale, and when shoppers do convert, their discretionary spending is tighter. Our global beauty sentiment survey shows that 35 per cent of consumers will reduce the frequency of their beauty purchases if the price of beauty products rises, while 30 per cent will buy less expensive products. It’s therefore unsurprising that beauty retail has become a more challenging market, seeing companies such as Farfetch closing down their beauty business due to slowing profits, while the rise of dupes, cheaper than their branded counterparts, has been predominant across both fashion and beauty. Brands and consumers alike are facing off the cost of a tougher economy. With these conditions expected to remain challenging for the foreseeable future, luxury brands should hone in on what consumers value the most in luxury players, with quality, experience, aesthetics and status all being areas where luxury index brands stand apart. So-called masstige brands manage to balance a level of luxury appeal with lower price points, giving them a competitive advantage during difficult economic periods. Another category gaining traction is dermo-cosmetic brands, which offer sophisticated skincare solutions with targeted active ingredients or clinically proven results. They often communicate additional value through links to emotional well-being as well as visible results. Examples of brands engaging in emotional well-being include Vyrao*, launched in 2021, which contains charged crystals within its fragrance bottles, said to be mood-boosting, while Tatcha’s Forest Awakening body skincare collection focuses on stress reduction in its marketing and pop-up events. In China, beauty brands have faced additional obstacles, with the extended Covid-19 lockdown in the market and prevailing US-China trade tensions, resulting in brands such as E.l.f and Huda Beauty exiting the market. As the market begins to recover, however, brands should not overlook China’s vast spending power, with Chinese consumers more resilient to inflationary rises. In fact, 13 per cent of consumers in the market say they would still switch to more expensive brands despite the price of goods rising, with luxury products remaining in high demand. The market outperformed global averages for the purchase intent of luxury brands such as Tatcha, Shiseido, Aesop and Byredo. As such, China remains a bright spot for luxury beauty moving forward. Breaking beauty’s gender boundaries Men’s beauty is booming, with an ever-growing variety of beauty products for men to choose from, attracting more male consumers to participate in beauty culture. Male celebrities are increasingly utilised as beauty brand ambassadors, such as diver Tom Daley for Rimmel London* and rapper A$AP Rocky for Fenty Beauty. Meanwhile, celebrities including musicians Usher, Ricky Martin and Niall Horan are reinforcing the normalisation of male beauty routines by sharing their own on social media. As this trend evolves, it also benefits from a level of diversity and representation in marketing that has taken decades to achieve in women’s beauty, accelerating the appeal of brands to different male consumer segments. Male consumers are increasingly becoming a dedicated audience for beauty brands. While fewer purchase beauty than females, those that do tend to purchase higher volumes across moisturisers, cleansers and fragrances. Seventy per cent of men surveyed had purchased three or more skincare products in the last six months, netting out just ahead of female respondents, at 67 per cent. However, messaging and marketing around male beauty brands remains both an art and a science. Compared to the women’s beauty market, where there is already higher awareness of products, ingredients and brand stories, brands typically zoom in on single USPs when it comes to marketing for male beauty. As such, average brand awareness in the index was 59 per cent for male consumers in comparison to 66 per cent for female consumers. We see that brands targeting male consumers serve an aesthetic purpose. For example, global music phenomenon Pharrell Williams’s gender-neutral skincare brand Humanrace* has leaned into more sustainable packaging with signature silhouettes, while other celebrity beauty lines such S’Able Labs* by Idris Elba aim for a subtle, understated look. This is smart marketing; while men are marginally more likely to claim they’re proud to display packaging from brands that offer men's ranges, they are more likely to purchase and advocate for gender-neutral brands. Male respondents assign an average score of 6.1/10 for purchase intent when it comes to brands offering men’s ranges. For gender-neutral brands, this comes ahead at 6.4/10. Meanwhile, brand advocacy leaps from 5.9/10 to 6.7/10, respectively. Additionally, they’re more willing to advocate for a brand if it champions diversity and caters to all gender identities. Rappers Bad Bunny and Lil Nas X are both examples of the noticeable shift in how celebrity men are abandoning gender constraints as they engage with beauty while also playing a role in educating male consumers on how to care better for their skin. Bad Bunny experiments with gender norms, wearing his hair in a mini-bouffant to the 2022 Met Gala, for instance, while Lil Nas X has worked with brands such as YSL Beauty* as an ambassador for their makeup collection as well as sharing his skincare routine through Fenty Beauty’s YouTube channel. This has also led to increased visibility in the media of male adoption of nail treatments and make-up, with many celebs favouring gender-neutral brands. Beauty today is more expansive and inclusive than ever, and there is clear evidence that products with a gender-neutral positioning have more potential to succeed amid an already saturated women’s beauty market. The rise of the Middle Eastern beauty market Currently, the Middle Eastern beauty industry is worth $46 billion, according to Euromonitor International, with a rising appetite for beauty, skincare and make-up products in the region. Nearly all (96 per cent) of Middle Eastern consumers have purchased skincare in the past six months, while 84 per cent have purchased colour cosmetics. Among the latter, more than 40 per cent of their most frequent product purchases are concealer, foundation, bronzer, blusher or highlighter lines and more than 30 per cent eyeshadow, eye liner, mascara and eyebrow pencils. The Middle East is a playground for beauty fans and brands alike. Dubai serves as the headquarters for Huda Kattan’s self-titled brand, Huda Beauty, which has grown rapidly to become a top player in the beauty industry. Kattan’s second brand Kayali*, a popular fragrance brand, is fast on the way to seeing similar success. Dubai is also the birthplace of Peacefull*, thriving on its reputation for cruelty-free skincare products. What’s more, loyalty to local brands is strong — 22 per cent of Middle Eastern consumers expect to buy Huda Beauty the next time they make a purchase compared to 16 per cent of consumers globally, highlighting the power of homegrown brands here. Qatar and UAE emerged in second and third as the markets with the highest average purchase intent across beauty index brands, coming just behind China. With the Middle Eastern beauty and personal care market set to reach $60 billion by 2025, according to Euromonitor International, brands would be remiss to overlook the Middle Eastern consumer. For global brands to benefit from the growth of this market, it’s vital that they represent local consumer tastes in their product offerings, formulations, marketing and depictions of beauty standards. Case study: The Ordinary’s value proposition Affordable luxury is a convoluted term, especially in the beauty world where brands are treated as a status symbol. Yet, the imitation market is fierce, while websites such as Skinskool succeed by matching the ingredients of market-leading products. Beauty consumers are happy to spend less if they believe quality and efficacy aren’t being compromised. This explains how The Ordinary has shot to the top as the most purchased brand across multiple regions, gender and products, with the brand also ranked top by consumers for quality and effectiveness. Similar to premium beauty rival Nars, The Ordinary has a global network of standalone stores and counters in premium department stores such as Selfridges and Nordstrom. It continues to expand its brick-and-mortar presence into spaces usually reserved for prestige brands — a tactic that has enabled it to achieve the allure of a luxury label without the hefty price tags. The Ordinary’s packaging includes a simple and transparent approach to product descriptions, offering customers clarity on benefits and uses as they choose between products. Its recent communications strategy has focused heavily on collaborations and influencer marketing. The Ordinary currently has 1.5 million followers on TikTok and its tagline reads, “Sensibly priced, science-proven skincare”. Its status as a global favourite across continents and genders has helped it to achieve the number one spot. The brand's appeal is simple: it successfully intersects a luxury feel with quality and affordability, allowing mass consumers to experience both emotional satisfaction and exceptional results. *Not included in the index ranking To receive the Vogue Business newsletter, sign up here. Comments, questions or feedback? Email us at feedback@voguebusiness.com. You can learn more about the Vogue Business Index and Advanced Membership here.

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