Beauty in 2018: Indie or Legacy? I don’t think we’re in Kansas anymore…

Beauty in 2018: Indie or Legacy? I don’t think we’re in Kansas anymore…

Fenty, Charlotte Tilbury, Huda Beauty, Kylie Cosmetics, Pat McGrath, Kat Von D, Drunk Elephant – the biggest beauty brands in 2018 (by sales growth and column inches) aren’t owned by the likes of L’Oréal and Lauder anymore, Toto.

Indeed, the last 12 months have seen a series of Indies make the big time, and that’s left the legacy brands playing catch up – no wonder we’ve seen some of the traditional brands out there falter and sales dip. While Pat McGrath was celebrating hitting billion-dollar status, Avon and Revlon were ushering in cost-savings and rescue plans. That’s quite the contrast.

I guess the first question on everyone’s lips is: what are these Indies doing right? And one thing is clear, that Indie brands have mastered the magic formula that lures in millennial shoppers – see our Consumer Insight videos if you want to nail it too. Social media fluent, they can build huge audiences overnight, crucially audiences that are comfortable with the concept of ‘click to buy’ – many of them don’t even have a physical presence or rather, like Kylie Cosmetics, that comes later.

Some take it one step further and are shaped by a community – Glossier being the prime example. Drunk Elephant Founder Tiffany Masterson also claims that she uses social media to refine her products and gauge demand. ‘Is there a better place to get my feedback, to learn new things, to be questioned, to be challenged… To connect with my consumer?’ she asked Fashionista. The brand’s Founder is approachable, available, vocal – and customers like it. It feels personal in a way that a corporation just can’t.

But it’s not just that – Indie brands are taking all the credit for creativity too. Although going by L’Oréal’s IP challenge to Drunk Elephant’s C-Firma serum, it’s not always justified. “There is a continual race to be the first to do something and get it on the market as soon as possible, which is born out of smaller Indie brands that have the flexibility to do new and interesting things,” Sarah Jinal, Senior Global Analyst at Mintel told The Guardian earlier this year. Approachability and agility – those are the cornerstones of the Indies’ success.

But there’s another big elephant in the room (not the drunken one) – and that’s who these brands are reaching. Because, ultimately, the new labels on the block aren’t just stealing custom from legacy (if they were, then L’Oréal and Estee Lauder’s results would have suffered, when they patently haven’t), they are meeting a gap in the market. As Charlotte Tilbury puts it, she was incentivised to set up her brand after discovering research conducted by Harvard University that showed some 50 percent of women don’t engage with make-up at all. Other Indies, such as Fenty or Iman Cosmetics are resonating with women of color in ways, for all the inclusivity campaigns we’ve seen this year, the big brands just aren’t – however many shades they have in their arsenal – something we discussed at length in our diversity podcast in July. Authenticity, agility and approachability. It’s a triple ‘A’ any way you look at it.

It’s no wonder the legacy camp are establishing incubators left, right and center – not to mention making key, senior M&A hires. Shiseido, L’Oréal, we’re looking at you. After all, if you can’t beat ‘em, buy em. And that’s happening too – this year Lime Crime has been snapped up by Tengram and Unilever Ventures has invested in Beauty Bakerie, for example.

But when these Indie brands are so successful, can we really consider them Indie at all? Certainly, if we borrow a definition from Medium – Indie brands should be independently funded, purpose driven, design conscious, small batch and market via non-traditional channels (Spotify, anyone?) – then Kat Von D and Fenty (and stablemates Bite Beauty, Marc Jacobs and Ole Henriksen), with LVMH-backed Kendo behind them, are out. And with Eurazeo Brands bought on as a minority investor in Pat McGrath Labs, so is the make-up artist’s billion-dollar brand while Drunk Elephant is now funded by a series of private equity firms, including VMG Partners. Which leaves, well, Kylie Cosmetics – and, to be fair, Kylie Jenner is essentially her own seed round.

So when does an Indie brand become too big to be an Indie brand? After all, MAC was Indie once upon a time. Where is the line? Answers below please