Category: Cross-border

Sell, sell and sell. If it’s not obvious enough, making a sale of either a service or a product is what companies need to do to stay in business.  Change is constant and when the pandemic hit, the usual brick-and-mortar stores had to step back from the limelight. Online was the buzzword. The beauty industry had to adapt and one of the most popular ways it did was via Direct to Customer (DTC) selling.  

Direct to Consumer beauty brands are nothing new. One notable example is Fenty Beauty which made Rihanna not just one of the most popular pop icons of our time but also the owner of one of the most sought-after and successful beauty brands.  Like any other business model, companies need to set themselves apart. There are a ton of categories that could be considered but, in this article, we’ll be covering why diversity and inclusion should be an itinerary for anyone wanting to succeed in the beauty DTC space.

What do they mean?

Before we go any deeper, we must ensure we understand what they mean.

The simplest way to remember them is that Diversity refers to traits and characteristics that differentiate a person from another while Inclusion refers to a sense of behaviors and social norms that makes one feel welcome.  2 very important things to the target audience – The Gen Zs and Gen Ys.

The Customer

Gen Zs and Gen Ys make up most of the target audience. It has been confirmed that Gen Zs are the decision-makers regarding purchases while Gen Ys tend to listen more to recommendations. Gen Zs define the trend. They want to be part of something and be unique enough to stand out. This is why DTCs are popular because they are able to provide what Gen Zs need the most, attention.

Diversity and Inclusion

The main advantage of a DTC approach is that the sellers get to know the customer firsthand. There is no middleman in between and thus a relationship is easier to form as they sell directly to the customer.

In a 2016 survey, 70% of Black women confirmed that big-name beauty product companies are not meeting their needs. Though it is changing, for a long period of time, the majority of sold cosmetic shades for example are that of the lighter type. Diversity has been in the spotlight for some time now and it would be a waste for Beauty companies to neglect it.

Since DTCs can listen to customer feedback more effectively they are able to fill this gap much sooner. One fine example is MDM Flow. A make-up company that was built by Florence Adepoju saw how limited the options for dark-skinned women such as herself are while working on a major beauty brand’s makeup counter. She was able to start her business by the simple fact that she listened.

DTCs also benefit from a close-knit connection with customers because it fosters brand loyalty. Remember how Gen Zs yearn to be part of something? DTCs can fill this need by building a community of people who enjoy their brand. Beauty companies should also be segmenting consumers holistically by interests, style, and location demographics. The best way to keep someone interested in something is to make sure he is not alone. Inclusivity is key 

TL: DR

Inclusion and Diversity are in. If you want to successfully build your business, make sure you take notes.

You wouldn’t want to be left behind, would you?

Gen-Z consumers have higher asks from brands in general. It is no longer enough that a product or service works well for it is now also vital that the brands they support are both civically & socially responsible, eco-friendly, both inclusive, and diverse, just to name a few. 

It is also for these reasons that DTC brands are being driven by this generation. Because the direct-to-consumer business model allows its customers to build relationships directly with the brands, the customers are being given the opportunity to get a very close look at the brands’ operations, call out what they don’t like, and applaud what they love on social media. 

Sustainability is Key for the Gen Z

In April 2021, Forbes Magazine labeled Generation Z as the sustainable generation. It is the generation where 73% are willing to shell out more cash to purchase products that are sustainable. 

As the “inheritors of the Earth”, it makes a lot of sense why Gen Zs are very concerned about the environment. Adding to the fact that the oldest of their generation has turned 25 this year, Gen Zs are now emerging into young adults who have started to contribute to the workforce and the economy all the while carrying with them their commitment to sustainability– their choices to cut down on consumption, reducing their carbon footprint, their support to small and local businesses, their pride in thrifting, among other decisions to put the planet first like no other older generations every did. 

At this point, it only makes sense that brands must make their moves to shift to the sustainability route if they haven’t yet. Aside from the fact that it’s a wise move to take in order to stay relevant and profitable in the years to come, but also because the Gen Zs have also shown to influence not just their generation but even the older ones. As a result of Gen Z’s influence over their Gen X parents on the issue of sustainability, Gen X consumers’ preference to shop for sustainable brands increased by 24 percent, and their willingness to pay more for sustainable products increased by 32% percent since 2019.  

Furthermore, as of this writing, a research conducted by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania shows that nearly 90% of Gen X consumers said that they would be willing to spend 10 percent extra or more for sustainable products, compared to just over 42% two years ago.

The Race in Offering Affordable Price Points

Gen Zs are becoming known to be the faster ones to acclimate and adjust to situations presented to them. Also known as the generation to quickly learn from the past mistakes of previous generations, they are much wiser when it comes to their spending habits. 

Gen Zs witnessed their Gen X parents struggle with the Great Recession and are still seeing the Millenials work very hard to pay off their student loans. With both of these in mind, the Gen Zs perception of money has been shaped. 

While previously mentioned that Gen Zs are willing to pay more for sustainable products, it does not mean that they are willing to spend a lot of money on things just because. Their requirements for sustainability are heavily charged on the fact that they want to get their money’s worth. More than just getting their desired function of a product or service, the justification of their purchases also encompasses the values they deeply care about such as the impact of the brands they support on nature and other people’s well-being. 

These factors in mind pose the challenge of offering sustainable products at affordable price points. 

Emerging DTC beauty brands are now starting to circulate in the eCommerce market and the consumers are welcoming them with incredible hype case in point is the beauty brand FieldTrip by Edgewell which boasts about their luxury formulation at an affordable price point. 

Edgewell has only launched the brand this early this month and everyone in the beauty space has already been raving about it. 

Is it really that difficult to be sustainable and affordable at the same time?

Now that a couple of brands are causing a major disruption in the beauty industry, time can only tell if the rest will follow suit. As of this writing, one of the most popular affordable beauty brands The Ordinary by Estee Lauder has always been transparent that while they are very affordable, they are still not considered sustainable but they have ongoing initiatives that are geared towards becoming a sustainable brand.