Established Beauty Brands Evolving To Fight Fast-Growing Indie Brands

In its report, “Digital IQ Index: Beauty US 2016”, L2 highlights efforts beauty brands are making to keep pace with competition from indie brands, which have been able to compete with established brands where barriers to entry have been lowered by social media and e-tailers, such as Amazon. Brands like Anastasia Beverly Hills have seen rapid growth and have reinvested profits to bolster their direct-to-consumer sales channel. They are increasingly becoming acquisition targets for larger beauty companies fighting an “arms race.” Recent deals include Estée Lauder’s acquisition of BECCA Cosmetics and Too Faced, and L’Oréal’s grab for IT Cosmetics. L2 also says that Masstige beauty brands are learning from fast fashion brands, and are disrupting the beauty scene by being first to market trending products, supported by strong merchandising, and some alike NYX and e.l.f. Cosmetics are opening physical stores. 2016’s Digital IQ Index® benchmarks 99 beauty brands. L’Oréal’s Urban Decay came top, followed by Benefit from the LVMH stable, and then two more L’Oréal brands, Maybelline and Lancôme. L’Oréal featured twice more in the top 10, with L’Oréal Paris and Kiehl’s.