In the face of inflation and an impending recession, consumers are increasingly cautious with money. But that doesn’t mean they won’t buy or try new brands, products or innovative packaging solutions.
Earlier this year, NielsenIQ released its global Brand Balancing Act report, revealing that only 6% of global consumers surveyed were unwilling to try something new. The survey also found that 25% of the surveyed consumers had purchased a new brand because of its attractive or unique packaging.
Those findings should give emerging brands in the beauty category a big sigh of relief. Perhaps no other category pushes the boundaries of innovation in packaging, diversity, and sustainability than the beauty and personal care space. Emerging brands, in particular, leverage these strategies to make their mark on hearts, minds and wallets.
Another study by NielsenIQ, the State of the Beauty Industry, found that online searches for “plastic-free beauty products” grew 900% in 2021. Consumers are clearly seeking out innovation in this area, and emerging brands have an opportunity to step up and deliver.
Packaging As a Pillar to Scale Business Growth and Sales
While there's no straightforward path to widespread retail distribution for emerging brands in the beauty and personal care space, there are some proven strategies to increase sales opportunities and expansion. Packaging innovation is one of them.NielsenIQ’s 2022 Brand Balancing Act looked at how global consumers perceived emerging brands vs. larger, national brand counterparts. The report studied the behaviors of consumers who only buy small brands, those who only buy national brands or are brand-agnostic, and who buy small brands when convenient.
More than half of the consumers surveyed said they are buying a greater variety of brands than before the pandemic, and even more (67%) said if they look hard enough, they can find a brand that fits their exact needs.
After studying what drives a diverse global consumer base to purchase different types of brands, the report landed on four “bases” that emerging brands can focus on looking to scale their business:
1. Learn Consumer Preferences
Emerging brands should start by uncovering opportunities among consumer preferences and digging into data that highlights what’s trending among consumers. For example, in beauty, portable products are gaining consumer preference, as well as airless packaging, such as bottles and jars with pumps that keep air from contacting the product. Flexible packaging is also a growing trend as consumers look for better protection for what they buy.2. Study Global Performance
Using data platforms such as Byzzer can break down what brands, emerging and national, as well as what attributes, products, and packaging types are setting the pace for growth within the beauty category. This is also a way of creating a global benchmark for growth. A beauty brand might uncover that plastic-free products are setting the pace of change and understand the direction it needs to take with its own packaging to meet that benchmark.3. Establish Trends That Can Lead to Scale
Emerging brands can next look at relevant data to help compare which trends are staying within niche growth or those leading toward growth among mainstream shoppers. The Brand Balancing Act report found that of the shoppers who only buy small brands, 15% purchase smaller pack sizes to save money. Emerging brands can tighten up pack sizes to potentially meet new small-brand buyers.Specific to beauty packaging, some consumers also seek reusable packaging. Accurate data could reveal whether there’s potential in developing that packaging type to grow scale or hit niche segments.
4. Innovate and Develop Differentiation
Using performance data, trend information and more, emerging brands can create a signature style or develop an innovation that stands as a hallmark for the brand. An emerging beauty brand that studies the entire category and market to understand the trends driving growth (and develops a unique packaging style or offering as the outcome) has a much better chance at growing scale.For emerging brands in beauty, success in the year ahead will be driven not by “being better” than competitors but by “being different” in today’s diverse marketplace. Some of the smallest brands have already succeeded by boldly positioning their products through alignment to specific cause-related or transformative values, for example.
More than ever, consumers are looking for products that meet their lifestyles, values and budgets. By leveraging data to understand key behavior preferences and pinpoint areas to refine their packaging and product attributes to fit evolving market needs, emerging brands can grow scale and drive sales success in the year ahead.