How Unilever Prestige Ensures Its Brands Stay Relevant

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A convergence of things is reworking what it takes to construct and preserve a profitable beauty model. Shoppers are extra knowledgeable than ever and development cycles proceed to speed up. New paths to buy are rising, creating difficult trade-offs in the place to take a position, whereas conversion charges drop because the dynamic between influencers and consumers evolves.

Concurrently, sourcing elements and sustaining well timed distribution methods and efficient logistics has change into more difficult as climate change-related disruption impacts international commerce networks. On this context, staying near customers and offering them with the precise merchandise and the precise time is tougher than ever.

To find how Unilever Prestige approaches staying related and the way it believes manufacturers ought to navigate difficult market circumstances to take action, BoF sat down with outgoing chief govt of Unilever Status, Vasiliki Petrou, at The Business of Beauty Global Beauty Forum 2024, held in Napa Valley, California. Unilever Status is without doubt one of the trade’s most revered strategic patrons and the chief of a 10-brand portfolio that features Tatcha, Hourglass, Dermalogica, Ren and the newest addition to the Prestige portfolio is science-led hair care brand K18, which sits on the intersection of premium magnificence and biotechnology.

Unilever Status’s model portfolio generated €1.4 billion in income in 2023, with 13 successive quarters of volume-led progress as much as Q1 2024. A few of its manufacturers having doubled (Tatcha) and even tripled (Hourglass) in turnover since becoming a member of Unilever. Now, BoF shares Petrou’s key insights from the International Magnificence Discussion board 2024.

Buyer segmentation ought to higher mirror id and pursuits

VP: There’s dialogue within the trade about breaking down classes and that’s a really true reflection of how people are procuring right now. One factor that’s key now’s: how do you execute viewers segmentation in a approach that’s knowledgeable by the needs of essentially the most related folks? We have to set up what their personalised pursuits are. What are the approach to life preferences that matter most? What are these tremendous personalised pursuits that may be scaled.

As a result of whenever you go very area of interest, typically it’s not large enough, so you will have one other challenge. However for those who can scale a “area of interest of niches” when it comes to a cultural zeitgeist, then section, I believe you might be onto one thing there. We are actually on the level the place we’re asking, how do you do viewers segmentation in line with the zeitgeist?

Genuine model id ought to inform engagement methods

VP: All the pieces you do must be in tandem together with your authenticity as a model. It’s essential to leverage the strengths of the retailers and manifest your self in the best way that your audiences count on to see you. Some folks will probably be good at providers and consultations, others in training or pace of supply.

I at all times encourage our leaders to play whereas bringing your distinctive energy to our retailers and the customers. It must be not solely a twin win, for manufacturers and retailers, however a triple win: for manufacturers, retailers and customers. If you happen to go together with your genuine self and attempt to serve your viewers finest by leveraging the related channel technique related, that’s the way you connect with your neighborhood.

Advertising methods ought to embrace the evolution of affect

VP: Era Z are altering how they eat magnificence and they’re turning into a much bigger a part of it. Then you will have the Gen X and the Child Boomers which have been uncared for to some extent. I’m at the moment obsessive about every aspect of staying related, as a result of every thing is altering so quick.

The media retains fragmenting and the influencer and micro-influencer scene is consistently altering. We have now at all times talked about neighborhood, however I believe neighborhood is taking a brand new form. It goes past the wants of my pores and skin, the precise colors or a hair diagnostic — it’s very a lot understanding life-style, anticipating wants. It’s personalisation to the following degree.

If you happen to go together with your genuine self and attempt to serve your viewers finest by leveraging the related channel technique, that’s the way you connect with your neighborhood.

All of us should be continuously re-inventing ourselves. Right this moment, manufacturers should be like a life associate, a coach, a pal. It’s a multi-phase, long-term partnership. The usual is more and more excessive when it comes to how nicely you perceive your neighborhood’s wants, how particularly you’ll be able to discuss to them and be there for them. It’s not straightforward to do, however I believe the manufacturers that spend money on doing this nicely would be the ones who profit.

Infrastructure and elements should evolve to match shopper want

VP: We’re positively trying to onshore lots of packaging materials items subsequent to the locations the place we manufacture the product. It’s a multidimensional subject — for those who take a look at it from an elements viewpoint, then might be difficult. It’s essential to assess totally different segments of customers.

Some need clear magnificence, whereas others are driving an enormous motion targeted on effectiveness. The extra you play with new retinoid supplies, for instance, the extra it is advisable to lean into biochemistry and artificial biology. There’s a regulatory framework that it is advisable to adjust to — it’s not straightforward, however it retains it thrilling.

When I’m taking a look at any potential acquisition, the primary query I ask myself is: ‘Is it going to be round in 10 to fifteen years from now?’

We’re experimenting fairly a bit proper now with glass packaging and [replaceable] cartridges you can take out and in. Clearly, the patron must tempo that as nicely. That is the place retailers may also assist.

Lengthy-term relevance is inconsistent with short-term founders

VP: When I’m taking a look at any potential acquisition, the primary query I ask myself is: “Is that this model going to be round in 10 to fifteen years from now?” That is the multi-billion-dollar query. If a founder says they plan to exit in 4 years, this wouldn’t work for our mannequin. If [a founder has] that mind set, it’s going to push [them] to make the improper strikes when it comes to short-term ways, like distribution that’s too broad too shortly.

You must at all times be targeted on: “How can I be certain my model goes to exist for the following 30 years?” If in case you have that mindset, then you definately’re going to make the precise steps. If you consider Dermalogica and the continual upskilling and coaching that we do with their skilled skincare therapists, I don’t suppose [the founder, Jane Wurwand] thought: “I’m going to do that as a result of I’m going to promote.” She thought: “How can I serve them one of the simplest ways?”

In case your mindset is “I’m right here for a fast exit,” I don’t suppose you’re going to succeed.

This interview has been edited and condensed for readability. On the time of the interview, on June 4 2024 on the International Magnificence Discussion board, Visiliki Petrou held the place of CEO at Unilever Status. She has since introduced her departure from the position, efficient finish July 2024.

This can be a sponsored characteristic paid for by Unilever Status as a part of a BoF partnership.