I'm David Brown, and this is business wars This is happening. Seven and the conclusion of our series on Este Lauder versus lorry out these two I have dominated the make up in beauty industry for more than fifty years during their rain. Consumers gravitated toward their high end legacy products and they were willing to pay big bucks for the brand name. but now we are seeing a new wave of competitors challenging these titans of industry, smaller

and that are getting attention from the taste makers of the twenty first century beauty. Influencers, What's driving the shift from big name to boutique brands, and how will a historically white industry adapt to new generation of consumers hungry for diversity. From well. I'm chatting with Arabella Security Security is about the beauty industry for over a decade, working as an editor strategist and trend forecaster are currently writing a book about beauty and political power. The house of beauty will discuss the future prospects of the make up industry and how lorry Alan Este Lauder may well be relics of the past. All that is coming up, with no fees or minimums on checking and savings accounts banking with. Capital one is the easiest decision in the history of decisions, cut choosing to listen to another episode of your favorite podcast and with it

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Arabella security welcomed business wars, sketchy bigger, it's great to have you, you know, begin by talking about these two players that both sort of have humble origin stories, both Lorry Alan S, day, Lauder, going on become establishment brands that well. by and large shape the future of make up in beauty at least is we ve known it for many years, but in recent years were seeing some new players enter the market, tell us a little bit more about some of the brands that you ve known, then, and what seems to be going on now in the industry. Well, there has been a huge rise of the direct consumer brands. Will acronym them. Did he see so you have a rise not only direct consumer brands, but brands run by and founded by women of color, which I think is a really welcome change in

industry and something that's been a long time coming. This is really interesting, because the landscape, the sort of the playing field in a sense for how causes Dixon and beauty item brands are marketed, is really Sort of turned upside down- and we once upon a time but was word of mouth I guess in a way we sort of going back to the future. Aren't we I mean, because these are their marketing to individuals, individuals who will spread the word and it sort of builds up sort of from the ground up. It sounds like yet that's a good way to put it actually it's been really interesting to see the priorities of consumer, so rapidly change. I mean we have seen in the last year in the pandemic, by in person retail, not really a thing anymore, and people are buying more and more online and

Rather than going to specific retailers, they may be most influenced by Tik Tok influencers themselves or going directly to brands, often through Instagram and other social media platforms. So the way people are shopping is rapidly changing. I didn't you can already see that reflected in the numbers for big brands and small brands, when you would expect that everyone would be suffering in the pandemic. They've still been able to turn a profit and grow question news, though, with so many influencers? How does a brand blight As a lawyer or Laurie, I shall remain relevant, especially when it's hard to know which influencers going to were gonna work best for the brand. How pick out. Your influencers, I suppose, is what I'm asking If you are a company like Esther Loader lorry out. That is a very good. An expensive question? People get paid, just

navigate and a lot of the times. They do subcontract that we outrage really to social media agencies. I've been outraged to brands as an influence her through, a middle person as well as through brands directly? So it's really about figuring out how you want to do it if you want to have a dedicated department and if you're in a large brand to do that, gonna do the outreach for it. So we have customers thither pushing the envelope when it comes to the future of the industry, you have shifting sensibilities and the culture you have growing awareness of the impact these companies have on our culture and on the environment and on society at large. You have youth generation, which is obviously critical too industry like beauty but ultimately,

the successes off engaged by the numbers. Right I mean how's business innocence. How do you track HU. The winners and losers are on this new playing field. Well, it's lucky that since Laurel and as the latter are actually on the stock market, you can actually monitor their success and their annual reports are pretty transparent about what categories Are succeeding for them and which ones are falling and the Laurel senior management has said they were losing percentage of their profits to what they called local players, which is to say direct consumer brands and brands that weren't their initial competition. That weren't part of like the big three conglomerates that we know of and it's only got in more of a star well for the main conglomerates to retain power which

why they ve also been ramping up their acquisitions in the past couple fears and, ultimately, the competition between Revlon Este lottery is really about. Who can they acquire that wall maximize their growth, the fast and for the longest term I assume lorry, alum and water are still giants in the field, but curious. Is there any way of knowing authoritatively, of course, which, these smaller brands pose the greatest threat to some of the giants. Honestly, it's really hard. because a lot of the animal ex firms and a lot of these ways and to reporters at least are able to gauge the numbers they don't always include, direct, consumer brands in those numbers and they're not publicly traded. So we can't

no, how well they're doing unless they release that information and their farmer likely to create a narrative of high demand and also scarcity to help create evaluation and create hype so that their business does increase in profits, and so they become valuable, but I can't even say accurately how well these companies are due being unless there, in a conversation to get venture capital funding like we know the evaluation of glossy aid, which is a very important small brand, but smaller Brandon comparison because they have gone through rounds of VC funding and they have gone number it is calculated that represents how much money there valued for you know of a company is stopped Walmart or target or sufferer

alter their profits from going from an online only store to a big box retailer product. It kin. Increase their revenues by like two hundred percent can Africans or more if they can scale up properly by then there's no honest on them to release their numbers to the public. The way there there's an onus for loyal and a state to do so, because those are publicly traded companies and if you have any investment in them whatsoever. You are obligated to that knowledge if the Is actually making beauty more accessible to consumers or, if you're talking about right that are most accessible to every day. Folks you're talking about still Aren't you the Walmart of this world or the CBS Drug stores of this world, where people you need some you're gonna go and hid it and it's gonna be inexpensive right, exactly

and we ve seen huge brands completely pivot, vair retail strategy in the past six or eight months to try and get back in to see the drug store or into target, because these places categorized as essential businesses in a way that say, like a department store which would obviously stock. and luxury brains and they're they're not open and people aren't shopping for that stuff, but they're going to be shopping for toilet paper and they're gonna pick up mascara along the way, if it's there, because it'll make them feel better, so a lot of brands are trying to get into this mass market space, not only because there's way more money to be made because there's more consumers, I can afford that. Then you know of fifty dollar foundation, but it's so because that's where they're going to live their lives. Even though there has been such a change in the industry, it sounds like. Basically, the real battles are too.

it into those spaces where there's a mass distribution model and also costs are Many we're not talking about hugely expensive products here where not day. You know, YE exclusivity used to be part of the selling price vision for some of these beauty products. But you're talking about increasing accessibility, you gotta, keep. the price slow and you gotta have in a place where it's gonna be available yet, and eyes of small brands has been skyrocketing because a lot of the most popular ones, for example the ordinary therein, Higher marketing strategy is to be accessible and transparent, with a very educated consumer, so the rises, the ordinary it happens in like three to four years

I would say it: people that love user who read it first, concur advice. They hyped up this, this product line and it spread on the internet and end up being stalked in drug stores, rather than you know, just being a mid range or high and experience you can get really high quality exponents ends, see rooms and, like special team, scan care products at like ten dollars, as opposed to you. No seventy right so that made everyone freak out and it completely up ended the market. Because now you have really strong company competitions from dupes, whereas before you had comparable products by you may not have been able to get them necessarily at sea.

other drugstore location wrote right. So it drove the demand for cheaper products to a point where people how to change their marketing strategies and come up with new ways to sell their products. Business wars is supported by a Valera. You know, collecting sales tax for the government is something businesses just have to do? A Valera knows that They also know that getting the job done efficiently and correctly can be an a double challenge, because tax rules and regulations can be endlessly complicated. Here's an example if you buy deodorant in Texas, you're gonna get charged sales tax, but not if you buy anti perspiring, who would know this stuff turns out ABBA Lira does because they keep track of health, thousands upon thousands of products are taxed in more than thirty. thousand tax jurisdictions across the I did stage apple errors, Loud based solution helps ease this burden for business,

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we ve seen the effects of that, of course, limited shades of foundation for people of color beauty products geared toward black women being locked. bit stores. I mean this is stuff that that that's happened in it's been applied. Of that. The story of the industry, Did you notice this lack of inclusion in the beauty industry Gore growing up as a person of color definitely ends rage at. It is part of why I started writing about beauty and, till the foundation of why. I find beauty interesting, because it can be hard for people to articulate politics and people can get frustrated about not knowing the right words or not knowing enough about theory and and I like that. But everyone has feelings about their body and how people perceive it. Everyone has an investment in going out ways to be safer and a public space or to be more desirable in a public space and

shapes our lives, so everyone's invested in beauty in a political way. That's exactly I stole lovely, this freedom interested in it, because it's so tied to everything else in the world that's interesting because you ve been working on this work for ten years now over. This is cool. of the ten years. Would you say the industry has changed in it a big way, or is it just the marketing of the industry? That's seems to have changed. I mean years is a long time. I would say: it has had really significant change. and a lot of those significant changes have happened. Just in the last two years, you have players lay Obama beauty coming out. You have the rise of Pat Mcgrath and her impeccable line of duty products. and you just you- have more founders

beauty brands bad, are people of color and you know Ryanair. She changed the game and a lot of ways. The fancy effect it reshaped. Why customers expect in demanded of the industry and legitimized investing in a bigger showed range, because the numbers proved out. There is an example of long com, they had looked, ten years ago as their spokesperson, but they had you invent a new shared for her for the campaign because they didn't have a shade darkened lastly, in their line, and they had their black chemist work on shade range. She was an initially given the resources she needed to create this product, but then she did and then it became a spin of inclusive iii by it. It kind of put the carpet

or the horse? You know what I mean like they should have already had that, or do you think that when you get to the boardroom level, though, that these brain Funds are really interested in creating this sort over inclusive the diversity and equity that a lot of their customers seem to be caught. For I mean it's one you can provide lip service, you can create the optics right. But what is your sense about? What's happening actually in the board rooms of some of these, especially larger players in cosmetics and beauty industry as well I think that we have to see what they do on a long term basis and from knowing the history of these brand

I am not expecting revolutionary changes immediately. You're not! I am not. I think that it's not enough to hire you. No more people of color threw out of retail environment. It matters a few choose a person of colored too at a senior level and a person colored to be management, there's still a ceiling for black latina asian women in these spaces and donating a couple of million dollars to a non political entity? Isn't it

same thing as creating a space where you're workers from your retail employees trigger senior management and you're scenarios, but ultimately the people that are powerful to feel safe enough to offer critique and to help create the change that they need to see happen and to feel safe and supported in that change, so they have to create an dismantle and environment at the same time, an that's hard work. So do I think that there is going to be? You know, evolutionary change in the next six months or a year, not necessarily do I think that incremental change is happening and that these companies, the people within them, are capable of surprise the improving the wrong. I think that to rule on a better or more perfect world, what would diversity and equity actually look like paint that picture? If you would what is

a more diverse, more equitable, in fact, ideal situation, look like for the car medics in beauty industry, as you see, while there would be far more black asian latina found. There's on these huge successful lists. There would be more money and network and power dedicated to people that have been marginalized, their entire lives. There are given more shelf space at these Big Box, doors and luxury gets there's, not only more diversity and authentic storytelling and campaigns, but the people that are part of crew

Those campaigns are also diverse and also have equity in the community, because it's not enough to just cast someone. You have to have people part of the process from the very beginning, more dermatologists of color, more as petitions of color, more cosmetic chemists of color. We would have more systematic change and who gets represented, who products can be for and what the stories of those products can look like

So there needs to be more of those opportunities and investment and less virtue signalling about understanding people's pain, because we may never understand each other's pain, but we can hold space for that. So more shelf space, more diversity of brands and offerings enough launch us brands for or founded by March lies people, it's also the accessibility of the packaging. So people of different physical capabilities can participate in the beauty industry, because the disabled community isn't really spoken to a considered and beauty, marketing or beauty products at all and their incredibly underserved rebuild you ve. Also her jobs is trimmed forecaster. I know crystal balls can sometimes be a little cloudy. What friends can you forecasts about? make up skin care. The parts of the industry that we ve been talking about. I mean: how do you see it coming together in

I'd say a timetable of the next? Oh I don't five years. Where do you see it? Well, I think risk gonna be dealing with. The effects of the pandemic. Reshaping Roma only the supply chain by retailers, this is, and the product categories that our popular there may be. Bid switch backs when, when we're living in a post vaccine world, but for now we're going to see a lot of investment and interest in the skin care market and in products like mascara and skin care tools and males and more things that you can do at home, like at home, leading treatments because most people, I'm are not going two salon spaces or spas right now, and they won't be for a while so we're going to see that reflected in the trends, ends that

Gonna be true. I think, for the next two years now make up will probably come back with a complete vengeance in three years: But I think it has a lot to do with how we're gonna be dealing with wearing masks. the future. The reason why false eyelashes and mascara ambrogio Doing really good as product categories for brands is because those are the things that people still wearing run a go outside IRAN, that's gonna, be true. until that's not the only option anymore and then will see a big change I'd, say it's interesting that she would say that you know use from now. We're still gonna be talking about the pandemic, especially in this industry. Are you optimistic about overall the progress of the beauty industry in the long term? I would say so. You know trip trends in beauty they change really rapidly and your right, the food industry did really pivot

well and really quickly when it came to dealing with the pandemic, and that's because the ingredients necessary to do with a pandemic are also part of just the basics of beauty, products themselves. The reason why there are so many different hand. Sanitize is- and you know, scented lotions and stuff and soaps, and They also well, but, like that's, been a boon to the industry actually and adjust required. You know some modifications at the factory. It didn't require modifications to actual products. They just decided to stop making as much and to focus more on sanitizing because they use a lot of the same ingredients as perfumes It was a huge pervert. Not necessarily was it still really remarkable and impressive and useful, but that's also true, so they may pivot and really quickly herbal security. There. Currently writing about

by beauty and political power. The house of beauty securities written about the beauty industry for over a decade working is an editor strategist and clearly trend. Forecaster Arabella. thanks so much for taking time to speak with a sound business wars. It's been a real pleasure. It was my pleasure. I thank you so much for having from wondering this- is episode seven of lorry out versus Este lawyer for business wars. I'm your hosts, David Brown Laurie, Our right to produce this episode, Karen Low, is our senior producer and editor at it. Didn't by Emily Frost, sound design Michael random are so producers, Kate, Yon. Our executive producers are Jenny, Lauer, Batman and martial, doing created or non Lopez for wondering.

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