Stocktake: Masks cancelled the ‘Lipstick Effect’
The value of global cosmetics brands declined sharply in the past year as masks took the fun out of wearing makeup.Thursday, 13 May 2021
The Lipstick Effect – when cash-strapped consumers spend money on lessor luxury items like a new lipstick instead of new shoes – didn’t matter as much this time round as masks and lockdowns took the fun out of wearing makeup and cosmetics brands took a dip in value, globally. Retailers, however, continue to focus on sustainability and purpose-led campaigns to support NGOs and communities in need. Price and purpose is a good strategy, especially in these times.
Global cosmetics brands lose over $12 billion in value
The total value of world’s top 50 most valuable cosmetics brands has declined by 9% as the sector negotiates fallout from COVID-19 pandemic, losing over $12 billion in brand value. The top 50 decreased in value from US$137.5 billion in 2020 to US$124.8 billion in 2021. As a large and diverse sector, there have been mixed fortunes for cosmetics brands, with colour cosmetics the most negatively impacted segment, recording an average brand value decline of 15%. Multi-level marketing brands – including Avon (brand value down 24% to US$772 million) and Oriflame (down 1% to US$802 million) – have faced a 12% drop in brand value on average. The sector’s largest brands in hair care, razors, and fragrance have also been hard hit with an average brand value drop of 10%.
That being said, according to Brand Finance’s Global Brand Equity Monitor, the cosmetics sector has the highest reputation of all sectors globally – only matched by the food sector. A strong reputation, and thus a strong brand, will stand cosmetics brands in good stead to recover at pace in the coming year. “The pandemic has undoubtedly forced change upon the cosmetics sector, from stifling demand – a result of lifestyle changes and financial uncertainty – to the rapid rise of digitalisation and ecommerce. Brands that have shown savviness and the ability to adapt will bounce back from the turmoil of the last year, unlike those that have failed to adapt quickly enough,” says Annie Brown, Associate, Brand Finance. More trends:
- L’Oréal retains title of world’s most valuable cosmetics brand, brand value US$10.2 billion.
- Yves Rocher is sector’s fastest growing brand, up impressive 71%.
- Fresh and The Body Shop are new entrants, claiming 36thand 49th spot, respectively.
- Natura is sector’s strongFest brand with AAA brand strength rating.
A food garden with purpose
Shoprite has partnered with Epilepsy South Africa to grow a food garden in Parys, that provides sustenance and purpose to the disabled community. The Epilepsy SA Free State/North West branch started an organic food garden in September 2019. They now grow a wide variety of vegetables – from brinjals, to tomatoes, cabbage and butternut – that are used in the meals served at the residential care centre. Project coordinator, Keri Steyn comes from a farming family and approached Shoprite after seeing their investment in similar food garden projects. Shoprite came on board and provided the Epilepsy SA food garden with seedlings and gardening equipment including wheelbarrows, rakes and forks. “Now that we’ve started harvesting and the vegetables make it on to the table, our gardeners are even more enthusiastic. They have a real sense of accomplishment, knowing that they can explain the process from seedling to harvesting to fellow residents.” The ongoing permaculture training provided by Shoprite has helped the residents a great deal. “We’ve learnt about organic farming, pest control and harvesting amongst other things.” While the Epilepsy SA food garden’s priority is to supply the kitchen at the care centre with fresh produce, any surplus is sold to the local community. Keri says they’ve even branched out into making sauces and jams. Shoprite has been supporting food gardens across South Africa since 2015 and has partnered with more than 130 community food gardens and 675 home gardens, benefitting more than 32,000 people.
Pick n Pay launches new reusable bag
Leading up to World Environment Day 2021 on 5 June, Pick n Pay has launched its latest 100% reusable RPET bag featuring some of South Africa’s most beautiful and iconic trees, designed to bring visibility and awareness to the country’s important forest ecosystems and the preservation of these. Partnering with NPO, Greenpop, for the latest limited-edition range, the bags are part of a collaborative series to help raise awareness and funding for worthy projects across the country. More recently, the ‘Save our Beach Huts’ RPET bag showcased the iconic beach huts in Muizenberg and St James, and profiled the project aimed at restoring the 36 beach huts that are a rich part of Cape Town’s heritage. The new nature-focused limited-edition bags are available in selected Pick n Pay stores nationwide at a cost of R30 each. Proceeds from the sale of the bags will help raise funds for Greenpop, which will use this to plant, monitor, and maintain trees in its forest restoration project, Forests for Life, in Sub-Saharan Africa. Greenpop has, since 2010, planted over 139,000 trees and inspired 132,000 active citizens across South Africa, Zambia, Malawi and Tanzania. Their work aims to restore ecosystems and empower environmental stewards through forest restoration, urban greening, food gardening, and environmental awareness projects across Sub- Saharan Africa.
This week in numbers
The Chief Marketing Officers (CMO) Council research reveals that 69% of marketers have increased their Martech investments in 2021. For those investments to pay off, marketers need to collaborate with their IT partners. With partner, Globalfluency, the CMO Council is interested in understanding how marketing and IT organisations collaborate on marketing technology (Martech) strategy; vendor selection; solution management; and innovation. The challenges are: What is the right model? Should marketing take lead? Where should IT play a role? How can these two functions work together to make the most of Martech spend? The CMO Council wants to hear from you. All participants in their survey will receive and summary of the results. Click here to add your voice to the debate.
QUOTE of the week:
“A longstanding customer expectation, amplified by the pandemic, is for customer experience to be consistent across all touchpoints, to ensure customer needs are being met wherever interaction occurs with brands,” said Amelia Beattie, Chief Executive of Liberty Two Degrees, on Retailing Africa this past week.
*Stocktake is a weekly roundup of current FMCG retailing and brand news, curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to: firstname.lastname@example.org.
Louise Burgers is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.
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