Ruth Marlow N0642518 FMBR002 2288 words
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Introduction Report overview and objectives Methodology
United Kingdom Brand Audit Brand overview Brand health Brand positioning Consumer Platforms Macro Environment PEST Trends Micro Analysis Market Health Competitors Brand opportunities SWOT Ansoff Matrix Global distribution Locations
10-11 12 13 14-15 16-20 21 22 24-25 26-27 28 29 30-31
United States of America Brand Audit Brand overview Brand health Brand positioning Consumer Macro Environment PEST Trends
32-33 34 35 36-37 38 39
Micro Analysis Market health Competitors
Brand Opportunities SWOT
Optimising USA potential Six Pâ€™s Digital marketing strategy Timeline
46-47 48-49 50
This report will give a situational analysis of the British cosmetics brand Illamasqua and a marketing and communication plan that will explore the challenges and opportunities they may come across when optimising their global potential in USA.
Research objectives Measure brand perception, usage and awareness in the UK and USA Who are Illamasqua’s customers? How can they use their UK positioning to maximise their potential in the USA? Primary research methods Quantitative: Online surveys Qualitative: Face-to-face interviews, store observations Method: Surveys were used because they provide broad capability and their data can be easily analysed and communicated. A questionnaire was used to conduct our UK survey (Appendix A), another used for the USA focus group (Appendix B). A list of questions was read to employees during face-to-face interviews in Illamasqua’s flagship store in London (Appendix D) and in MAC, New York (Appendix C). All of the participants received ethics information. Sample: UK online survey - 100 UK face-to-face interviews - 1 UK store observations - 1 USA store observations - 1 USA online survey - 5 USA face-to-face interviews - 1 Store observations were carried out to gain an insight into the retail environment of Illamasqua and their competitors. Observation aims: - Employee/consumer interactions - Store layout - Prices - Visual merchandising Locations: Illamasqua flagship store, London (Appendix D) MAC store, Covent Garden, London MAC counter Macy’s, New York (Appendix C) Secondary research methods Online examples: Websites: Mintel.com, Illamasqua.com, Euromonitor Social media sites: Facebook, Twitter, Instagram Offline: Books: Global Marketing by Gillespie, K. and Hennessey, D.H. and Consumer behaviour: A European perspective by Solomon, M, et al. Articles: The new rules of marketing and PR by Scott, D.M.
Illamasqua launched in Selfridges, London. Founded by Julian Kynaston, a marketing entrepreneur, with an aim to create a British colour cosmetic brand with an emotional connection to its consumer (Illamasqua, 2016). Illamasqua joined forces with the Sophie Lancaster Foundation to help stamp out prejudice, hatred and intolerance (Ree, 2014).
Joseph Corre, creator of Agent Provocator and son of Vivienne Westwood and Malcolm McLaren joined the brand’s management team. (Chesters, 2011). The flagship store opened in London’s Soho, which also houses Illamasqua’s School of make-up art courses (Cosmetics Business, 2010).
Illamasqua win the prestigious Cool Brand award and release their first fragrance, Freak (Chesters, 2011).
The brand have grown enormously and have a large social media following, their highest being on Instagram (380,000 followers). They have found their place within a crowded market and trade across eight countries (Chesters, 2011).
Embrace self-expression, identity and alternative sub-cultures across all brand interactions and platforms. (Illamasqua, 2016).
Provide all customers with colour-intense, colour-true and long lasting make-up products for face, eyes, lips and nails. As well as professional tools and luxury fragrances. Break this industry’s corporate view that it can dictate beauty to consumers and spread the message that everyone deserves to feel beautiful.
Their motto is bold, direct and encourages self-confidence.
WITH BRITISH CREATIVITY AT OUR ROOTS AND SELF EXPRESSION IN OUR HEARTS OUR MISSION IS TO INSPIRE YOU TO TAKE PRIDE IN EVERYTHING YOU ARE AND ALL YOU ASPIRE TO BECOME (Illamasqua, unknown date)
Based on primary research findings The results are bias to the demographic of respondents, which was predominantly females aged 18-24. Awareness In the UK survey participants were asked “Have you heard of the brand Illamasqua?”.
I have discussed Illamasqua with various friends and family and have observed a medium-low awareness of the brand. Additionally, previously to this project I had no awareness of the brand and would describe myself as a make-up enthusiast. Usage In the UK survey participants were asked “Have you ever purchased any products from Illamasqua?”
The largest percentage of participants had never bought a product from Illamasqua. No participants answered “Yes, lots” which is a particularly concerning response. Perception The UK survey provided mostly positive brand perceptions surrounding product quality and ethics. Participants were asked “If applicable, please give further feedback on your product and experience with Illamasqua”
Based on secondary research findings Sales - Wholesale sales £2.2m 2009 (retail £3.2m) - Online sales achieved £800k during 2010 (£375k margin contribution) Distribution - Exclusive, high profile launch in Selfridges, Oxford Street (success fuelled roll-out to other Selfridges stores and stimulated further trade interest) - UK distribution in 8 stores (Fenwick, BT2, Selfridges, Debenhams and asos.com) - Global distribution in 7 countries (pages 30-31) (Propoganda) 12
This map shows Illamasquaâ€™s position within the Creative Affordable Luxury group. Competitors in this group are MAC, Urban Decay and Too Faced. Illamasqua also compete with the Functional Affordable Luxury group, for basic products where brand vibrancy is not essential, such as foundation. The Creative High Street pose a threat as they are a cheaper alternative. Additionally, there is a general threat from brands with high awareness and availability such as Topshop and Boots ranges. 1 - Functional Luxury 2 - Functional Affordable Luxury 3 - Creative Affordable Luxury 4 - Functional High Street 5 - Creative High Street 6 - Creative Economy
Illamasqua embrace people of all ages, races, sexes and make-up styles. Their customers are generally female aged fifteen onwards. They are a student or young professional, who uses make-up to express their identity. Often in an urban environment, they purchase from Illamasqua in-store and online. They are involved with the brand on social media and share pictures of their favourite products and make-up looks.
UK primary research uncovered positive experiences and opinions of the brand: “Highly pigmented, love the brand ethic and how the colour ranges are eccentric” UK survey respondent, female, aged 18-24
“I’ve got the foundation, it is expensive but lasts all night and really good coverage” UK survey respondent, female, aged 18-24
According to Illamasqua’s marketing director Natalie Hargreaves, Illamasqua often identify their consumers through three particular archetypes (Thomas, 2012).
The first archetype is named Counter Culture. They embody creativity and are proud of their alternative look and sub-culture identity. They experiment with bold make-up, making 3-4 Illamasqua purchases per month, products such as False Lashes No.12 in scarlet and Satin Lipstick in Deep Berry.
The second archetype is Night-time Diva. They prefer a simple day-time look, using products from the Metamorph collection to highlight their natural features. In the evening, they become more adventurous, using brighter products for features such as lips and eyes. Generally making 1-3 Illamasqua purchases per month.
The third archetype is called Dare-to-be-differents. They are more adventurous with their day make-up than Night-time Divaâ€™s but not to the extent of the Counter Culture. They make 2-3 Illamasqua purchases per month.
Currently, Illamasqua share their vibrant identity via beauty blogs, YouTube, social networks, and fashion/style sites. The website has product shipping to almost two-hundred countries, a blog and information on the school of make-up. It also has interactive features and is easy to navigate.
The map below shows desktop traffic to the Illamasqua website, indicating a high interest from the USA.
Desktop traffic MAR-MAY 2016 UK 39.25% USA 23.88% GERMANY 3.85% (Source: Similar Web)
Illamasqua have a vibrant Instagram presence where they create an exclusive community using the hashtag â€˜illamafiaâ€™, which is attached to over 3,000 posts (as of May 2016). The direct link to their website helps traffic consumers and monetise the channel, it is also used to track site referrals.
MAC have a larger Instagram following and use the information section on their page to promote their Snapchat and website. They also aim to create an online community through the use of hashtags and customer reposts.
Illamasqua and their competitors Instagram following as of May 2016
Illamasqua utilise Twitter to engage with their customers. This technique saves money and time as it is free to advertise and interact in this way. They respond quickly and effectively to customer tweets.
Illamasquaâ€™s branding is consistent across their social media channels with the Metamorph collection featured in the page banners on their Twitter and Facebook pages.
of website traffic from social media is through Facebook. Making the site worth investing and nurturing, to gain more website traffic and sales. (SimilarWeb, 2016). 18
Illamasqua work with bloggers/vloggers to promote their products and ethos. Building good business relationships will be extremely important for Illamasqua in the future as this PR trend increases.
Beauty vlogger Jordan Bone, who promotes self-confidence
Beauty vlogger Jamie Genevieve
Although Illamasqua use mainly online platforms, they use offline methods like magazines during campaign releases such as Make-up for your alter ego, shown below.
i-D Magazine Cover
Vogue Japan Page
Illamasquaâ€™s 2011 collection called Theatre of Nameless was released through the brandâ€™s website and in magazines. Co-branding across different platforms is a technique which Illamasqua can undertake to spread their brand message and reach consumers.
There are many aspects which effect the business environment. The PEST analysis below identifies external factors that may affect Illamasqua in the UK.
BREXIT “The UK retains a strong competitive edge, but Should the United Kingdom remain a member of most likely loses business as it becomes harder to the European Union or leave? provide certain services to EU markets” Global Counsel The EU referendum will take place on 23rd June Leaving the EU would lead to changes in trade 2016. The result will undoubtedly have impacts for boundaries, make goods and services more exUK businesses, especially those wanting to ex- pensive for UK consumers and UK businesses will plore their potential outside of the EU. not be able to export as much. (CEP) Depending on the outcome, Illamasqua should ensure they are abiding by the correct laws. “The UK is the fifth largest economy globally (in UK brands have support from being part of a counUS$) in 2015” Euromonitor try which is economically successful and globally recognised. The UK and USA have a good trading and... relationship but this may change depending on the EU referendum result. “....the largest recipient of foreign direct investment Illamasqua have good relationships with business(FDI) inflows in the European Union in 2014” es across the world, such as Bloomingdales in Euromonitor Dubai, and should utilise these when entering the USA.
“8 in 10 consumers having recently accessed a so- Illamasqua could use future forecasting to keep up with market trends and post relevant content on social network” Mintel cial media. Building an app is essential, Illamasqua Social media sites such as Facebook, Twitter and should consider what their competitors offer and Instagram have become platforms for consumers ensure they can provide something unique. to share the brands they love. The boom in blog- “YouTube registers the biggest proportion of users gers/vloggers has meant that customers have visiting a few times a week (33%)” Mintel more power to put their opinions and experiences To utilise this regular engagement they should inonline. vest in building strong business relationships with vloggers.
“Online spending on beauty and personal care products reached £967 million in 2015, Mintel estimates, the equivalent of 10% of the total estimated market.“ Mintel
Impacts and opportunities
Consumer’s expect an engaging, personalised shopping experience online as well as in-store. Creating a unique experience with the incorporation of technology is the way to capture consumer attention.
Customers now have the power and ability to switch between brands in a few simple clicks. Decisions are often based with the perceived value. Illamasqua’s USP is their exclusive community and should be an attribute that they promote. Using complexion reading technology would accurately match shades to a consumer. Illamasqua could invest in further technology to select complimenting colours for other products such as lipstick. This would encourage sales and add a sense of personalisation to the shopping experience.
Created from themes of androgyny and unisex within fashion culture. In 2015, Selfridges launched a gender neutral shopping area called Agender, challenging stereotypes of gender. Illamasqua already celebrate self-expression within their products, identity and advertising. For further involvement Illamasqua should launch a gender-fluid campaign including a perfume which suits all sexes.
Within beauty stores, technology is used to engage the consumer and make sales. Such as matching skin-tones to products and educating consumers about products. Consumers go online to research a product before purchase (Mintel, 2016). Illamasqua need to build an app to create a mobile strategy that offers benefits, such as discounts or tutorials. Competitors such as Boots No7 use skin-matching technology to accurately pair skin tones to products. However, this is only available in-stores, an online matching system via a photo upload would be beneficial to new consumers without store access.
The bare-faced look which started with Cara Delevingne has become a trend which is set to continue to grow over the next couple of years (WGSN, 2016). The trend celebrates beauty in its most natural form, as well as making consumers feel good it has also done good - online posts of ‘no-make-up selfies’ raised £8m for Cancer Research UK in 2014. (The Guardian, 2014) Illamasqua’s Metamorph collection which focuses on bright skin and defined brows suits this trend perfectly. To further promote the collection they could work with a celebrity make-up artist in a ‘get the look’ editorial.
The total beauty and personal care market was worth £9.65bn in 2011, with the beauty segment growing 1.7% but the personal care sector decreasing 1.8%. Overall there was a decline of estimated 0.1% in 2015, as the rise of discounters and frequent promotions had a negative effect on sales (Mintel). Consumer spending on beauty products 2010-2020
- Recent increase in budget brands, such as Makeup Revolution and Kiko Milano. - 37% of make-up buyers agree that special offers/low prices encourage them to experiment with new products/ colours (Mintel) - Illamasqua is a serious competitor to L’Oreal, Estee Lauder and LMVH “the most exciting event in make-up for 25 years” (Selfridges) - Blind product testing with consumers outperformed MAC 4 to 1 (Propoganda)
Profile - High brand awareness and usage (Appendix 1) - Creative Affordable Luxury (page 13) - Sleek store design and packaging - Promote individuality and artistic freedom with their motto - All ages. All Races. All sexes. - Celebrity collaborations e.g. Selena Gomez - Test on animals - Signature product is bullet shaped lipstick Technological - 50k average likes per Instagram post - 4.80m website views in the last six months (Similarweb)
Profile - High brand awareness and usage (Appendix 1) - Creative Affordable Luxury (page 13) - Bold, colourful, ‘tongue n cheek’ brand - Heavily featured in beauty magazines and blogs - Cruelty free - Female ‘girly’ demographic only competes with some of Illamasqua’s customers Technological - 41k average likes per Instagram post - 1.3m website views in the last six months (Similarweb)
This SWOT analysis identifies four areas Illamasqua must consider in their strategic planning process in the UK, it connects its objectives and strategies to actionable tactics carried out by the brand. STRENGTHS - Strong brand identity - Medium brand awareness when directly asked (Appendix 1) - High consumer satisfaction (Appendix 1) - Good business relationships with large retailers - Online interest and high social media engagement - Competitive social media following (Page 17) - Experience in trading online to nearly two hundred countries - Experience in collaborations with bloggers/vloggers - Ability to target appropriate consumers - British heritage - Large brand offering (range of make-up and school of make-up art) - High quality products/pigments - Success in festival make-up at Lost Village - Keeping up with trends e.g. Less is more and Metamorph collection - Key influencers are engaged with the brand e.g. Jamie Genevieve (page 19) - High quality online and offline customer service WEAKNESSES - Low brand awareness when indirectly asked (Appendix 1) - Preference to online platforms for advertisements/engagements may limit audience - High pigments may put off consumers who favour a natural look e.g. Night-time Diva archetype - Similar packaging to competitors MAC - Relatively new company - Only seven UK stores - Often lack of consumer loyalty with Illamasquaâ€™s target customers OPPORTUNITIES - Collaborations with celebrities or nano celebrities such as bloggers/vloggers - Consumer desire for greater diversity in campaigns (Mintel) - Festival make-up - Offer a unique proposition to consumers - Expand digital offering e.g. build an app/QR codes - Promote cruelty free - Diversifying population poses need for larger range of make-up tones - Male beauty buyers THREATS - Well established and popular competition - Online retailers that offer low prices and fast delivery e.g. Amazon - BREXIT - Entry of another brand in the Creative Affordable Luxury group (Page 13) - Celebrity in collaboration damages brand image - Availability of creative/vibrant high street and budget brands (Page 13) - Consumer preference to discount stores (Mintel) - Path to purchase has become more complicated e.g. review/comparison sites 28
The Ansoff Matrix will help Illamasqua to consider how to grow in the UK and USA through established or new products or in existing or new markets and assess the differing degrees of risk associated with each option.
- Open new stores
- Extend nail products to art pens which would
- Increase market share
be popular amongst the professional customers
- Find new customers within market
- Extend tools to beauty blenders, a current
Established - Sell more to original customers Markets
trend within the market - Extend perfume range - Hair products e.g. wigs, brushes - Make-up setting sprays - Phone cases featuring their logo/motto
- Opening in new markets (USA)
- Hair products
- Invest in relationships with other businesses
- Supplements e.g. nail/hair growth
- Broaden range in skin products to suit the
- Clothing/accessories e.g. clutch bags with
New diverse culture Markets - Select lipsticks to suit the skin tones (USA) - Extend primer products to suit humidities e.g.
inside pockets which are sized to fit Illamasqua lipsticks - Phone cases featuring their logo/motto
extra thin, extra thick
Illamasqua have a presence across the world, they have concessions and stand-alone stores in the United Kingdom, Croatia, Slovenia, Indonesia, United Arab Emirates. Thailand and Australia.
Illamasqua present a coherent brand identity across the world, each location is easily recognisable and communicates the brandâ€™s values. Currently, Illamasqua are No 1 colour brand in Bloomingdales Dubai (Propaganda) and have built other strong business relationships with Myer, Hudsonâ€™s Bay and Harvey Nicols (HCP).
Introduction of Illamasqua in Sephora, the largest perfume and beauty product retail chain in the USA (thedrum). “All 200+ products that will be available in store will also be available to purchase online through Sephora. com and through their telephone service” (krasneybeauty) “The deal with Sephora has been done about a year ahead of any formal plans we had for the U.S.” Julian Kynaston, Illamasqua Founder and Chairman (thedrum).
“An aggressive roll-out plan to further expand our US offering saw the opening of 25 more counters in September 2010 – doubling the number of stores in which we trade across the USA.” (Propaganda) “Illamasqua had gone global with an online service shipping worldwide alongside 3 stand alone stores and 9 concessions in the UK” (watson)
Extension to Bloomingdales (cosmeticbusiness) “Partnering with retailers as prestigious and as big as Bloomingdales and Hudson’s Bay is both momentous and humbling for Illamasqua. It will not only transform our presence in North America but will have positive ripple effects across the globe” Julian Kynaston, Illamasqua Founder and Chairman. (cosmeticbusiness)
Withdraw from North American market in a phasing out process with reductions (unknown) “...we have no other US retailers for now but we will update you as soon as any changes occur. As we ship worldwide, this will be the best option for now.” (Illamasqua) The USA is viewed as the most challenging foreign market to enter, success may take several attempts (hugeinc). Common failure reasons are: underestimating the costs of entering a large and highly competitive market, undertaking expensive stores or unfortunate timing. It is critical for Illamasqua to recognise and evaluate contributors in the initial entry and withdrawal. 31
This section will explore Illamasquaâ€™s potential in the USA.
Embrace self-expression, identity and alternative sub-cultures. Targeting and communicating with the right customers is crucially important to the success of the re-entry.
Provide all customers with colour-intense, colour-true and long lasting make-up products. Illamasqua should use initial entry as a platform to predict sales.
Spread the message that everyone deserves to feel beautiful, this will be easily transferable and appreciated by American consumers.
Their current motto is “You Are Beauty”, when re-entering the American beauty market they should ensure that their motto communicates to the consumers the brand identity as well as their ethical attributes.
Illamasqua Instagram, 2016
Illamasqua flagship store, London, 2016
This motto communicates the brand identity and connects Ilamasqua to the consumer’s beauty. It also gives indication to the bright product pigmentations.
This motto is simple and defines the brand identity. It emphasises the brand’s Britishness which is relates to brand success in the USA (hugeinc).
Based on primary research findings The results are bias to the demographic of respondents, which was predominantly females aged 18-24. Awareness In the USA survey participants where asked “Have you heard of the brand Illamasqua?”.
This result is relatively positive considering the brand’s short presence in the US, it is a good result to build on but may need more investigation as this survey had a small sample size and may be bias to a certain graphical location. Usage USA participants were asked “Please state three make-up brands you use on a regular basis”
Illamasqua gained no responses to this question but it gives a good indication of popular beauty brands in the USA, Illamasqua’s future competitors.
Percentages to nearest whole number
Perception The USA survey asked “Please give your view on the brand”. The responses were not particularly insightful, some participants demonstrated knowledge of their locations but none demonstrated understanding of their products or ethics, which was shown in the UK survey.
Overall, the survey indicated brand awareness which Illamasqua can utilise in their re-entry. Special attention should be made to communicate the brand identity, build from an analysis of methods used in the initial entry. 34
1 - Functional Luxury 2 - Functional Affordable Luxury 3 - Creative Affordable Luxury 4 - High Street 5 - Economy
This brand positioning map shows Illamasquaâ€™s position within the American beauty market, based on their initial entry and brand identity. The map includes a selection of brands within the large market.Illamasqua are placed in the Creative Affordable Luxury group, their competitors are MAC, Benefit, Urban Decay and Make Up Forever. Illamasqua also compete with brands in the Functional Affordable Luxury group such as Tarte, Laura Geller and Charlotte Tilbury. Brands from the High Street and Economy group pose a small threat to Illamasqua because they are cheaper and often more accessible.
Illamasqua will maintain high quality product offerings and unique brand identity, which will attract American consumers with similar attributes. However, there are many differences between the two consumers.
- Optimism is much higher in the US than the UK - Americans are more likely to be affected by emotional advertising - Self-assured Americans are more than five times more self-confident than UK consumers (Econsultancy)
- Drug-stores and online are the most common USA purchasing channels for cosmetics - Reputation, ingredients and price are most important to an American consumers (USA survey appendix B)
In the USA, Illamasqua should consider a digital marketing strategy which is tailored to American consumer behaviour.
(We are Social) 36
â€œMany women are expected to embrace adventurous and bold colours in the years ahead. Growing interest in individualism and self-expression has inspired US consumers to play with make-up and create wearable art, and an artist requires an extensive paletteâ€? (Euromonitor)
The PEST analysis below identifies various external political, economic, social and technological factors that may affect Illamasqua in the USA.
BREXIT If the UK leave the EU it will have significant affects on the US. “The US is Britain’s biggest export market after the EU, buying more than $54bn (£35bn) in goods from the UK in 2014.” (The Guardian) If Britain left the EU they would be faced with the same tariffs and trade barriers as other countries outside the US free trade network.
Impacts and opportunities
“Regulatory divergence would increase over time, affecting trade volumes and reducing the attractiveness of the UK for investment. This would impact on European businesses invested or trading in the UK and supply chains involving UK firms” (Global Counsel) It may be more difficult for Illamasqua to trade with the US.
Positive inflation growth from -0.1% in 2015 to Benefits of positive inflation growth 1.4% in 2016. (Investopedia) - Help increase production - Encourages borrowing and lending - General household increase spending (Investopedia) Re-launching Illamasqua into the US when the economy is doing well will increase likelihood of success. Further research is needed to consider specific time of market entry to suit US economy.
Illamasqua need to extend the variety in their skin tone based products in order to meet the needs Hispanics, blacks, Asians and other minorities in of the American population. They should undergo 2011 accounted for 50.4% of births, the first time in market research to establish what successful US U.S. history. (USA today) brands are offering. This research will allow the correct products to be sold in the correct volume. Particular emphasis on the Hispanic population from primary research in Coburn Communications, Consideration of complimentary colours in other USA and secondary research: “Hispanics were 6 products such as lipstick and eye-shadow which percent in 1980, are 17 percent today, and should should match the skin tone colours available. be 29 percent by 2060.” (americanprogress.org) Beauty retail technology
Illamasqua must be perceived by customers to be at the forefront of retail technology and provide in“45% of beauty consumers prefer to search for tangible benefits in-store. product information in-store on their mobile device rather than ask for assistance from a sales asso- Ensure Illamasqua website, blog and all social ciate...two in five (39%) consumers are interested media sites are compatible with tablets and othin using, or have used, a store-provided tablet to er hand-held devices. Incorporate QR scanners research beauty products available.” (Acosta) in-store to connect the consumers to a make-up tutorial via their smart-phone for example.
Brands which put emphasis on their ‘Britishness’, messaging and aesthetics are more successful (hugeinc). Illamasqua could utilise this trend and incorporate their British heritage in their motto or in an advertisement campaign.
Consumer’s interest in celebrities has grown at an uncontrollable rate due to the rise of technology and social media. “The Kardashian sisters are responsible for the internet’s obsession with face and eyebrow sculpting” (fusion). Brands quickly released contouring kits, including Illamasqua.To emphasise their offering they should endorse a celebrity make-up artist, a cheaper alternative to the celebrity themselves.
“In the first half of 2015, according to the Korea Customs Service, the total export value of Korean beauty products to the U.S. was $52 million, a 60% increase from last year. America is the third biggest export market for Korean cosmetics companies, after China and Hong Kong.” (Schaefer). It began with BB creams, claiming to cover blemishes and the Korean craze began. Illamasqua could extend their products to face creams.
“In 2015 colour cosmetics grows by 7% in current value terms to reach sales of US$14.4 billion Premium colour cosmetics enjoy a surge in popularity, growing by 14% in current value terms Average unit price in colour cosmetics increases in 2015 L’Oréal USA leads colour cosmetics with a value share of 22%, closely followed by Estée Lauder Cos Inc with 20% Colour cosmetics expected to register a value CAGR of 4% at constant 2015 prices over the forecast period to reach sales of US$17.1 billion in 2020” (Euromonitor)
(Mintel) “The beauty market is seeing steady growth in the US, reaching total sales of $46.2 billion in 2015, representing 4.1% growth from 2013. This is projected to continue, with Mintel estimating gains of 12% from 2015-2020. Color cosmetics remains the leading segment of the beauty category, representing 21.8% of the market. From 2013-2015, every segment in the category saw sales gains except for nail color and care, which saw its market share drop 3% while Mintel research shows that sales of lip cosmetics increased 3.6%, due largely to the recent popularity of bold, bright lip colors and product options.” (Euromonitor) This shows sales breakdown of the beauty industry in the United States in 2015, by product category. Illamasqua should extend to hair-care products.
Company Shares of Colour Cosmetics: % Value 2011-2015
L’Oréal USA Inc remained the leading player in colour cosmetics in the US in 2015 with a value share of
The company’s mass-positioned Maybelline was the leading colour cosmetics brand in 2015, commanding a value share However, L’Oréal’s premium brands outpaced its mass brands as both Urban Decay and YSL recorded value sales growth of
- Highest awareness in USA survey (page 34) - Strength from being part of L’Oréal group.
Science based adverts to entice customers. “New York” adds value and recognition.
Celebrity endorsement Gigi Hadid promoting contouring trend.
Competitors may have secured endorsements with influential celebrities.
Cara Delevingne for Yves Saint Laurent
Kendal Jenner for EstĂŠe Lauder
MAC have been present in America since 1991
MAC, New York
This SWOT analysis identifies four critical areas Illamasqua must consider in their strategic planning process in the USA it connects its objectives and strategies to actionable tactics carried out by the brand.
STRENGTHS - Strong brand identity to help compete in a crowded market - Very strong and exclusive social media engagements - Brand awareness from previous USA entry (Appendix 2) - Good business relationships with large retailers in the USA and overseas - Online interest and social media engagement from USA consumers - Experience in trading online to nearly two hundred countries - Experience in collaborations with bloggers/vloggers - Ability to target appropriate consumers - British heritage which is popular among American consumers - Recognise and evaluate the positive and negative aspects of initial entry WEAKNESSES - Premium price may limit consumer base - Preference for online platforms for advertisements/engagements may limit audience - Less alternative/sub-culture consumers - Not sufficient range of skin shades - Not new for consumers due to initial entry OPPORTUNITIES - Collaborations with celebrities or nano celebrities such as bloggers/vloggers - National celebrations where bold make-up is used e.g. Halloween - Social events where colourful make-up is used e.g. Coachella - Offer a unique proposition to consumers - Expand digital offering e.g. build an app - Promote cruelty free THREATS - Fail re-entry - Competitors with similar brand message e.g. MAC - Competitors who have already endorsed influential celebrities - Retailers not willing to stock Illamasqua due to initial entry failure - High amount of well established and popular competition - Loss of focus on current countries, may suffer in the re-entry - Change in scale of production and distribution leads to problems for the USA and other stockists 44
STRENGTHS Strong online community
WEAKNESSES Premium price limits consumers
OPPORTUNITIES Collaboration with vlogger Jack Emory - Embodies Illamasquaâ€™s values - Creative make-up looks - No ties with other brands
THREATS Competition with similar packaging
Objectives - To increase brand awareness making Illamasqua a recognisable brand for make-up loving consumers of all ages, races and sexes - Aim to be consumer’s first choice destination for cosmetics - Form a community of customers - Build an app and gain 500,000 downloads, of which 200,000 are purchasing products and are regularly engaged
PRESENT A broad range of cosmetics products for face, eyes, lips, nails, as well as tools and fragrances. Many products have ‘2 in 1’ elements. USA OPTIMISATION Illamasqua should extend their make-up courses to the USA. They should involve current and upcoming bloggers who embody their values. Illamasqua are cruelty-free, unlike many of the brand they compete with. Incorporating this attribute in an emotional social media advertisement would reach American consumers and get the brand noticed.
PRESENT Current availability USA Online - websites such as Illamasqua, Selfridges, Debenhams and asos, with international delivery options Offline - None USA OPTIMISATION Illamasqua should build an app which allows customers to purchase products easily, with a reduced shipping cost. Launch a flagship store in a highly populated shopping location, near competitors to ensure the correct consumers Pop-up stores in Sephora Concessions in department stores
PRESENT Affordable luxury (page 35) Foundation: $44 Mascara: $25-28 Professional and students members receive 25% off Account holders receive 15% on their birthday USA OPTIMISATION Offer 20% for professionals and 15% students, which is reasonable amount and maximises profit Maintain similar price range to show consistency and products are worth the money. Competitors have similar prices:
PRESENT Consumer who expresses themselves through their make-up (pages 14-15) USA OPTIMISATION Targeting the correct consumer is essential in the success of the USA re-entry. Track online brand engagement to define areas of potential customers. To engage potential consumers Illamasqua should provide festival make-up at American festival Coachella. Refer to appendix B question nine.
MAC Mascara: $17-$22 Benefit Foundation: $26-$34 EstĂŠe Lauder Foundation: $38
Illamasqua applying festival make-up at UK festival Lost Village 2015
PRESENT Free testers in-store Sales advisors willing to give advice, test products on customer USA OPTIMISATION Use complexion-matching technology in-store. Illamasqua should launch an online service, the unique offering would suit customers without the access or confidence to make in-store purchases.
PRESENT Free UK delivery Online promotions USA OPTIMISATION Build an app and offer promotions such as discounted entry to classes at the make-up school, ability to pre-order new products or seasonal offers. This would encourage brand loyalty and sales. Online promotion - Repost posts with the tag #illamafia - Endorse social media influencers/vloggers - Create a Snapchat filter for use in special store events, Coachella and make-up based holidays e.g. Halloween
App features -tutorials - Trends - Beauty hacks - Bar-code scanner for Illamasqua products - Wish-list - Face scan for personalised tutorials to suit consumers complexion, face shape ect.
The USA has various weather conditions across its fifty states. To address this Illamasqua could create a section within their website which gave location based product recommendations. Example
Customer clicks on Georgia
Shows predicted temperature and top three products e.g. primer for hot weather to ensure long-lasting foundation cover
Their state is stored in the account and the customer is sent free products/discount vouchers to suit their location e.g. blotting paper or 20% off waterproof mascara 49
The marketing and communication plan is to ensure that Illamasquaâ€™s re-entry into the USA maximises their global growth potential and builds on successes from their previous entry. The plan takes on a different approach to their initial entry; it is about starting small and growing a following, with a particular focus on digital engagement and community. The opportunities highlighted within the report demonstrate how Illamasqua could be leading the market in the future. The strategic timeline (opposite page) is crucial in ensuring Illamasqua achieve their aims and utilise opportunities. Illamasqua should undergo continuous monitoring of sales, engagement, usage, perception and awareness, to prevent another failed entry. Illamasqua have made unpredicted growth in the UK, with high-quality products as well as a unique brand image and ethics, they should be able to find their position within the American market and succeed