From Concept to Market: Launching a Beauty Product 101
Q: Maya – Million-dollar question: How does a brand/team come up with a product concept/idea?
A: I believe the answer to this is two-fold:
1.) Look inward; re-visit your brand fundamentals (who you are, what you stand for, who your audience is and what they want, etc.). You must know exactly what you offer and what makes you unique. It’s about owning your space and being authentic. If you do that (and have a winning product/formula and marketing/go-to-market strategy) – the chances of success are higher.
Aside from looking at the basics of the brand, it’s important to look at your existing product portfolio (if you have one) to identify any topline need gaps.
2. Look outward; pay attention to what is going on in the marketplace, what the trends/future trends may be, and if there is any ‘white space’ you can take advantage of.
Q: Akshay – How is the product innovation process kicked-off?
A: Ideation is the first step in the creative innovation process at R&D and can originate from multiple facets:
True breakthrough idea driven by ingredient, product, package, patent, or concept.
Academic institution, incubator driven or partnership with chemical manufacturers.
Competitor driven “me-too” product that currently does not exist in brand portfolio.
Trends or consumer insights driven innovation.
Inspired from trade shows, contract manufacturers and ingredient manufacturers.
Incremental innovation overcoming regulatory challenges or advancing performance, package, or experience of existing product.
Marketing based innovation based on product branding.
Gut instinct and the conviction to take the risk and create a white space opportunity.
While the basic process of bringing an idea to life is consistent amongst major cosmetic brands, how innovation is approached between large multinationals vs indie brands is different. With indie brands, all 8 facets of innovation are handled by one group of product developers and marketers that deliver agile, smart, and lean innovation. On the other hand, large multinationals have these eight facets broken out over several multi-tiered teams and product categories that overlap to bring new innovations to the market.
Q: Akshay – Does the success of a product depend more on the marketing or the formula?
While the formula is the foundation, its performance and sensorial experience is of utmost importance; however, product marketing and branding will ultimately determine wider acceptance among consumers and long-term success of the product. In today’s competitive beauty market, copycats and dupes come up within months of a product launch. Many of the successful brands today are using the same formulas and ingredients that are manufactured by turnkey manufacturers or created by suppliers, and are shared through multiple brands. Sometimes the difference in formula, if any, is minimal. The price a product commands, the number of units it sells, the loyalty towards the product and its success is all driven by brand equity and branding. This includes marketing and consumer engagement through social channels.
For an established and recognized brand with a large loyal following, the stakes are reversed and expectations are higher for the formula they put in the market. For them, launching a good credible formula is critically important to win against competition and gaining market share. Formula will be a key factor in driving user experience, quality and perceived performance, while marketing will drive product story, value, consumer perception and engagement.
Q: Wini – Now that we have a winning formula, how does the dreaded word "regulatory" keep all the checks and balances in place for a stress-free launch?
A: Regulatory involvement is key at all stages of the product lifecycle- from when it's developed in the lab until it’s used by the consumer. There are 3 essential stages:
Product development stage – During this stage, it’s critical to determine if the product is classified as a cosmetic or drug. A detailed review process is conducted on the ingredients and formula for its compliance. Once the product is correctly classified for the markets it needs to be launched in, the next step is to review the artwork label, claims, logos, promotional materials, etc. for all marketing and sales channels.
Registrations and notifications – This particular stage is the most time consuming and involved. In the US, cosmetic reporting is voluntary, however, all established brands are diligent in reporting their products. Most of the other markets require products to be notified or registered. The timing for this process and the amount of information submitted differs from one country to the other depending on the category of the product.
Post launch surveillance – This process can be a bit nebulous, but plays a pivotal role when it comes to dealing with enforcement regulations for things like customer complaints and recalls. Post launch due-diligence processes are normally implemented by beauty conglomerates since they have broader visibility and clout as compared to smaller brands.
Q: Wini – Which product category is the most challenging to register and launch from a regulatory point of view?
A: Sunscreens are the most challenging to map out and launch and they are classified differently depending on the market. In the US, Canada, China, and Taiwan, they are OTC non-prescription drugs – also referred to as ‘special use cosmetics’. In the EU and Japan, sunscreens are classified as cosmetics. The complexity of this category lies in the various regulatory compliance requirements impacting all stakeholders from supply chain to marketing. One of the requirements includes creating and managing product labels for different geographies. To give a few examples, US sunscreen labels feature drug facts based on US monographs and the drug listing of the product, while EU sunscreen labels have claims and UVA-UVB or PA ratings.
Q: Suman – We hear about the behind-the-scenes teams of supply chain and operations. What do they do and what are their biggest challenges?
A: Supply chain teams are the unsung heroes of the retail world, executing to make sure products arrive on shelves and doorsteps. Think of it this way — R&D and marketing teams identify an innovation or market opportunity, but supply chain teams have to figure out how to take a product from “concept to counter.” The global supply chain received much attention throughout the pandemic for good reason — its disruption shed light on how critical it is to our daily lives. Lead times and the external environment drive supply chain operations and can pose challenges to new product development. The process involves sourcing raw materials, testing (including stability testing, testing before mass production in something known as line trials, and consumer testing), and production/transit, all of which are highly susceptible to external factors (like pandemics!). Within beauty and personal care, color cosmetics tend to have a shorter development time. Skincare can be more complex when it comes to over-the-counter (OTC) products like sunscreens. All of this varies on the complexity or customization involved, especially with new formulas and packaging.
Q: Suman – ‘Go fast, be nimble’ is increasingly the name of the beauty game. Have you seen companies/brands leverage turnkey operations or other ways to bring innovation faster to market?
A: It depends. Turnkey operations refer to a contract manufacturer (CM) offering a ready-to-go product or streamlining certain operations for clients. They manage their own product development and work with brands to customize attributes like packaging artwork. Although this is less of a headache for the brand, the CM’s operations are still a part of the larger supply chain and susceptible to its pain points. Company/brand size plays a role, since the ability to meet minimum order quantities (MOQs) can determine whether turnkey operations are used. Right now, there’s growth in hair and body care, which did well during the pandemic and can be easier to develop with higher ROI. Lastly, when everyone is after new trends or best practices (like sustainable packaging), there’s competition and pressure on the same set of CMs.
Q: Maya – What is an ideal go-to-market strategy for a successful launch that covers all sales channels?
A: I would have answered this question differently 5-10 years ago when the story for conglomerates/legacy brands vs. new indie brands or small businesses would have been different. Today, the lines have blurred (largely thanks to social media) and regardless of what kind of company you are, you have to meet the consumer where they are in order to be successful. Beauty companies that have the most success offer a distinctive omnichannel customer experience while focusing on sustainability and inclusivity. These companies have also developed an authentic brand narrative that strikes an emotional chord with consumers and is consistent across all touch-points (channels) of the brand.