Tuesday, October 1, 2024

New York Beauty Brand’s Love for the “No-frills” Marketing Strategy

Photo: Glossier

In an industry saturated with gimmicky products and celebrity endorsed brands, what can a consumer truly rely on to remedy their skin concerns? Digital marketing and virality has been the key ingredient to many beauty brand’s success, more often than not a product sells out as a result of misleading claims or celebrity endorsements.

While there has been successful examples of these high-budget marketing tools, New York-based brands stand firm on their “no-frills” marketing strategies — often emphasising a minimalistic, convenient and efficient approach to appealing to consumers. The concept of “no-frills” refers to the absence of unnecessary details and purely focusing on the basic needs.

New York is the business hub of the United States, with demanding jobs and fast-paced culture, the people of the city have gained a reputation for being highly goal-driven and prioritising efficiency. Hence, many brands follow suit with their marketing tactics due to the nature of the working environment. The concept of “no-frills” marketing highly focuses on simplicity, authenticity, direct communication with consumers.

In New York-based beauty brands adopting this method, it more suitably aligns with the fast-paced, trend-focused environment of New York. This means consumers will typically get what is marketed to them, with marketing focusing on the component, the results and ingredients included. This allows a brand to market the strengths of their product as well as the opportunity to foster relationships with a loyal customer base. LUXUO explores key marketing tactics and tools used by New York-based beauty brands to stand out.

Read more: The Traditional Turkish Ingredient Driving Luxury Fragrances

Minimalist Packaging and Branding

Given the highly competitive nature of the beauty industry — with a plethora of brands to choose from — most beauty brands have opt for more creative and more cost-efficient marketing solutions. Considering budget constraints, this typically entails focusing on the product itself, by ensuring each formula is up to standard and opting for more simple packaging.

This bodes well especially for the New York based demographic, as the consumer preferences tends to be highly diverse, results-driven and pragmatic. This means that this demographic tends to value authenticity and results over aesthetic appeal and virality. Brands like Milk Makeup, while it had grown massively since establishment, has still maintained the minimalistic packaging and “no-frills” branding, leveraging minimalist design to create brand identity without extravagant marketing budgets.

Their use of simple, sleek, and recognisable logo that focuses on function and quality over flashy visuals, allowing the product to speak for itself, allowing the brand to appear more reliable and authentic. Milk makeup’s branding also places significant focus on being vegan, clean and cruelty-free. This is used to appeal to consumers in the Millenial and Gen Z demographic, an audience which has been shown to make conscious purchases that align with their beliefs. Thus, with minimalistic branding and an emphasis on the brand’s core values, brands are able market themselves as socially conscious and authentic without the need for paid celebrity endorsements and flashy packaging.

Direct-to-Consumer Model

The concept of “no-frills” refers to purely focusing on the basic needs of a beauty business. In this scenario, the basic need of a beauty brand is to get their product to consumers to generate profit and market share. Hence, the use of other distribution channels through retailers is not a necessity. The elimination of middlemen and focus on e-commerce platforms is not only cost-efficient but also allows a brand to foster a more genuine relationship with consumers.

By solely using a direct to consumer model, brands have complete control over brand messaging, aesthetic appearance and have full access to consumer data. It could be argued that by distributing products through in-person shopping experiences, this is the most reliable way to ensure profits. However in this day and age, mass digital marketing and consumer engagement seems to be the formula to a successful product. When product is placed in retailers like Sephora or other multi-brand stores, the brand does not have full access to creative control, analytics or profit generated, as retailers retain a percentage of revenue.

Read more: 8 Independent Brands Shaping the Beauty Industry

The direct-to-consumer channel allows a brand to utilise transparency in pricing, sourcing of ingredients and product education to resonate with potential consumers. Billion-dollar New York-based beauty favourite Glossier is the perfect success story of the direct-to-consumer channel.

Founder Emily Weiss has cultivated a strong cult following through the brand’s distinct aesthetic, organic social media presence and dedication to fulfilling consumer needs. Glossier’s back-to-basics approach started with the direct and intimate consumer relationships, as per Forbes.

Through the direct-to-consumer channel, Glossier was able to get a better understanding of what their consumers want, to truly understand who their target audience is. This then allowed the brand to create social media content, in curating a distinct brand aesthetic and ample user-generated-content which validates and authenticates the company’s products and posts. This content then, generates conversations, relationships and loyalty. Therefore, through the direct-to-consumer channels Glossier has been able to more authentically engage with consumers and gain a better understanding of their wants and needs to further sales without the need for a middleman retailer.

Science-backed Formulas

When it comes to appealing to mass markets, efficiency, convenience and effectiveness are the key factors when assessing needs of a regular consumer. Consumers are constantly on the search for a product that is proven to work. The beauty industry is infamous for marketing misleading claims and gimmicky products to garner mass attention from the digital audience, therein lies the allure of science-backed formulas.

New York-based brand and apothecary Kiehl’s is a great example of how science-backed formulas can bring major success and a loyal customer base. The brand started out as a single pharmacy in 1851, operating out of Manhattan — they specialised in beauty products formulated based on scientific research and visible results. While Kiehl’s is a massively successful brand, with over 250 retail stores worldwide, they still maintain a somewhat “no-frills” approach to marketing in placing focus on customer relationships and effective formulas.

In such a competitive industry, Kiehl’s has stood out with their science-formulated products and powerful consumer relationships. The brand’s most utilised marketing tool is the focus on what the product can achieve and how reliable it is. With the brand logo and the words “dermatologist solutions” placed front and centre, a consumer is already given the impression that the product has been approved by experts and is therefore reliable and worth purchasing.

The “no-frills” approach in having a product endorse by industry experts and scientists instead of celebrities, gives an impression of reliability and authenticity from the get-go. Additionally, consumers are given a sense of safety, due to the fact that the products are formulated with the expertise of dermatologists, they are more compelled to purchase the product without further research. Kiehl’s has also been successful in fostering loyal consumer relationships in allowing the strength of their formulas to market themselves. In clearly stating the product ingredients and the intended use, consumers are likely to remain loyal to a brand that prioritises the fulfilment of a skin concern. Therefore, through Kiehl’s science-backed and dermatologist-formulated products, consumers have remained loyal and compelled to purchase, due to the efficiency and reliability associated with these terms.

Read more: Where Food Meets Fragrance: 7 Gourmand Perfumes of 2024

In conclusion, the reasons behind the success of the “no-frills” approach of New York based brands is the prioritisation of the basic necessities of a business, in allowing brands to focus on consumer needs and the product itself. In foregoing flashy packaging and celebrity endorsements, these brands have been able to invest more into the factors that drive a loyal customer base — research and development as well as fostering a genuine connection with consumers through engagement.

At the end of the day, what consumers really need is a product that achieves the intended goal. Thus with the “no-frills” approach, brands are able to appeal to the audience through the strengths of the product, which is a more reliable and authentic way to drive sales.

For more on the latest in beauty and wellness reads, click here.

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Are Tesla’s Golden Days Over?

Tesla’s failed demonstration of the Cybertruck during the 2019 unveiling

Tesla is the world’s most valuable car company, with a market cap of over USD 720 billion, and also the second-most valuable automotive brand (behind Mercedes-Benz). And even though its margins plummeted to a five-year low last quarter, shareholders remain bullish about the company’s prospects, especially in autonomous vehicles (AV) and robotaxis (which Tesla is slated to announce next month).

“No other company is like Tesla, solving enormously complex problems that were (and to some still are) thought to be impossible,” states investment fund Deepwater Asset Management. “Fully autonomous vehicles will take years… However, once solved, the configuration of Tesla as a business changes completely. This is the investment case for Tesla.”

Read More: Digital Advancements Have Changed the Automotive Industry

The Tesla Cybertruck during a 2023 episode of BBC’s Top Gear

The 845 bhp Tesla Cybertruck was featured on a 2023 episode of BBC’s Top Gear with a review stating the car was “obscenely rapid… makes you insta-famous” while also noting a “lack of interior buttons or stalks, relentless attention, price than promised”. Some contend that Tesla has consistently oversold the capabilities of its self-driving software and in reality, is significantly behind the likes of Waymo (Google), Cruise (General Motors), and China’s Baidu in this domain. After all, Waymo has been providing autonomous ride-hailing services since 2018, while Baidu claims to have the world’s largest robotaxi program.

Tesla’s detractors further argue that its long-term success would ultimately be determined by how it handles quality and manufacturing challenges rather than software or autonomy.

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This is based on the fact that in J.D. Power’s 2024 Vehicle Dependability Study (VDS), Tesla was among the worst-performing brands with 252 problems per 100 vehicles (only Volkswagen, Audi, Land Rover, and Chrysler fared worse). Meanwhile, in J.D. Power’s Initial Quality Study (IQS), Tesla was the third-worst brand with 266 problems per 100 vehicles (tied with Rivian and ahead of Dodge and Polestar).

Complaints regarding the company’s quality have especially become prominent since it began delivering the Cybertruck last year. With a starting price of over USD 62,000 and a distinct design, the pickup was expected to revive the excitement around the Tesla brand but instead has left consumers and enthusiasts grumbling about faulty wipers, rust and corrosion on the stainless steel body, and safety issues owing to sharp edges and blind spots. “Owners and professional reviewers haven’t been shy about broadcasting the vehicle’s flaws. And I’m not even talking about its futuristic dumpster aesthetic, though that certainly gives critics plenty of ammunition. I’m referring to its chronic recalls and design features that make it a unique beast to encounter on the road,” reads an article from CNN Business from August 2024.

The situation is such that the Cybertruck even failed to qualify for Car and Driver’s 2024 EV of the Year Award as it broke down during the review. “Before any Tesla loyalists complain that we aren’t giving the Cybertruck its due, know that the one we rented broke on the second day, effectively parking itself with just a few hundred miles on its odometer. A DNF results in a mission-fulfilment score of zero,” said the magazine.

A 2021 report from NPR highlighted that Tesla reported 475,318 vehicles — 356,309 Model 3 and 119,009 Model S — were subject to the recalls, according to statements filed with the National Highway Traffic Safety Administration.

Admittedly, Tesla has issued multiple recalls to address the complaints, but the negative PR is still going to affect brand equity. Remember, a survey by marketing agency GfK showed that 79 percent of car customers consider “reliability” to be a “very important feature,” topping safety (75 percent), fuel efficiency (69 percent), and smooth and quiet ride (52 percent). Similarly, Autovia Group found that “reputation for quality” was the most important factor for automakers in attracting new buyers.

While the Tesla has thus far been synonymous with Californian-elite, the manufacturer has not seemed to adapt to the Asian market. Tesla initially saw success in China, but it has since faced fierce competition from domestic brands like BYD, NIO, and XPeng, which offer more affordable, tech-centric EVs tailored for local preferences. Besides, Tesla has struggled to meet the impending Chinese challenge without improving its quality issues. Tesla’s handling of issues like factory safety complaints and recalls in China has also tarnished its image. Additionally, Asian customers value reliability and affordability, areas where Tesla has struggled against local competitors.

The rise of Chinese automakers like BYD and NIO poses a direct threat to Tesla’s market share in Asia. These brands offer similar tech at more competitive prices, and in many cases, they outperform Tesla on range and features. China identified EVs as a strategic sector in the 2000s and has since employed a variety of policy measures, including over USD 230 billion in subsidies and decisive investments abroad, to gain an edge in low-cost EV manufacturing and target markets that have been traditionally dominated by Western and Japanese marques. China’s support for local EV manufacturers, including subsidies and infrastructure investment, puts Tesla at a disadvantage. In the long term, Tesla may find it harder to compete with domestic giants.

Read More: Automotive Stars of the Electric Vehicle Race

The launch BYD’s Han EV series

“China’s EV makers have undeniably become critical global players in the sector and certainly a long-term threat to once-dominant [OECD] nation auto manufacturers,” noted a report by the think-tank Information Technology and Innovation Foundation (ITIF). “[They] are backed by an increasingly capable support ecosystem, including everything from the quality of the R&D conducted at Chinese universities and research institutions to a deep local supplier base.”

Ultimately, Silicon Valley can often overestimate the value of software and digitalisation due to the quick returns that they generate. As yet, Tesla must avoid slipping into that trap because, despite the advent of software-defined vehicles (SDV), the car industry remains quite different from the tech sector. There is a reason why Apple — despite being one of the most profitable companies — abandoned its automotive project.

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A car is one of the most expensive items that most people buy, hence, it is pivotal for manufacturers to deliver the highest quality and dependability, which can take years, if not decades, to perfect. While electric cars are undoubtedly easier to manufacture than internal combustion engine vehicles (ICEV), Tesla still faces a steep learning curve, and much of its future success could be decided by how it tackles that. 

While Tesla once held a unique position as a symbol of technological innovation and environmental consciousness, appealing to a wealthy and progressive clientele, it has lost some of its allure particularly as the premium electric car market has expanded, and Tesla’s unique selling point — being the forefront of EV tech — has diluted. Tesla’s Autopilot and Full-Self Driving (FSD) software have faced numerous high-profile failures, including accidents leading to fatalities. The National Highway Traffic Safety Administration (NHTSA) and other agencies have investigated these incidents, raising concerns about Tesla’s safety standards. Lawsuits over these malfunctions only fuel further scepticism and wavering public confidence. One could also argue that the association with Elon Musk, whose controversial public persona has overshadowed Tesla, has left some early adopters disillusioned. Musk’s antics, from erratic social media behaviour to divisive leadership, have hurt Tesla’s aspirational brand.

For more on the latest in luxury automotive reads, click here.

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