I still remember the first time my mom took me into Sephora to buy makeup. It was an experience that many young girls can remember having. According to Piper Jaffray’s recent downgrading of Estée Lauder, that experience is slowly going away.
The rise of a natural makeup look, a combination of VSCO girls and women reclaiming their clean skin, has caused the investment firm to move Estée Lauder from overweight to neutral. According to the report released, prestige cosmetics have less of a market than ever, with fewer products being bought. The products which are flying off the shelf have high brand loyalty, multiple uses, and highly sustainable messaging.
Say you’re an investor though: is there really hope out there in the beauty market? I’d say yes – and Rihanna might support me on that. Even though prestige might be falling downwards, brands with clear missions and connections are trending upwards.
Take Glossier for example. A woman-run beauty company that just reached unicorn status this past year. Young girls are drawn to the brand for its fun advertisements and easy use. But, they stay because the brand promises a low impact on the environment and shows women in positions of power.
Another example is the aforementioned Fenty Beauty which is more popular than ever. In fact, the “Pro Filter” foundation just got added to the Philadelphia Museum of Art.
A more fresh-faced world isn’t the only consequence that might happen as a result of the downgrade. Beauty is now expanding globally, reaching markets in Asian countries such as China.
What’s really happening is that Estée Lauder Companies and Piper Jaffray are really giving a lesson in new versus old guard. An established name is no longer necessary if a brand is not adapting to the current generation.