Thursday, June 21, 2007

Bad Beauty Industry?

A while ago I wrote a post called "Beauty Industry: Who Owns What" where I broke down the major corporations running the industry and who owns which brands. My goal was to make people think about beauty products and brands from the perspective of these corporations, which have been extremely successful in marketing each brand and product as unique and effective, when in reality, many products across different brands owned by the same company have the same ingredients or colors, but in a wide range of price points. In the post I never stated whether I thought this was a positive or negative thing, though I think most of the people who commented and e-mailed me about the post tended to lean toward the negative end.

Personally, I have no problems with how the beauty industry is currently organized. A lot of people look at the fact that only a handful of corporations control most of the market and think this is hurting the consumer. But I consider the fact that these corporations have 3 things that small, independent companies don't, which makes me generally trust them more than their indie counterparts:

1. Tons of money for research and development

These corporations may make billions of dollars a year in revenue, but to stay ahead of the game they invest a fair amount of that into research and development. L'Oreal for instance invests 3% of sales in R & D, and I'm sure you'd find similar numbers for Proctor & Gamble, Johnson & Johnson, etc.

The success these companies have experienced is directly derived from the popularity and high quality of their brands and products. In such a competitive industry, each corporation is racing to create "the next big thing," whether it's a more effective product, more cosmetically elegant, better packaging, better color selection, etc. Do these companies sometimes repeat products, essentially repackaging and renaming the same ingredients and changing the prices? Sure. But they can only get away with so much of that, and they have to be innovative to retain their edge over the competition.

There's no doubt that a Mom and Pop cosmetics startup can't make great products (this is how Bobbi Brown started before she was bought out by Estee Lauder) but they definitely don't have the resources to create anything revolutionary.

2. A long tradition of quality and reliability

Brand loyalty is extremely important to every company, but within the cosmetics industry, where the consumer is presented with so many options (one could spend hours in a drugstore just trying to decide between moisturizers), having a brand name that people trust is paramount. These companies work very hard to build up that trust and loyalty, creating lines that people consistently rely on and return to when they're shopping.

It takes a lot of time to build that relationship between a brand and a consumer, and companies know that one bad move can kill that trust. Because they're so huge, I think that these large corporations have far more to lose if their customer base shifts its loyalty to another brand.

Which brings me to my final point...

3. They have far, far more to lose if they seriously screw up

One complaint I often hear is that you can't trust the major cosmetics companies because they use ingredients that are supposedly cancer causing or generally harmful to the body. Again, these are multi-billion dollar companies that (as I just discussed) are based on customer trust and loyalty. They have thousands of employees worldwide and most of them (L'Oreal, P&G, J&J, Unilever, Avon, Elizabeth Arden, Revlon, basically all the big guys except Estee Lauder) are publicly traded. If it came out that something in their products caused cancer, or a similarly horrific health scare, thousands, possibly millions, of people would lose money, and their brand name would likely be tarnished.

For a small company, there's far less at stake and there's less incentive to ensure that their products are perfectly safe.

That doesn't mean I only buy beauty products from these corporations, or that I don't trust independent companies. A number of my HG products come from indie companies, and I definitely think they have their place. I just disagree with the people who jump to the conclusion that products from a mega-corporation are bad simply because it's a mega-corporation and they only care about the bottom line.

Now, don't think for a second that I'm letting these companies off easy. I've expressed my disapproval of many common marketing tactics, particularly the bogus scientific claims that promise miracle-like results, and the fact that higher-priced products are rarely more effective than drugstore brands. I think that the marketers are far too comfortable exaggerating claims, but ultimately the responsibility lies with the consumer to determine where and how she'll spend her money.

Particularly in the internet age, there are tons of resources for consumers to research brands, products and ingredients before they buy. A healthy level of skepticism is especially useful when buying cosmetics, and if you spend the time educating yourself to separate the truthful claims from the marketing B.S., you're in a good position to not waste your money on poor purchases. So don't go blaming Estee Lauder when you realize you spent $195 on a jar of Cream de La Mer that works no better than your $8 tube of Olay moisturizer.


willikat said...

I'd take claims of ingredients causing negative health effects pretty seriously. I am a working beauty editor and I've done quite a bit of research about it. Currently, they cannot directly prove that some of these ingredients are bad for you, but when you read some of what these ingredients are also used for... and then think baout putting them on your skin, and it's absorbed into your body... yikes. If you haven't, check out and click on Skin Deep, it's a great study on ingredients. Also the Campaign for Safe Cosmetics. IF they believe their products won't hurt anyone, why won't they sign? yes, they spend a lot on R & D, but lots of corps do and end up still using cheaper chemical-laden recipes. I also think some corps are socially conscious and do good things. I just would be skeptical and keep an open mind. it's our job as consumers and members of the media.

coco_fiere said...

I am so glad someone put it out there! I've been telling people about the same company, different name thing for years. I had friends and family that only wanted the prestige brands because they cost more and rec'd recommendations in mags. Beauty editors are deluged with freebies to encourage them to push the latest products on consumers and some endorsements are real and some, well....
I worked as a makeup artist for some of the major lines and still only bought most items from the drugstore for my own use. L'Oreal's Color Juice/Lancome Juicy Tubes, for example:One is 7 bucks & the other 16! An educated consumer is the best consumer. Plus, you still look fab!

Meg said...

Great points! In general, I like to go with well-known names for the reasons you mentioned. I've had salespeople and even friends tell me how I should try such and such product from a no-name company because it is all natural and therefore so much better than the products that I am using (which they say causes everything under the sun including cancer).

How do I know for sure what they put into their products? And since when is "all natural" necessarily safe and effective? Anyone can make a website, flyers, and business cards these days. I'm all about supporting small business, but I'm a lot less likely to do so when it comes to lotions, potions, and pills.