In 2007, a small team of experienced business people came together with a shared vision and ambition to create a new brand in the cosmetics sector that built shareholder value and brought a new dimension to a congested marketplace. The team believed a new market space existed but they didn’t know the precise form or shape of the business they were going to grow.
The cosmetics sector was worth £1000 billion in the UK in 2006, split across the core product areas of face, eyes, lips and nails (Source: Mintel). Within this value, £330m sat at the ‘premium’ end with 24.5% value growth predicted to 2011. While the size of the market and its growth prospects demonstrated a lucrative opportunity and clear direction for the positioning territory of the proposed brand, the team knew there were several challenges and strategic decisions to be made before the brand could be formed, developed or launched:
How to:
How to:
• create a new brand in a market dominated by large, global brands with significant marketing budgets, strong trade relationships and well established retail channels
• build brand affinity and encourage trial with consumers in a sector where individual product loyalty has traditionally superceded loyalty to an overall brand proposition
• motivate and engage a challenging trade audience bombarded daily by new cosmetics ranges and operating under very tight retail sales KPIs
• launch a new, premium brand against a backdrop of extreme economic uncertainty (Q3
2008) for both trade and consumer audiences
The client realised that in order to address all of the above challenges they required a clearly defined brand positioning; product range and business plan with a supporting customer engagement strategy to create strong and immediate interest from both trade and consumer audiences.
3 Project background
The client team approached Propaganda for professional support to help address the identified opportunities and challenges at the earliest stages of the business concept. Propaganda was specifically briefed to provide strategic recommendations with reference to the brand positioning and profile, product ranges, NPD and customer engagement strategy for the new brand.
Upon consideration of the brief with the client, we recommended a bespoke Discovery programme that involved a comprehensive and rigorous study of market dynamics, consumer needs and trade motivations to ensure the recommendations were made from a position of knowledge, rather than assumption. The subsequent programme was instrumental in the creation of the Illamasqua brand and its long-term strategic direction.
4 Consulting activity
The consultative engagement, which continues to this day, was formed on the premise that we needed to understand the market at a 360° degree perspective in order to make accurate and insightful recommendations.
4.1 Scoping the market
The client team approached Propaganda for professional support to help address the identified opportunities and challenges at the earliest stages of the business concept. Propaganda was specifically briefed to provide strategic recommendations with reference to the brand positioning and profile, product ranges, NPD and customer engagement strategy for the new brand.
Upon consideration of the brief with the client, we recommended a bespoke Discovery programme that involved a comprehensive and rigorous study of market dynamics, consumer needs and trade motivations to ensure the recommendations were made from a position of knowledge, rather than assumption. The subsequent programme was instrumental in the creation of the Illamasqua brand and its long-term strategic direction.
4 Consulting activity
The consultative engagement, which continues to this day, was formed on the premise that we needed to understand the market at a 360° degree perspective in order to make accurate and insightful recommendations.
4.1 Scoping the market
At the first stage there was a requirement to validate and quantify the size of the market opportunity for a new brand. Propaganda interviewed market analysts and retail experts to more accurately size the premium market opportunity and provide insights into the key consumer trends that would influence decision-making.
The key insights
• The macro trend of ‘premiumisation’ (where consumers seek to reward and indulge themselves with premium brands) remained strong and relevant even in challenging economic circumstances.
• There was an equally strong appetite amongst retailers to maintain a compelling premium brand range in their stores
• The overall market was dominated by four key brands who hold over 75% of the market between them
The recommendation:
The market opportunity existed; we now needed to gain consumer insight to define the right brand positioning.
4.2 Getting underneath the skin of the consumer
Propaganda designed a two-stage consumer research programme to deliver robust consumer insights to the client.
Stage one: Creative workshops with premium make-up consumers to probe experiences, perceptions, aspirations, usage (frequency & occasion) and potential opportunities for a new brand.
The key insight: Women were extremely emotionally connected to the act of making-up, but there was little emotional connection to the brand they purchased. Consumers recorded ownership of as many as 32 brands in their cosmetics bag (up to 20 used daily) yet all were willing to switch to other brands.
The recommendation:
The key insight: Women were extremely emotionally connected to the act of making-up, but there was little emotional connection to the brand they purchased. Consumers recorded ownership of as many as 32 brands in their cosmetics bag (up to 20 used daily) yet all were willing to switch to other brands.
The recommendation:
• Take a brand-led (versus product-led) approach to launch and rollout
• Establish an emotional connection with consumers. They have an appetite for it
Stage two: Recruited ‘early adopter’ consumers in the confidential environment of friendship groups to glean insights about their most intimate hopes and desire thus enabling the brand to build a credible emotional connection.
The key insights: • An overwhelming desire for a cosmetics brand to help consumers visibly demonstrate their desire to standout with extreme looks (e.g. fetish & glamour/burlesque)
• A clear segment of consumers who wanted to convey their ‘alter-ego’
• Consumers sought support and advice to achieve these ‘alter-ego’ looks
The recommendation: • Create a brand that directly and explicitly tapped into the consumer desire to bring their ‘alter-ego’ to life
• Support consumers with professional advice on product application (in-store demonstrations, on-line videos, professional master classes)
4.3 Building the trade dialogue
Propaganda knew trade engagement was critical for initial distribution and rollout as well as long-term development and growth prospects. We conducted confidential interviews with buyers from leading UK cosmetic retailers probing their perceptions, needs, views on opportunities as well as testing the brand hypothesis.
The key insightThe primary theme was a concern about the dominance of a small number of global brands in the sector. The trade wanted a brand to launch with a differentiated proposition to provide them with strong competitive leverage (versus launching another ‘me-too’ offering). In short, they wanted a new brand to ‘shake things up’.
The recommendation: • Provide retailers with a differentiated and consumer validated proposition, creating new space in the premium category
• Offer them competitive leverage
4.4 Building best-in-class products
The new brand needed to find a superior and successful manufacturing partner that could deliver the brand proposition, as well as meeting the challenging demands of the UK retail market. We sourced and shortlisted a number of potential partners.
The solution
The solution
A clear contender emerged to work with the brand team. Kryolan had over 80 years experience and a strong reputation for developing cosmetics for the exclusive use of professional theatre and film make-up artists.
Kryolan were the perfect fit for the new brand for three reasons:
• Ability to create the strong pigments desired
• Premium quality of their manufacturing
• Absolute focus on the professional market.
• Ability to create the strong pigments desired
• Premium quality of their manufacturing
• Absolute focus on the professional market.
By appointing them as partners, our brand broke new ground by being able to truly substantiate the use of the word ‘professional’.
4.5 Brand development through differentiation
Following all stages of the research we now needed to fully develop the brand concept. Propaganda teams worked together to translate the research insights into a brand that could be seen, heard and touched.
Positioning
From a consumer perspective, the emergence of their alter-ego was most associated with night-time. We saw an opportunity for the brand to directly tap into this insight. The new brand was explicitly positioned to focus upon the night-time; a first in the cosmetics industry.
Naming and identity
‘Illamasqua’ exuded a mysterious and alluring personality. The visual identity demonstrated the sophistication, seduction and darkness of the brand personality. ‘Illamasqua, make-up for your alter ego’ was born.
Launch Propaganda created a differentiated brand launch and implementation plan (trade and consumer) to build immediate awareness of the brand, stimulate interest and encourage trial.
4.6 Testing the proposition with the professionals
4.6 Testing the proposition with the professionals
During the final stage, Propaganda shadowed some of the country’s leading professional make-up artists on shoots and assignments to gain first-hand feedback about the brand. The professionals were extremely positive about Illamasqua and freely offered their endorsement. This, combined with the professional status of Kryolan, has allowed Illamasqua to legitimately claim its position as the first and only professional cosmetics brand in UK retail.
4.7 Keep moving forward
To ensure that Illamasqua stays at the forefront of the premium cosmetics sector, Propaganda has developed an NPD process that fuels product and range innovation. A cross functional ‘art team’ has now been established to inspire and inform every stage of new product design. The team brings together artists, musicians, professionals, media and marketers to work with consumers in fuelling the NPD pipeline for the brand.
4.8 Timescales
4.8 Timescales
The Discovery programme began in October 2006, with strategic planning commencing in May 2007. The brand was fully launched via an exclusive retail listing in Selfridges, Oxford Street in November 2008.
4.9 People involved
4.9 People involved
The programme was sponsored by the Chairman at Propaganda and jointly led by the Planning and Creative Directors in the firm. Researchers, business strategists and creatives supported the lead team.
5 Success factors and challenges
Though only 13 months into trading, Illamasqua has already delivered a strong set of results from a standing start:
Though only 13 months into trading, Illamasqua has already delivered a strong set of results from a standing start:
Sales • Wholesale sales £2.2m 2009 (retail £3.2m)
• Wholesale sales predicted to grow to £6.3m in 2010 (retail £7.5m)
• Online sales (via illamasqua.com) will achieve £800k during 2010 (£375k margin contribution)
Distribution • Exclusive, high profile launch in Selfridges, Oxford Street (success fuelled rollout to other Selfridges stores and stimulated further trade interest)
• UK distribution in 8 stores (Fenwick, BT2, Selfridges, Debenhams and asos.com
• Successful, high profile launch into 28 Sephora leading stores across the USA (August 2009)
• Launched into Bloomingdale's Dubai secured for Q1 2010
Profile • Trade feedback shows that Illamasqua is as a serious competitor to L’Oreal, Estee Lauder and LMVH “the most exciting event in make-up for 25 years” (Source: Selfridges)
• Illamasqua NPD has been widely celebrated by the media as a “cult new beauty brand” (source: Grazia)
• Blind product testing with consumers outperformed MAC (biggest market share) 4 to 1
• Illamasqua is endorsed by leading mak-up artists (e.g. Alex Box) and celebrities (Sienna Miller, Lily Allen, Beth Ditto, Courtney Love and Amber Le Bon.
6 The client/consultant relationship
• Wholesale sales predicted to grow to £6.3m in 2010 (retail £7.5m)
• Online sales (via illamasqua.com) will achieve £800k during 2010 (£375k margin contribution)
Distribution • Exclusive, high profile launch in Selfridges, Oxford Street (success fuelled rollout to other Selfridges stores and stimulated further trade interest)
• UK distribution in 8 stores (Fenwick, BT2, Selfridges, Debenhams and asos.com
• Successful, high profile launch into 28 Sephora leading stores across the USA (August 2009)
• Launched into Bloomingdale's Dubai secured for Q1 2010
Profile • Trade feedback shows that Illamasqua is as a serious competitor to L’Oreal, Estee Lauder and LMVH “the most exciting event in make-up for 25 years” (Source: Selfridges)
• Illamasqua NPD has been widely celebrated by the media as a “cult new beauty brand” (source: Grazia)
• Blind product testing with consumers outperformed MAC (biggest market share) 4 to 1
• Illamasqua is endorsed by leading mak-up artists (e.g. Alex Box) and celebrities (Sienna Miller, Lily Allen, Beth Ditto, Courtney Love and Amber Le Bon.
6 The client/consultant relationship
From the outset, the relationship between the team at Illamasqua and Propaganda has been open, challenging and collaborative. While the objectives have evolved over time, the regular dialogue between client and firm, and the involvement of trade and consumer target audiences has ensured well-informed, real-time decision-making and proactive planning for the brand and its long-term growth.
“Since we first started thinking of creating a new cosmetics brand, Propaganda has worked side by side with us. They have challenged and evolved our thinking to ensure that we were fully prepared to take on what is certainly one of the most competitive retail sectors in the world.
They have been instrumental in tapping deep into the psyche of consumers to ensure our brand is based upon real and tangible consumer demands. The Propaganda team have combined an acute understanding of retail cosmetics with independent advice that gives us informed confidence in our decision-making. This is critical at such an early stage in the business evolution.
We are extremely proud of the brand we have built together with Propaganda and everyone at Illamasqua is excited about the future prospects for the brand, both in the UK and abroad.”
http://www.propaganda.co.uk/case-study/illamasqua-the-mca-management-awards-2010-2/#
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