Brand collaborations and licensing arrangements have taken the beauty world by storm, giving brands access to new geographic markets, product categories and consumers, and providing unique marketing opportunities.
Michaela Seligman, Head of Brand Management at Mishcon’s brand advisory business MDR Brand Management, gives her insights into what makes a brand partnership successful.
Q: Why are we seeing so many collaborations and licensing arrangements within the world of beauty?
A: The FMCG industry continued to grow during the COVID-19 pandemic, despite so much of the world and so many business communities coming to a standstill. This trend was particularly applicable to food and beauty, where consumers globally looked for ways to bring a little bit of luxury into the home. Many beauty brands have capitalised on this growth through collaborations that broaden their reach and find new consumers in places they may not be able to access on their own. Brands in other categories are also finding ways to connect with consumers through entering the world of beauty and creating additional consumer touch points with their audience.
Q: What are some of the key considerations for beauty businesses looking to expand into new product ranges or new geographic markets?
A: Beauty brands should consider key trends in those new product or geographic markets and how their brand could be applicable. For instance, a Western beauty brand might look to develop a green tea product portfolio for a Japanese market. There are so many examples where we can see brands thinking creatively to reach new audiences: Urban Decay recently partnered with HBO on a Game of Thrones-inspired make-up collection, complete with metallic eyeshadows and ‘sword’ brushes; Carex launched a ‘Love Hearts’ range of products as a ‘Fun Edition’; and ASOS drew on childhood memories with its Crayola collaboration – encouraging us to have more fun with make-up.
Q: Talk us through one of your recent beauty collaborations, the rationale behind it and why it works.
A: Our work with the Amy Winehouse Foundation is all about celebrating and protecting her iconic style and music legacy. A portion of the proceeds goes to support the charity, which was set up by Amy’s family in her memory to inspire children and young people to build their self-esteem and resilience. Illamasqua makeup products were found in Amy’s own make-up bag, so it felt natural to work with them to bring Amy’s brand into the world of beauty. Amy’s legacy to redefine beauty, break the modern mould and empower people to be themselves was a natural fit for Illamasqua, which is known for encouraging others to embrace their individuality.
The first launch of the collaboration was developed through working closely with Amy’s family to create the Illamasqua x Amy Winehouse Beauty Box, paying homage to Amy’s beauty legacy. The box included six of Amy’s go-to essentials to recreate her iconic look. The second drop comprised seven limited edition individual products in exclusive shades and formulas. The ‘Camden Collection” makeup range was inspired by Amy and the town she loved. It was created to be a testament to Amy’s bold, unique and iconic beauty and as a modern take on Amy’s look to appeal to the everyday consumer as well as Amy’s dedicated fans.
Q: We’ve touched on how collaborations or licensing arrangements can be a useful route for beauty businesses looking to expand their brand to other geographic markets or innovate outside of their core products. How does this work in practice?
A: I’ll illustrate this using Revlon as an example. We have worked with Revlon to activate licensing deals across LATAM, North America, Australia, Japan and Europe to create new consumer touchpoints and new revenue streams in adjacent categories. This involves sourcing best-in-class partners across several product categories that are in keeping with the Revlon brand but allows consumers to expand their connection to the brand and shop the brand in new aisles.
We have built on Revlon’s core equity in beauty and colour to come up with new innovative products such as Oral Cosmetics and Teeth Whitening. Moving from lips to teeth feels like a natural expansion for Revlon but we are focusing on the beauty side of oral care as opposed to the technical side, as this is where the brand equity lies. We are also considering new, natural and clean ingredients that are typically used by premium beauty brands – by bringing these to a mass market brand such as Revlon we can create a real point of difference in the market. We are now also looking to expand into skincare, the fastest-growing segment within beauty, with a nod to cosmetics. For example, we developed a make-up base face mask to be applied before wearing make-up.
So you can see how every idea is carefully curated to maximise revenue and gain competitive advantage while ensuring that the brand retains its authenticity and doesn’t alienate its core market in any way.
Q: Who generally bears the cost on these types of partnerships or arrangements?
A: Typically, the beauty brand, as they are generally the party that is developing and manufacturing the products on top of paying a royalty to the brand that is being licensed. They can normally charge a premium for licensed products vs own label, which can help to cover the additional costs. While the brand owner tends to be the approvals gatekeeper and signs off on every stage of the design and approval process, it’s important that the partners work collaboratively in order to let the ‘licensee’ explore the brand creatively.
Q: Any advice for a beauty (or other) business looking to grow their brand?
A: Think outside the box and consider which categories your consumer base would be excited to see you enter. A loyal brand customer will automatically be drawn in, and it also provides an opportunity to bring in new customers. Brands should be open to exploring new ways to extract value, utilising their IP through long-term strategies to grow.
