The beauty industry has long been a closed-door operation, with its history of secrecy and skillfully applied smoke and mirrors to peddle products and propagate consumption. For decades, beauty brands have been marketing so-called wonder products and secret formulas to their consumers, designed to transform a buyer’s appearance. Influenced by the claims and marketing buzzwords pasted on products, consumers have been buying with unquestioning belief, putting their trust in a brand without so much as a peek under the hood. Beauty brand transparency was nearly unheard of.

But mindful consumerism is on the rise across the board, and the way consumers shop looks starkly different. Consumers are becoming increasingly aware that they can no longer take a brand’s word for it, trusting that they are looking out for consumers and selling them a reliable product. According to a recent survey, this new breed of the conscious consumer now makes up the largest consumer segment (44%) across all product categories, including personal care and beauty. These consumers are informed, purpose-driven and focused on finding brands that align with their values.

The latest trend is sustainable beauty, and like any beauty buzzword, it’s getting thrown around by brands with little evidence of their visibility into areas like ingredient sourcing, manufacturing, and supply chain backing it up. While sustainability matters to consumers, what appears to carry even more weight is transparency. While greenwashing is still rampant — a marketing gimmick that uses buzzwords and misleading claims to sell products — consumers are now wary of it and demanding more transparency from brands. Consumers want openness, to see these claims substantiated, and to understand the environmental impact before they buy.

Beauty brands are facing a watershed moment to lead with purpose and help consumers live their values through the products they buy. Transparency is no longer a nice-to-have — it’s a need-to-have. Forward-thinking brands are seeing it as an advantage, pulling back the curtain to build stronger relationships with customers. Here’s how.

Demands For Transparency

Consumers now want to know far more information about the origin of ingredients and the methods used to manufacture the formulations, according to Lorraine Dallmeier, biologist, chartered environmentalist, and award-winning CEO of online organic cosmetic formulation school Formula Botanica. The questions Dallmeier hears consumers asking of brands range from the sustainability of ingredients and the carbon footprint of their shipping processes to the payment conditions of people harvesting crops. “Consumers are starting to care and I’m hopeful this will generate a new dawn for the beauty industry,” she says.

According to a recent survey, consumers are in the driver’s seat, with 63% believing they have the power to force brands to change, and a further 78% wanting to exert that power on brands to make society better. Over 80% said they expect brands to take one or more actions beyond their product and business, which included telling hard truths about their business processes and creating positive change in society. It’s clear that it’s no longer adequate to simply create a product and run a business behind closed doors.

Is Transparency Becoming A Marketing Strategy?

“I call it transparency washing,” says Mia Davis, vice president of sustainability and impact at Credo and co-founder of Pact Collective, observing its widespread use as a beauty buzzword and a form of greenwashing. She acknowledges that it is hard for brands to be completely transparent due to very real constraints like supply chain issues, change in suppliers, and a fear of getting called out by consumers. “But we need to be transparent about what we’re transparent about,” says Davis. “If you’re sharing that your product is 80% natural, but not what your packaging is made of, then don’t say you’re fully transparent,” she adds. Davis goes on to highlight that Credo pushes for greater transparency by requesting that their brand partners ask hard questions of their suppliers and formulators. The beauty retailer’s Clean Standard initiative prohibits false claims and asks brands to back up statements on growing practices and sourcing.

Pascal Houdayer, CEO of Orveon, a collective committed to championing a cleaner and more honest industry, is quick to voice concerns that some brands have focused more on marketing transparency rather than executing it. And Dallmeier has seen a proliferation of sustainability webpages with little substance in recent years.

“The majority of such pages are generally filled with blurbs about natural ingredients and philanthropic initiatives, with little to no information about the brand’s actual impacts and projects to mitigate those impacts,” says Dallmeier. She feels this approach comes across as transparency for optics’ sake. “I occasionally wonder if it is becoming a competition of who can shout the loudest about their sustainability achievements,” says Dallmeier, who feels the cosmetics industry is sometimes too quick to communicate half-baked “sustainability” initiatives that don’t have much (if any) impact.

Tracy Dubb, co-founder of Isla Beauty — a multi-tasking skin care brand that prioritizes transparent beauty — feels that transparency can easily become a gimmick, something that a brand retroactively slaps on its product because it’s trendy. “I hope it doesn’t deter from the efforts of people and brands who are really trying to make a difference in the practices and standards of communication in beauty,” says Dubb.

Barriers Holding Beauty Brands Back

As the saying goes, nothing worth doing comes easy, and the same can be said for tackling transparency and the barriers that come with it. When talking about transparency, the big players in the industry and the indie brands both grapple with very different issues. The bigger brands, according to Dallmeier, have the resources to have complete oversight and control of their supply chains, but where they tend to struggle is breaking free of a legacy of secrecy, holding their cards tight to the chest, and leaving consumers in the dark.

By contrast, for a small brand in a giant industry, visibility into the supply chain is a challenge. “It can feel very overwhelming, particularly in the beginning, if you need to discover every single component of your supply chain,” says Dallmeier. This is compounded by the fact that ingredient and packaging suppliers aren’t exactly forthcoming about things like the source of their materials, chemicals used in processing, or if workers are paid a living wage, according to Davis. She goes on to add that bigger brands have much more sway in obtaining information than indie brands, “but it is the smaller brands that are often pushing the envelope and trying to make better, more transparent products.”

For Los Angeles-based Flamingo Estate — a brand committed to tracing each ingredient back to the farmer who planted it — transparency starts with a deep understanding of every single thing it makes. “We took a serious look at our environmental practices and footprint and have shared this with our consumers every step of the way,” says Richard Christiansen, the founder of Flamingo Estate. “One of the things we’ve learned is that if there appears to be a barrier to transparency, it means that something isn’t right, and we should rethink our practices. We want to be honest about our formulas, ingredients, sourcing practices, and packaging, not just for the consumer, but also for ourselves.”

There’s also this notion of “secret sustainability,” whereby companies stay mum on their innovations, keeping them from the rest of the industry. One reason for this might be competitive advantage, while some brands might assume that there is some kind of downside to the introduction of sustainable practices: either a reduction in product quality or an increase in the price of manufacturing, or both.

Transparency Builds Trust

A 2021 survey found that trust is the new brand equity, with 68% of consumers saying it is more important for them to be able to trust all the brands they buy from today than in the past.

The courage and willingness to show a little vulnerability can be a powerful tool in cultivating trust with consumers. Admitting when you’re wrong and being candid about not having all the answers isn’t a sign of weakness, but rather a display of authenticity that sets a brand apart. Francisco Costa, founder of Costa Brazil, recently shared in the brand’s Roadmap for Change that he once thought of sustainability as a simple, easily executed exercise. He admits that he quickly discovered he was very wrong, and that being sustainable involves a great deal of work. Costa is quick to point out that he believes it’s important to admit to consumers what you don’t know and the help you receive along the way to deepen your understanding of the impacts of your business.

Trust establishes brand loyalty, and companies that are open and authentic, and help consumers understand their environmental impact, are uniquely positioned to build an unwavering customer base with the new generation of conscious consumer. The same survey found that 43% said they will stay loyal to a brand they fully trust, and a further 61% said they will advocate for a brand, recommending it to others and talking about it on social media. By contrast, 40% said there are brands they love but no longer buy because they do not trust the company that owns the brand.

Going Beyond The Minimum

For Isla Beauty, transparency extends beyond its formulas and materials and includes its approach to pricing. Calling attention to the fact that the average industry markups run anywhere from six to 10 times product costs, Isla Beauty is open about its consistent two-times markup, clearly articulating its price breakdown for each product. “We absolutely believe that being transparent about formula and materials is the only way to build trust around performance and sustainability,” says Charlie Denton, co-founder of Isla Beauty. “However, if you don’t speak to price, you aren’t telling the whole story. At least not in our case, where we are promising a luxury product at a fraction of the price.” Similarly, skin care brand Eadem gets candid about clinical testing, going beyond FDA requirements to test its formulations and calling out third-party clinical testing labs for the lack of diversity in skin tones.

Technology has a unique role to play in helping brands reach a superior level of transparency, with forward-thinking organizations like Novi and Provenance providing beauty brands of all sizes with the ability to gain transparency and generate trust with consumers. For Guerlain, the quality of its products requires full transparency with no fear, according to Chief Sustainability Officer Cecile Lochard. “Consumers tell us loud and clear of their demand for meaningful products that respect our planet and people,” says Lochard. In response, Guerlain harnessed the power of technology to create the Bee Respect digital platform, designed to help consumers better understand and be informed about the entire lifecycle of Guerlain products. The tool sheds light on more than 500 ingredients in all Guerlain products and highlights 40 suppliers around the world.

Progress Over Perfection

The next phase of the beauty industry requires embracing transparency without trepidation. To make real strides, brands must be willing to put their cards on the table and be transparent with consumers about the progress they are making now, rather than waiting for perfection to communicate their achievements. By the same token, consumers aren’t expecting perfection — they simply want a commitment that brands are stepping up, putting in the work, and doing right by them and the planet. Consumers will reward the brands that bring them along for the ride, through failures and successes.

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Date: September 22, 2022, 7:00 pm