Natural Cosmetics Conference focuses on trends and the future

Picture: Danila Brunner, NürnbergMesse, Wolf Lüdge, Natural Leadership, Elfriede Dambacher, Naturkosmetik Verlag announced that Lüdge will be the new managing director of Naturkosmetik Verlag from 2017 and that in 2017 he willl take over the organisation of the Conferenc. Photo Karin Heinze

On 27 and 28 September around 240 actors in all aspects of the cosmetics industry met at the Natural Cosmetics Conference in Berlin. For the ninth time the participants from manufacturing and trade and service providers, plus representatives from the specialist press, sought information on the latest developments and trends. The spectrum of topics ranged from online trade, digitisation, change in values and communication to consumer transparency and the controversial raw material palm oil. An examination of the US market was interesting for companies intending to market their products in the USA.

Graphic © Naturkosmetikkonzepte: Growth in sales of natural&organic cosmetics and traditional cosmetics

At the beginning of the Conference in the Ellington Hotel in Berlin the industry expert and programme director of the Conference, Elfriede Dambacher, used her “natural cosmetics radar“ to go into the development of the market and the challenges the industry is facing. After years of substantial growth of controlled natural cosmetics, turnover could well reach around 1.2 billion euros by the end of the year. However, the speed of growth has slowed compared with last year (+10%) to roughly 4%, whereas nature-based cosmetics are again growing more rapidly in 2016 (+6.7 %). According to Dambacher, the demand for natural cosmetics is far from satisfied, but she finds there is a great deal of catching up to be done in respect of innovations in product development, the product ranges and the attractiveness of retail outlets. “The trade reacts too slowly to changes in demand,“ Dambacher declared. She said that new brands are often available only in the online trade. The internet fills the gap in the case of products that the fixed-location trade rarely offers, and that, she maintained, has serious implications.

Digitisation in the trade and communication

Several speakers addressed the theme of online trade and related issues, from the changing values in society, the digitisation of communication to tracking systems and "mobile product guides", that allow the stationary trade to approach customers with a personalised message.Trend researcher Pascale Brousse, the owner of the agency Trend Sourcing Paris, illustrated the changes occurring in the private sphere and, therefore, in the shopping behaviour of today's customers. She gave many examples of what holistic beauty means to people today: new products, new types of shop and, of course, the internet specifically target the younger generation via visual imagery and viral marketing. Health and wellness, fair and sustainable, free from cruelty to animals and the claim “conscious makes beauty“  commuincate, according to Brousse, messages that are impoortant to today's critical consumers. Also, the link between food and cosmetics is en vogue: she gave superfoods like kale as an ingredient and glutenfree cosmetics as examples. The channel for individual lifestyles is Instagram. The trend researcher said the trend is moving from “commitment to a brand" to “commitment to health".

Picture: Pascale Brousse is a trend researcher in Paris. Photo Karin Heinze

Online trade pro or contra stationary trade

Current data on the rapidly growing online trade in the natural cosmetics sector and the ensuing challenges for the stationary trade were substantiated by the results of a study by the Institut für Handelsforschung IFH . The value of turnover in the online trading of cosmetics and personal care products was given by Dr Susanne Eichholz-Klein as nearly 1.2 billion euros. According to the calculations of the IFH, the figure for natural cosmetics is about 46 million euros. Elfriede Dambacher said the online trade is currently growing about four times as fast as the bricks-and-mortar retail trade. The good news: the study is evidence that natural cosmetics can continue to profit from the megatrend health and is on a growth trajectory – 78% rated the products as healthy. Compared with the classsic customer buying cosmetics, people interested in natural cosmetics feel they need a lot of information. Surprisingly, the internet plays a less prominent role in this at the moment. Over two-thirds of consumers still go to a specialist store in search of advice. Recommendations by friends and acquaintances are in second place, but online test reports and test assessments come in fifth and twelfth place. However, the next generation of smartphone users and internet-savvy people, the so-called digital or smart natives, approach the matter differently: they get their information online, with blogs being an important source. The IFH study has found that 60% of blog readers have bought cosmetics on the basis of a positive assessment. Given this situation, the majority of people nevertheless buy in the stationary trade.

Picture: Dr.Susanne Eichholz-Klein from German Trade Institute IFH. 60% of blog readers have bought cosmetics on the basis of a positive assessment. Photo Karin Heinze

Taking advantage of digitisation

Keynote speaker Prof. Dr. Jo Groebel, Director of the Deutsches Digital Institut in Berlin, argued in favour of gradually embracing the digital world: "For example, familiarise yourself slowly with the social media and make private use of  Facebook  before you plan presenting your firm." The level of the digital communication has to appropriate for the individual and the company. The advantages of appearing online are cross-border communication, not being dependent on opening hours and the possibility of mobile ordering. She added that with the help of Facebook etc. you can gain a lot of attention with a small budget, provided however that you bring together the different components - information, communication and distribution. The media expert emphasised the point: convergence is what is called for.

Picture: Prof. Jo Groebel spoke in detail about digitisation. Photo Karin Heinze

In contrast, Benjamin Thym, the inventor of the mobile product guides barcoo and co-managing director of the Offerista Group, puts great emphasis on personalised digital offers. The data gained by customer tracking should make offers possible that are tailor-made to satisfy the wishes of customers. He said he was convinced that this approach can bring back customers to the fixed-location retailer and that digitisation offers the chance of a future for the retail trade.

Picture: Benjamin Thym CEO of Offerista Group. Photo Karin Heinze

Different rules for natural cosmetics in the US market

Forum A dealt with the world's biggest natural cosmetics market, the USA. Kora Lazarski from the market research company SPINS (USA) presented the latest market data and valued the turnover of natural and nature-based cosmetics in the USA at 19 billion US dollars. High growth rates are the order of the day since the big food chains like Walmart, Target and department stores like Sephora and Macy´s alongside the independent specialist stores turned their attention to natural cosmetics a few years ago. She said that the widespread purchase of natural cosmetics has now arrived in the mass market, which is largely down to e-commerce. SPINS categorises natural cosmetics as Originals (e.g. Burt´s Bees, Dr.Bronners), Mainstream Pioneers (e.g. Acure, Pacifica, Yes to) and The New Generation (100 % Pure, Rethink and Motherdirt). She pointed out that the Free-From trend is also very important in cosmetics. Glutenfree is practically a lifestyle.

Picture: Kora Lazarski from market researcher SPINS gave informations for the natural&organic cosmetics market in the US. Photo Karin Heinze