Despite its obsession with the new and innovative, the beauty industry has remained surprisingly stagnant over the past half century, with 70 percent of the $60 billion makeup market still under the control of just 10 conglomerates.

Seemingly, most brands don’t recognize that buyer behavior has changed drastically. Whereas older generations of consumers pledged loyalty to one or two department store beauty counters, today's young women are comfortable going on different websites to purchase a product they only just learned about from a YouTube vlogger.

Many entrepreneurs are taking advantage of this consumer attitude by launching direct-to-consumer beauty and grooming brands like Glossier, Stowaway, Bevel, Onomie and Context that speak to the millennial consumer. And despite their rule-breaking business models - most rely on single-channel e-commerce sales, offer just a handful of SKUs and replace traditional advertising with social media and influencer relationships - they're building buzz that any legacy brand would envy.

The decision to go direct-to-consumer, " allows you to really get to know your consumer, because you're getting that direct feedback; you are able to cut down on inventory cost because you're only building on demand; and you're able to move really quickly and customize the line," said Karen Grant, NPD Group global beauty analyst.

Consumer behavior has changed in the beauty industry. Adapting your products to customers’ expectations regarding size, color, shape and ingredients is crucial. "Women today have different needs than we have had in the past, but beauty companies haven't necessarily been the most reactive to that," said Emily Weiss, creator of the popular Into the Gloss beauty blog, who launched the skin-care and cosmetics company Glossier in October 2014. "We wanted to create a very democratic movement, and the channels most fitting that goal were direct, digital ones." Glossier states that they are building a modern beauty brand inspired by real life. They’re creating new formulated products based on consumer feedbacks from Into the Gloss blog posts, followers’ friends reviews and high-low culture feedbacks of fashion and art - all coming from the Internet. The company's chic pink-and-white packaging was designed with the visually obsessed Instagram set in mind and can be seen in many an influencer's feed.

Solution-based beauty was also the basis for launching Stowaway, a year-old collection of "right-sized" cosmetics. The idea for the brand was sparked when Julie Fredrickson, a former branding and marketing executive, and Chelsa Crowley, a makeup artist who has worked with Estée Lauder, voiced a mutual frustration over not being able to fit many of their favorite products in their handbags, or finish them before their expiration dates. Stowaway came up with products half the size and half the price of the ones we got used to.

Rather than spending dollar millions on traditional advertising, Fredrickson and Crowley have focused on earned media and building relationships with mom and professional blogs.

Cosmetics industry is not merely about women, though. Bevel, a shaving system for men of color, has created great buzz since being launched by Tristan Walker, a former Foursquare executive and current CEO of Walker & Co. It recently led a $24 million funding round and boasts big-name investors like Nas (who is also an official brand ambassador), Magic Johnson and John Legend.

Like Glossier and Stowaway, Bevel was created to fill a niche in men’s skin care market - the lack of quality ethnic grooming products. "I was tired of always having to reach for the bottom of the shelf with dirty packaging," Walker said.

The company focuses on digital platforms, Bevel's website (as well as its online magazine, Bevel Code) is filled with first-person testimonials aimed at building trust, while new buyers receive an email from Walker himself describing his experience.

While these new brands are far from threatening the big players' bottom lines, there's no doubt that they're gaining steam. These smaller companies are proving that they don't necessarily need major validation and ads to create the buzz and attract buyers.

Sources:
www.adweek.com
www.glossier.com