The Ivey Business Review is a student publication conceived, designed and managed by Honors Business Administration students at the Ivey Business School.
Not So PhotoReady
Since 1932, Revlon has been revolutionizing the beauty industry with the mission to prove that “the American woman could be as compelling and glamorous in everyday life as any starlet on the silver screen.” From modest beginnings selling nail polish, the company has since expanded into cosmetics, skin care, fragrances, and personal care items. Despite its early success, Revlon has struggled in recent years as an increasing number of competitors have entered the market. The company must explore new strategies in order to regain its leadership position in the ever-changing beauty industry.
The global cosmetics market was valued at $508 billion in 2018 and is expected to reach $758 billion in 2025, growing at a compound annual growth rate of 5.9 per cent. The industry is fairly consolidated, with 45 per cent of the market dominated by large multinational companies that operate across various product segments. However, the rise of digital platforms and the increase in consumer willingness to explore new brands have lowered industry barriers to entry. As a result, the market is becoming more fragmented; independent brands experienced 42.7-percent growth while traditional brands declined by 1.3 per cent in 2016. Established and new brands alike are now fighting to cater to changing consumer tastes by advancing unique value propositions.
As a large player in this market, Revlon’s core brand accounts for approximately 40 per cent of the company’s overall revenue. The Revlon brand focuses on attracting mass appeal, with products in large retailers and convenience stores. This has allowed Revlon to compete as a one-stop-shop for the holistic cosmetic needs of each consumer.
However, with changing consumer tastes and the rise of new digital channels, traditional brand strategies have given way to a new cosmetic environment shaped by influencers and brand advocates. For example, the industry’s direct-to-consumer beauty disruptor, Glossier, targets millennial women through social media. With digitally-created content and “Instagram-friendly packaging,” Glossier has succeeded in facilitating word-of-mouth marketing and in capturing a sizable slice of the global beauty market. Cosmetic giant Estée Lauder has also recognized the need to cater to changing consumer needs. In 2016, it established a Customer Engagement Centre of Learning focused on gathering insights from diverse customer profiles to drive tailored innovation. Using these insights, Estée Lauder has evolved its online and retail experiences to provide unique customer engagements through virtual product trials and pop-up stores. The success of these competitors largely stems from their positive online presence and customer-centric marketing.
Revlon’s failure to adapt to changing trends in the industry has caused significant financial loss. Despite implementing a new brand-centric reorganization plan in 2017, the Revlon brand realized a $76-million gross profit in the first nine months of 2018 compared to $98 million realized over the same time period in 2017. While the company has attempted to improve its financial position through an Optimization Program, these cost-saving efforts are ill-aligned with the company’s long-term growth goals. Revlon must innovate to reestablish its position in the ever-growing beauty market.
Revlon previously attempted to address this in January 2018 with the launch of the Live Boldly campaign, starring ambassadors such as Ashley Graham, Imaan Hammam, and Raquel Zimmermann. The initiative aimed to inspire women to “live unapologetically” and to “know no boundaries.” Despite the positive messaging, the campaign failed to materially affect the fortunes of Revlon. The message of female empowerment has unfortunately become commonplace across the fashion and cosmetics industries. Simply projecting values through ambassadors is no longer sufficient; it will take action-oriented support of social justice campaigns to create the kind of positive brand association that can build a distinct brand identity.
A New Face for Revlon
In an age where perceptions of beauty are often defined by age or persona, a positioning shift targeting the professional working woman presents a unique opportunity for Revlon. To successfully capture this audience, Revlon should consider partnering with sites and organizations that target working professionals.
Platitudes are not enough; Revlon must demonstrate a real commitment to this market segment and boldly announce its intentions to the public. This can be best achieved through a three-step process: a large-scale marketing campaign to rebrand Revlon’s core identity, industry partnerships to reinforce its commitment as the cosmetics brand of choice for working women, and local
partnerships with collegiate organizations or professional networks to include the younger and mature segments of the working professional. Such partnerships would allow Revlon to more clearly associate itself with professional brands while creating channels to directly interact with these consumers.
To initiate Revlon’s rebranding, the company should revisit its origin, where its 1950s Fire and Ice campaign strived to “show the American woman that she could be as compelling and glamorous in everyday life as any starlet on the silver screen.” In 2019, Revlon should transpose this message and “show the working woman that she can be as strong-willed and glamorous in everyday life as any executive in the boardroom.” This basic revisit of the company’s founding principle would send a strong message that Revlon has embraced a new vision for its brand. This would be followed by a strong marketing campaign featuring prominent female professionals that women would look up to as role models.
Target Demographic Traits
The second pillar of this implementation should be partnerships with adjacent brands that cater to the professional market. These brands may range from professional development groups to recruitment platforms. LinkedIn stands out as an ideal partner in this context. A more specific marketing initiative that could arise out of this partnership may take the form of a campaign targeted at young females entering the job market. For example, when a young female professional signs up for LinkedIn, Revlon could send a “Get Professional” kit with two of its most successful products as well as style guide tips. LinkedIn could also complement the women’s empowerment initiative through online mentorship groups and targeted offerings from LinkedIn Learning. Both brands aim to empower individuals to connect, feel confident, and reach their goals. The partnership with Revlon would allow LinkedIn to better engage female professionals while becoming involved in a meaningful corporate social responsibility initiative.
Other potential partnerships could take form through industry groups to reinforce Revlon’s position as a brand that empowers the working woman. Examples of such groups include Women in Capital Markets, Ellevate Network, and the International Association of Professional Women. Revlon could provide the members of these groups with co-branded products, offer discounts on Revlon products, or provide perks from other partners in the network such as LinkedIn Premium.
Capturing Customer Life Cycle
Revlon must also take care to not alienate the peripheries of the professional market, namely students who may not yet see themselves as part of the job market, and mature women, who may feel ostracized if campaigns focus solely on young professionals. It would thus help to enter targeted partnerships with organizations that specifically engage with young and mature women to ensure that Revlon’s message is just as compelling to these segments as it is to the core market. Groups that are characterized by these traits include campus clubs, entry-level job organizations, and school program services offices. On the other end of the spectrum, partnerships with women’s executive networks or groups that help women with workforce reentry would maintain Revlon’s brand positioning with mature women.
A Brand New Future
There is no doubt that the cosmetics industry is highly fragmented and rapidly evolving. Although Revlon was once viewed as the pioneer of the industry, its brand image is now lagging far behind its competitors and is in desperate need of modernization. A revolutionary rebrand combined with strategic partnerships would allow the brand to abandon its mass-market appeal, form a niche within the market of working professionals, and
develop a brand that resonates with its target audience. These strategic recommendations would allow Revlon to maximize customer lifetime value, improve brand association, and ultimately reestablish its presence in the industry as a revolutionary in beauty for years to come.