The Future of Personal Care
The Future of the Premium Personal Care
Within the scope of our research on premium and luxury goods, we have developed future scenarios for urban consumption in a number of selected industries. One of those is the Personal Care sector, which is a key pillar of the luxury industry. In this article we want to present some of the learning from two extreme scenarios, and what the key implications for industry players are.
The big caveat with future scenarios is that they are often defined based on variables at extremes of a range. And while the likelihood of such a scenario is very low, it helps in terms of visualizing the vectors that support it. To provide an example, there are a number of future cases where we examined a reversed attitude – vis-à-vis today’s – to technology, both in the digital sense and in the industry’s level-of-technology sense. For simplicity we will label this scenario as “Back to the Origins”. In essence, within those urban scenarios, lifestyles will force a less connected, more natural and more organic selection of materials and ingredients, by design. This will challenge the current business model of personal care, by requiring a stretch in the way the products are developed, packaged and distributed. This scenario, within the scope of expectations resulting from our expert interviews, translates into a return of traditional business models and retail channels. For example, there are many similarities with the pharmacies of the XX century: re-usable containers, bulk sales, tailor-made mixes/ dosages based on customers characteristics. Even more considering the hybridization of retail, we could expect personal care brands products to be discovered and trialed in pop-up stores or travelling kiosks, with subsequent and following purchases made on-line, through the facilitation of algorithms or AI-based personal assistants. In this scenario personal care companies should engage more closely in business model innovation, by relying less on modern trade chains and more on personal discovery of brands and products. The risk of being made irrelevant by purchasing algorithms related to AI should not be underestimated.
At the other extreme of “Back to the Origins”, there is clearly a scenario whereby technology fast-forwards, and leaps towards new levels; we will label this scenario as “Techn”. In this context it is likely that tech converge prevails by blurring the category boundaries of complementary industries in the health, wellness and care scenario. Products will become systems, probably including IoT enabled devices and appliances, releasing functional benefits currently belonging to personal care, wellness and OTC care. Technological convergence will allow for fully customizable applications, or tailor-made treatments, which will be remotely advised by on-line experts or advisors. In this context, difficult shopping decisions will revolve around which appliances are best expected to deliver the desired benefits, while the consumable part will be probably automatically re-purchased through the equivalent of a dash-button or an AI enabled virtual assistant. In this scenario, personal care brands are at risk of commoditization, and while glamour and relevance are still very important, tech compatibility will be critical in maximizing the chances of survival. An Open Innovation approach, promoting work with appliances development, or even accelerating and incubating appliances, is most probably the best strategy. The risk is for personal care brands to target niche and/ or closed-appliances technologies, by making themselves too small to be competitive. The edge for industry players stems from the current level of emotional bonding consumers have for their brand, which in the short run will be a strong advantage.
A special mention will be still reserved to Spas, Barber stores, and Coiffeurs, which will probably transform more into a modern channel, as they will become the key physical space for showcasing technology and product care and application, similar to the role cocktail bars play for spirits.
In conclusion, and regardless of the direction of the scenario, there are some key learning and actions that industry players need to be focusing on:
- For personal care new key channels – or, even better, old channels renaissance – will be emerging beyond the model of modern trade. Players should start working on innovating their business models to identify profitable ways of tapping into these channels
- Technological convergence will blur some category boundaries, among – what today are currently – un-related industries: investments in open innovation will become critical to ensure knowledge coming from traditional boundaries of the industry are becoming assets in personal care industry.
- Design, emotional and societal branding will be still key leverages in the short run. And while relevance will be the filter for most consumers, technological availability will also be important.