The Evolution of the Beauty Industry, How Brands and Retailers Can Thrive

Beauty Trends Q&A Part One with Daniela Ciocan

CEO of Access Beauty Insiders and Unfiltered Experience

Ali Bennett: By way of introduction, we met you through the Beauty Matter Next Awards. We would like to thank you for being gracious with your time and expertise. You are an amazing role model as a female entrepreneur and beauty expert. My first thought was that I wanted to share your knowledge and insights with our audience as they could benefit from your experience.

Daniela: Thank you for having me. It’s always lovely to connect. You know, in my career, one of the things I really excelled at is building an amazing network of friends, industry professionals, and like-minded thinkers. I love chatting. I am always happy to connect, to share ideas as it energizes me. So, I’m glad we connected and am happy to be here.

Ali: Tell us about your career and what led you to the beauty industry, for those that haven’t met you before.

Daniela: So I fell into the beauty industry just by sheer coincidence. As a typical teenager, I was not sure what I wanted to do. I graduated high school and it was like what is next? Oftentimes it’s your parents that lead your career path. And, my parents tried to do that. They tried to steer me into accounting, which was definitely not suited for my personality and my likes.

So I dropped out of school and started working. I was hired at a department store selling beauty products behind a counter, and I became fascinated with the world of beauty and cosmetics. At the time Revlon’s Ultima II was developing products that the consumers loved. Customers would come in to buy their favorite products and they were constantly out of stock. This happened so many times and it implanted in my mind an idea. I started to wonder who makes decisions of this nature? Why don’t they pay attention to sales trends and data? And so that’s what really hooked me on the industry.

I started doing research and low and behold, the Fashion Institute of Technology (FIT), in New York city, offered a bachelor’s degree in marketing for cosmetics. Now they have a master’s degree as well for cosmetics marketing. I enrolled, graduated magna cum laude, and to this day, I love, love, love the industry. I was very blessed, to be honest, I worked on the brand side. I ended up working for the fourth largest Japanese cosmetics company, Kosé, and I was part of their launch and inception into the US Market.

I was able to advance very quickly and have a lot of responsibility. And from there on, after nine years of doing that, I moved to Las Vegas and there was this trade show called Cosmoprof that needed TLC. They wanted executive level experience. I knew nothing about trade shows and exhibitions, but I was passionate about beauty. My background working with international companies was also beneficial. I took over the helm and management of Cosmoprof, staying there for 13 years. During that time, I was credited by many for helping steer the indie phenomena helping many brands connect with retailers. I’ve created all of the programs that the show is known for to this day. The show is now one of the top 100 largest exhibitions in the country.

I had a lot of fun and became very involved in the industry. I served on the boards of CEW and the Independent Beauty Association, and worked with many trade magazines. Afterwards, I launched my own event and I did it for a while partnering with a great group of industry professionals but then COVID hit. So, I decided, well, the decision was made for me to put that on hold.

Instead I partnered with Beauty Matter to launch the Next Awards Summit, which is happening this week in LA starting on September 15th. I also have a consulting business working with many smaller brands as well in advising and counseling them.

Ali: How do you think the industry has changed or evolved since you started?

Daniela: A lot!

When I started, the industry was very one dimensional. The brand controlled everything. They put out this beautiful, flawless image. We had these idealized pictures of beauty in magazines. The industry was controlled by multinationals by and large and it was very hard to break through. Then, slowly by slowly, we started seeing dermatologists and some professional makeup artists like Trish McEvoy and Bobby Brown, and then MAC came to the forefront presenting small collections. They were so unique and there were a few retailers that really jumped on the trend and nurtured these kinds of brands. You had Henri Bendel, who was known for always covering these niche beauty brands that were coming to the forefront. He had worked at Bergdorf Goodman, Barneys previously. There were a couple of retailers that were endorsing these types of brands. That really opened up the door to what is now known as the Indie Beauty space. The other thing that was very unique to that time, you could only communicate and connect with consumers through magazines so, PR was king. If you wanted to do business in beauty, you had to have an amazing publicist and cater to the editors, because that was the only way that you could really tell your story and connect with consumers.

Ali: Do you think it’s easier or harder to build a brand in a digital world now that PR is not as prominent?

Daniela: Not as much, I do not mean to offend PR professionals. I think it’s a mix. Honestly, we’ve seen direct to consumer come to the forefront and there’s so many brands that are very successful in controlling their own destiny and creating communities and amazing at building businesses online. But it’s become so much harder because it’s so competitive. There’s thousands of beauty brands out there and hundreds of products that come to the market every day and they’re all competing for the attention of the same beauty consumer or “beauty junkie” as I like to call it.

And, you have so many social media platforms nowadays. In the beginning, we had Facebook and then, we had Instagram, then Pinterest, YouTube, Snapchat and, you know, we keep adding, TikTok and now Reddit and gaming sites and eSports. And the metaverse.

So, there’s too much now. Brands have to decide, where do I put in my efforts? Where do I spend my energies, my money and how do I tell the story creatively on the platforms that I choose? You have to make a cognizant decision as to what you want to pursue and what you willingly give up. Because you cannot do it all. It’s too expensive. It takes too much.

Then the last piece to the puzzle is that, as a new brand, the cost of doing business online is so much higher. Again, you’re competing with so many brands. You spend money trying to get in front of that consumer, that online consumer and it’s so much harder to retarget these days, you know, because of the iOS policies, privacy policies. It has become more expensive to compete online. It’s not as efficient. Certainly, it’s a toss up today, anyone can use social media, but how do you amplify your message? How do you connect with the right audience?

Ali: I totally agree. What is most impactful in driving sales?

Daniela: If you want to talk about the store environment and how brands compete there, I think you have to look at macro trends that we’re seeing, particularly when it comes to technology. You, at AlgoFace have covered this extensively. Through my lense, AI is being used at a store level. And it is so beneficial in many ways to the consumer because having AI at a store level allows consumers to identify products from the entire store assortment, that work for them, their right shade, the right product ingredients, which sorry to say, but it beats the ability of a store associate to advise you because you have store associates that are not necessarily trained or understand all the product on their shelves. Some of them are affiliated with brands. So they wanna skew you, you know, to specific products, but with the aid of AI, you don’t have that issue. The consumer truly gets what is appropriate and best for them.

When it comes to technology, retailers, like Ulta and Target, are starting to utilize AI to drive merchandising decisions. They now have the ability to surface data to benefit the buyer. Let’s be honest, how often do you have buyers that fall in love with a product, with a brand, and give it a lot of TLC. But now you can use AI to identify what’s working for a specific location. You can get away from that same planogram and same products being used across the board on a nationwide basis. You can really create a really unique footprint for stores so that it’s in line with their community, with their consumer, with their weather patterns.

Utilizing AI and technology is going to make the whole in-store experience that much better for consumers.

Ali: I think it’ll be an interesting shift when more retailers start to use AI and start to use technology. Also, there’s a difference between a department store versus a drug store. Two different experiences altogether. Hopefully, we don’t, as a technology company, burn too many bridges and learn how to incorporate AI with the expertise of the store representative. But it’ll be an interesting shift for sure.

Daniela: Well, technology also helps the store’s associates in so many ways. For example, nowadays, if you have beauty advisors in stores, you can utilize live streaming. You can use virtual to connect with consumers. This is the new way of engaging with your clientele. You can reach out to your customer at varying times of the day and present them with up and coming sales or new merchandise. This is a way where technology can help and partner with the beauty advisors to make them be much more efficient and more connected with their customers.

On the flip side, technology can also serve as a tool for beauty advisors. There’s so many beauty brands and it’s so expensive for brand representatives to do training and cover stores all over the country. Now you can use online technology in order to educate, for example using quizzes and rewards. You can get those associates to be involved with the program. By no means, am I saying technology is to hinder the relationship with the advisors, quite the contrary. It can be very complimentary.

Technologies like AlgoFace’s virtual try on are so beneficial in mass market environments, for example, in drug stores, because you have no testers. For the consumer, they have no ability to really find out which product is good for them. There’s also really no beauty advisors in most drug stores and mass market stores. Secondly, how do you try color? How do you know that a specific shade works for me? By having a technology like yours, embedded in the display unit, that makes it so much easier for consumers to be happier, walk away with a product that is good for them and cut down on their returns for the brand. So at the end of the day, it’s a win-win for everyone. The retailer is happier. They’re selling more product. Consumers are happy because they made the right choice. And the vendors are happy because they’re not seeing those returns come back to them. I think that there’s a place for technology to allow and guide consumers to identify products at mass. That’s an opportunity that I foresee.

Ali: Agreed. It’s interesting though, because as much as it seems to make total sense, a lot of mass market retailers really have not implemented solutions.

Daniela: I know, I know.

Ali: If you’ve ever shopped for cosmetics in a drug store, it’s not a great process.

Daniela: No, it’s not, and more, more than that, you will end up buying a shadow or lipstick color that is wrong for you. You end up not wanting to go back to that store so you toss it away instead of returning it.

Ali: Or how about a brand? It does all of this work to get the super popular, trending shade out there and exposed. Then someone goes into the store and it’s out of stock. So back to your point about AI, both providing an in-store experience, but also the ability to find the right products. And what if that shade is more popular in a different region and you have all the stock in a store in the Midwest and no one cares about nude lips in the Midwest? There’s a lot of opportunity to combine both AI and AR in store for the try on experience as well as using the technology to manage inventory.

Daniela: That’s right.

Ali: Let’s talk a little bit about digital. We talked about the physical location. What are some trends that you think are happening in digital that are driving sales? I know you mentioned the extreme competition for the consumer’s attention. Have you seen anything that you think has been effective? Or maybe creative?

Daniela: One of the things we’re starting to see a little bit more of is the use of NFTs to support new product launches. I’m very excited about this trend because you can really marry the physical and the digital whereby you could have the digital product that you can use for your Metaverse and you can have a product that you use, you hold and it’s made in limited quantity.

Ali: Is it going to be like the digital copy or the MP4 that goes with your CD?

Daniela: Right?! It solidifies the relationship of a brand with their avid fans. It can provide access to unique VIP events. I think that that’s something that we should watch out for. We’re starting to see some major brands put money behind it.

The whole Metaverse, I don’t know, I’m kind of on the fence. I mean, I hear a lot of conversations and some brands are going all in. I’ve heard successes from especially fashion retailers that cater to a younger demographic. I don’t know how much is going to work for the beauty industry, but again, we’re starting to see traction so that remains to be seen.

Ali: There you go! We got connected through the Beauty Matter awards. So tell us about the event that’s happening on the 15th and why should someone attend, how can they get more information and all the details.

Daniela: The awards started out on the idea that while we see so much recognition and attention being put towards the physical product, for innovation in product, there isn’t as much emphasis being put on the people, on the doers, on companies that really create an impact through their innovations. Beauty Matter, Kelly Kovac, who is the founder and myself have known each other for years and we had a conversation as I knew she was interested in this idea. We decided to kind of join forces and go for it. We had an overwhelming response to the awards. We had hundreds of applications from companies and individuals who entered. We had an amazing roster of judges and the whole idea was also to make this a very transparent way of reviewing the applications.

With some awards, it’s not quite clear who’s voting so we used judges that have unique expertise and we coupled them with categories where we felt that their unique insights and expertise would match the category. We then selected different judges to review and decide the finalists and the winners. We’re excited to announce the winners at the event, which will be held on September 15th. The event will be held in downtown LA at the Hudson Loft. It will be a day-long event. The thought process was, since we were hosting the awards at an in person event, how about we create a summit as well. Beauty Matter is all about putting a spotlight on unique ideas that come to the forefront. Kelly put together an amazing program. We have so many great speakers and conversations that are on the cutting edge of truly what’s happening right now in the industry. It will start at 8:30 AM and we’ll have pretty much back to back sessions with a little bit of networking here and there. There’s hundreds of really unique beauty brands that are going to be attending. There are investors, there’s some retailers that are coming as well to share their expertise. And then in the evening we will have this moment where we will honor the next award finalist and winners. The event is going to be really fun. The venue is spectacular. We’ll have some fun, interactive experiences as well.

Ali: Fantastic. Well, thank you so much for your insights today. Everything you shared, amazing expertise. Thank you. Thank you.

Daniela: This was so much fun. I totally enjoyed it.

CHECK OUT PART TWO