In both the U.S. and U.K., indie brands pose a challenge to companies that have traditionally dominated the Beauty category. More than a third of brands new to L2’s Digital IQ Index: Beauty U.K. are indie brands, and they account for much of the industry improvement seen in the study: 83% of the new brands rank Average or Gifted.
While traditional brands are reticent to collaborate with e-tailers or allow reviews to be posted on their products, savvy newcomers including Charlotte Tilbury and Illamasqua have leveraged the rise of e-commerce and emergence of new e-tailers to gain the advantage. Most indie brands employ advanced checkout functionalities such as cross-selling and offer free and next-day shipping options, while the majority of Index brands do not.
Large enterprises burdened with a physical retail footprint may not be able to match these digital investments. However, many are responding to the growth of these digitally native firms by acquiring them. REN Skincare, one of the indie brands in the study, was acquired by Unilever– the ultimate sign of success.