Beiersdorf CEO Stefan De Loecker has announced a major investment programme for the group's top brands. His intention is to counter the rise of niche brands.
Mass brands versus niche brands
Beiersdorf's new strategy will be called C.A.R.E.+, which stands for 'courage, aspiration, responsibility and empathy'. The company wants to strengthen the skin care products in its portfolio and has set aside an annual 70 to 80 million euros for the next few years. De Loecker believes that to be necessary to prepare for the fight against the rise of niche brands: "Small upcoming brands that target specific groups have already won 40 % of the European skin care market," he notes in Belgian newspaper De Tijd.
Beiersdorf's main draw are mass brands such as Nivea and Hansaplast, which represent 75 % of the concern's turnover. Although the results are on the whole still very good (in 2018, turnover reached 7.2 billion euros and net profits increased by almost 10 %), the Belgian CEO believes it is time for quick action, because customers demand a more personal approach.
To counter these new brands, De Loecker is betting on innovation: "People are still willing to pay for real innovations." The CEO also wants to tighten the 'digital bond' between the brand and the customer, as large-scale advertising campaigns on TV no longer have the effect they used to have. New types of advertising, for example through influencers, are becoming ever more important to reach the right target audience.
Barbara Geusens, the woman behind niche brand Nomige, which produces personalised skin creams, confirms De Loecker's analysis: "In the past, you would find all brands on the same store shelf and the difference was in marketing. Now people often discover a product through digital means, such as social media or e-commerce platforms."