Surviving and Thriving in a Downturn: Key Insights from the NEXT Summit LA.

John Cafarelli led one of the most dynamic and thought-provoking panels at BeautyMatter 's NEXT Summit, titled "Reading the Market: Surviving and Thriving in a Downturn." The panel tackled crucial insights on how beauty brands can navigate uncertain economic landscapes.

While beauty has often been viewed as resilient, drawing on indicators like the "Lipstick Index" as an economic barometer, it’s clear that the industry is not immune to downturns. Over the past decade, the beauty sector has experienced rapid growth, driven by abundant capital and seemingly limitless consumer interest. However, as with any industry, the market's cyclical nature means that shifts are inevitable, and not all brands will weather the storm. This "beauty Darwinism" era has created challenges and opportunities where only the most adaptive brands will likely survive and thrive.

The panel, featuring industry veterans ??JuE Wong 黄如意 , Deanna Kangas , Andrew Stanleick , and Margarita Arriagada , shared actionable strategies for brands aiming to navigate these turbulent times. Here are some key takeaways for brands:

1. Build Supportive Networks

• Success in beauty is often about collaboration, not just competition. JuE Wong emphasised the value of creating and nurturing a support network, even with other brands in shared retail spaces. This approach can lead to better customer experiences and mutual success.

2. Focus on Longevity, Not Just Growth Metrics

• Deanna Kangas advised against focusing solely on "vanity metrics" like rapid revenue growth. Instead, brands should aim for lasting value, cultivating timeless brand identities that appeal across generations.

3. Pace Your Growth for Sustainable Success

• Rapid growth can be tempting, but it’s not always beneficial. Kangas noted that hitting high revenue targets too quickly can deter some investors. Brands should prioritise building a solid foundation and steady growth for long-term stability.

4. Resilience and Persistence Are Key

• Both Wong and Stanleick stressed the importance of resilience. Building a beauty brand is rarely smooth, and challenges often intensify rather than resolve themselves. Brands that persist in adversity are more likely to come out stronger.

5. Embrace Change and Pivot When Needed

• Stanleick highlighted the need to stay flexible and adapt quickly to market shifts, technological advancements, and unexpected crises. Brands that remain open to change and can pivot are better equipped to stay relevant.

6. Align Resources with Company Growth

• As a brand grows, so should its support infrastructure. Stanleick shared insights on the importance of scaling teams and resources to keep pace with the brand’s evolving needs, ensuring a robust foundation for future growth.

This session at the NEXT Summit was a masterclass in navigating economic challenges and emerging more resilient. In an industry that is both timeless and rapidly evolving, the insights shared underscore the importance of adaptability, resilience, and strategic thinking for long-term success.