All across America, old drugstore staple brands like CoverGirl, Maybelline, a brand owned by L'Oréal (EPA: OR), and Revlon (REV  ) are on the wane. Once popular, these brands are now being outcompeted by smaller companies. Rival brands like MAC and Urban Decay are either distinctly higher-end, or online-only niche brands. Both higher-end and niche brands are experiencing a heyday of their own, at the expense of the old drugstore staples.

The big brands' faltering success can be traced to their marketing failures, which boil down to two basic problems: that they have not forged authentic consumer connections, and that they have not engaged meaningfully with social media. Social media has played a transformative role in reshaping the younger generation's beauty consumption. Younger consumers are more likely to discover new products from YouTube (GOOGL  ) tutorials and Instagram (FB  ) influencer posts than conventional advertisements. Thus the niche, social-media savvy brands have gotten a leg up by amplifying their appeal with younger consumers. Instagram influencers, often ordinary people who have attained fame solely through their social media presence, bring a degree of authenticity that celebrities and models cannot, as they can convey the impression that they are closer to the average consumer than Hollywood stars. Their product testimonials are therefore more likely to be trusted. Products promoted by more traditional celebrities are viewed with skepticism, as prospective consumers doubt that the celebrities themselves actually use that product.

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This new landscape has allowed smaller beauty companies to do better than larger ones. A company's method of connecting with their consumers was found to more directly impact their success. CEO of the large brand Coty (COTY  ), owner of subsidiaries Rimmel and OPI, seeks to fix these shortcomings by producing trendier options like facial highlighter and metallic lip colors, hiring more suitable spokespeople, and speeding up the rate at which new products can enter the markets. Coty has struggled to successfully integrate the holdings it acquired through Procter & Gamble (PG  ) in 2016, as the brands were in poorer shape than presumed. One such example is CoverGirl, which saw its share of the U.S. color cosmetics market fall roughly 2% from 2011 to 2016. CoverGirl is resuscitating itself by formulating dozens of new products and new store displays and featuring unconventional spokeswomen, like a 69-year old grandmother.

Coty also plans to simplify many of its fragrance and beauty product brands, which currently make up 6% to 8% of net sales, and top executives have been lobbying CVS Health Corp (CVS  ) and Walmart Inc. (WMT  ) to convince the retailers to reapportion some of their shelf space to its brands. But Coty may be fighting a losing battle, as retailers like CVS have already embraced nontraditional brands, attracting niche beauty products and formulating company-specific private labels. CVS wants to compete with beauty retailers like Sephora and Ulta (ULTA  ) with the creation of higher-end beauty sections in stores with smaller brands and more exclusive offerings.

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Right now, brands like CoverGirl and Revlon are caught in the middle of two popular purchasing choices. They are neither small, trendy upstarts, nor are they high-end luxury brands. Coty's executives suggest shortening the development time for new products and rejuvenating the existing offerings with 25% new products. Shortening the development time may result in quality issues of its own, as it could involve shortening a process that takes as long as two years to as little as six months.

Unfortunately for Coty, its products are often viewed as less desirable than last-resort options. Young people prefer brands sold at stores like Sephora, turning to drug store brands only for cheap, emergency fixes. But CoverGirl and Revlon, though cheap, are not quite the bottom of the barrel, and thus miss this segment of the market too, as consumers opt for cheapest brands like Wet n Wild in a pinch. L'Oreal CEO Jean-Paul Agon referred to the mass-beauty segment as "pretty weak" and stated that the company would try to boost sales by leveraging its newer NYX brand. Still, there are some success stories. Brands like e.l.f. (ELF  ) began online, but now take up the majority of beauty sales at Walmart (WMT  ) and similar retailers. In spite of e.l.f.'s small size, because of consumer awareness, it has successfully outcompeted established brands with historical reputations in the fight for young consumers.