The beauty industry encompasses makeup, perfume and many other products. Direct-to-consumer (DTC) beauty brands have grown quickly by targeting certain demographics with personalized omnichannel customer experiences that appeal to them.
Beauty brands that wish to target younger demographics should invest in both ecommerce and social media strategies, including collaborations with influencers and celebrities as a means of expanding their reach.
Trends
As beauty salons, spas and barbershops reopen following the pandemic, customers are eager to return for regular treatments. Customers want to reestablish their routines and meet with hairdressers, makeup artists or nail technicians regularly for services they require – this makes payment solutions important to beauty businesses that value customer loyalty while offering relaxing experiences for customers.
Consumers are becoming more focused on purchasing sustainable products, fuelling a surge of growth for clean beauty brands. Many customers are also seeking niche products that support social causes; examples may include brands that promote healthy microbiomes or eliminate gender stereotypes.
With consumers demanding new norms and niche products, legacy beauty brands are facing increased competition from direct-to-consumer (DTC) brands and ecommerce platforms. DTC brands and platforms boast unique advantages when it comes to offering personalized experiences and driving repeat sales – this can especially be advantageous when providing custom foundation blends or tailored skincare regimens.
Market Size
The beauty industry is one of the world’s largest and most profitable sectors, thanks to its huge consumer base and growing emphasis on personal grooming like skincare.
While legacy beauty brands continue to hold strong in the market, ecommerce and direct-to-consumer (DTC) brands are making inroads quickly thanks to consumer desires for new norms and products as well as image-based social media platforms like Instagram that allow influencers to become full-fledged entrepreneurs who launch their own brands.
Manufacturers in the beauty industry have altered their product branding and advertising strategies in order to increase sales across multiple countries, as well as using natural ingredients in their products to attract consumers. The global cosmetics market can be divided into categories for product type, distribution channel, region and other outlets including supermarkets/hypermarkets/specialty stores/pharmacies/online sales channels/other outlets with supermarkets/hypermarkets being among its dominant channels followed by specialty stores/pharmacies/online sales channels/outlets etc. Key players include Avon Products Inc, Beiersdorf AG Henkel AG & Co KGaA Kao Corporation L’Oreal S.A Oriflame Cosmetics S.A Revlon Shiseido Company Limited Skin Food Co Ltd/The Estee Lauder Companies Inc
Competition
The beauty industry is currently dominated by multinational conglomerates that account for 81.7% of market sales in 2019. Online sales are projected to increase significantly by 2023 and competition between players will become even fiercer as online sales increase further. Players in this field need innovative strategies in order to stay ahead of competitors.
One key strategy in the beauty sector is utilizing digital marketing channels, including optimizing ecommerce pages and engaging customers on social media. Furthermore, establishing a distinct brand identity that sets you apart from competition is also key.
Fenty is one company leading this trend by expanding their foundation shade selection with 40 choices – this shows how tech can help beauty brands create inclusive products and increase customer retention, not to mention targeting young consumers who make up an increasing portion of the beauty market.
Future
Future beauty brands will focus on sustainability trends and design products with non-toxic ingredients to satisfy consumers. Furthermore, they will take steps to make packaging more eco-friendly by using recyclable materials or reducing waste.
Consumers are becoming more conscious of their choices, leading the industry to move away from traditional cosmetics toward wellness-oriented nutricosmetics or cosmeceuticals – products which combine skincare and cosmetics into holistic experiences for users.
As the beauty industry expands, beauty brands will need to prioritize customer engagement and loyalty as part of their growth strategies. Branded communities such as Sephora’s Beauty Insider Community allow users to share tips, pose questions, participate in challenges, share tips/tricks etc. before purchasing products which help increase shopper engagement while decreasing return rates.
