TheBigPromptLibrary/CustomInstructions/ChatGPT/knowledge/XJ1gJkBcQ-makeup-maven/cosmetic_industry_trends.txt

5 Key Cosmetic Industry Trends for 2023 (and beyond)
1
Skinification of Beauty
A key factor driving the adoption of premium cosmetics is an increased awareness of premium ingredients and their potential benefits for skin. Consumers no longer evaluate a cosmetic product on just how it makes them look: they’re looking to heal, tighten and enhance their skin as well. Nowadays, concealers don’t just improve skin tone -- they work to brighten, soothe, and plump skin as well. For beauty brands, this has meant large scale investments to create cosmetic products that blur the lines between makeup and skincare. From vitamin C-enriched tinted serums to the integration of nanotechnology for improved hydration, toxin removal and enhanced skin metabolism, cosmetic products are being supercharged beyond the usual spheres of color and coverage.



Chanel introduced a multipurpose lip and cheek pigment that melts into skin, powered by the red camellia—a botanical rich in the antioxidant protocatechuic acid. Thanks to its antioxidant properties, the balm not only provides vibrant color, but also aids skin barrier functions.

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Victoria Beckham

Victoria Beckham Beauty put out a Satin Kajal Liner, enriched with chamomile extract, vitamin E, and panthenol. The eyeliner became popular for featuring eye-soothing and hydrating properties.

Victoria kajal
2
A Focus on Clean Ingredients
NielsenIQ reported that as of 2022, a growing number of cosmetics and beauty shoppers in the US buy products meeting the strictest ‘clean’ definitions



European consumers are particularly responding to brands that claim natural ingredients (especially French consumers)



Sephora Ulta Target

Key industry players are paying attention and investing extensively in research to include organic and natural cosmetics into their portfolios, as retailers like Target, Sephora, and Ulta are making it easier for consumers to shop clean beauty with specially designated filters for search.

3
Hyper-Personalization of Products
From concealers that analyze the weather, to products tailored to consumers’ specific microbiomes, personalization is helping to drive differentiation in the cosmetics industry and increase loyalty . Brands such as L'Oréal and an explosion of startups are investing in hyper-personalization solutions with the help of data science and Artificial Intelligence. By testing DNA and the skin’s bacterial composition, they’re set to offer custom-blended formulas for each customer’s unique genetic makeup. Cosmetic products with modified allergens are also being specifically designed to address a user’s underlying skin concerns.



US-based startup OPTE created a makeup-skincare printer which scans a customer’s skin for discolorations by capturing and analyzing skin images. It then prints a skin-enhancing cosmetic coating with a formulation of pure ingredients that instantly correct the appearance of spots and prevents the appearance of new ones.

Opte product
TONEWORK, a science-led bespoke makeup brand allows customers to find their ideal makeup color through an AI-driven Authentic Color Master algorithm, which performs precise color analysis in 3,448 areas of the face - and includes emotion recognition. The service uses a fully automated cosmetic manufacturing device to then rapidly produce various personalized products.

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4
360 Degree Sustainability
Ethical product development and production has become more important, as simply focusing on recyclable or re-useable packaging is not green enough in this era. Gen Z consumers in particular want to ensure that a sustainability focus underscores every aspect of the manufacture of their favorite products.  In response, there has been a push toward sourcing ingredients that respect the ecosystem and consider their environmental impact, and increased efforts and research by cosmetics and beauty brands to offer and develop eco-friendly alternatives such as:

Water-free cosmetics: With sustainability and carbon reduction high on the agenda for the cosmetics industry, waterless products are becoming more and more common. It’s predicted that the global water-free cosmetics market will hit $31 billion by 2031.

Biotech Beauty: With the natural world providing many of the most popular ingredients in beauty products, manufacturers and consumers have become ever more conscious of their limited scalability. With biotechnology, scientists read the genetic makeup of flora and fauna that hold beneficial properties for skincare and work to replicate them in a lab.

3D Printing to reduce waste: Some startups are creating solutions that allow customers to directly print cosmetics in exact amounts they require, thereby minimizing waste. In cosmetics packaging, 3D printing also enables new creative and custom solutions.

Plastic-Free Packaging: Plastic-free packaging has seen an annual 18% growth in online search in the US, and plastic-free beauty products logged $25M in-store sales in 2022 -- a 13.4% increase from the previous year.



Maybelline New York introduced a Green Edition, a collection of vegan cosmetics made from a minimum of 70% natural-origin ingredients as part of its Conscious Together global sustainability platform. The makeup range was certified by the Cradle to Cradle Certified Products Program, which assesses products for environmental and social performance including all aspects of product design and manufacturing.

Maybelline green-edition-new


Beauty brand Half Magic introduced compostable eyeshadow compacts made from PaperFoam, a sturdy, lightweight, biodegradable material created with industrial potato starch and molded cellulose.

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5
Rise of Social Commerce & Indie Brands
E-commerce channels have seen significant elevation during the pandemic, with 65% of US consumers having ordered beauty products online in 2021 versus 51% pre-pandemic, according to NielsenIQ. But today, consumers scout out cosmetics primarily on social media and Mintel research shows that social channels can be a seamless avenue for brands and consumers to connect via a single path to purchase.



A 2021 survey by Accenture found that 52% of millennials said they are more likely to get inspiration from other users or influencers when shopping through social commerce than when shopping through e-commerce, followed by 48% of Gen Z respondents. The social commerce industry is expected to expand three times faster than traditional e-commerce to reach $1.2 trillion by 2025. With the number of people using social media worldwide projected to increase to 5.85 billion by 2027, the social media opportunity for beauty brands to reach new consumers, create omnichannel shopping experiences and generate higher revenue is growing every year. This has led to explosive growth of socially-fueled indie brands that have risen to meet changing consumer demands and preferences.

 

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Six Marketing Strategies for the Cosmetics Industry
Cosmetics buyers today can take their pick from a plethora of offerings from old-guard brands as well as the rising tide of indie entrants -- all catering to their specific requirements and desires for expression. As a result, consumers are purchasing across an ever wider range of brand and price categories in order to best suit their needs. 71% of buyers said they tried a beauty or personal care product that was new to them in 2022, with 54% claiming to have used novel makeup products. As e-commerce and social commerce are making it easier than ever for consumers to access new cosmetic products and experiment with the latest trends, brands have a unique opportunity to reach entirely new audiences and demographics.

 

1
Get Social With Influencers
Social media has established itself as an essential channel for brands looking to launch and grow cult followings with viral reach. According to the Fashion Network, TikTok is the social media platform with the strongest impact on growth for beauty brands, with #tiktokmademebuyit having racked up over three billion views, and 89% of TikTok users having purchased beauty products after seeing them on the app.   Beauty brands are using TikTok partnerships as an opportunity to align with, engage and build trust within their target audiences.

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Half Magic, a brand started by Doniella Davy, a make-up artist for the actresses on the hit US teen drama Euphoria, used TikTok and the hashtag #EuphoriaMakeUp to encourage people to post videos of themselves putting on makeup inspired by the show. With 2.1B views, Half Magic is emblematic of how new brands and trends now flourish on social media.

euphoria half magic
elf

Gen Z oriented brand E.l.f. created a #eyeslipsface challenge on TikTok tying into the E.l.f. acronym. Users could upload a video of themselves dancing to an original song and post using the hashtag for the chance to win $250 worth of E.l.f. products. The campaign earned over 9.7 billion views, mainly due to organic participation by celebrities who got in on the trend.

elf campaign
benefitbrand

Benefit Cosmetics started a Game Face program as an influencer-oriented push to connect gaming and beauty through streamers sharing their “game face” looks on Twitch, as well as their pre-streaming makeup routines. Now, the brand is expanding its commitment to gaming with tournament series designed to amplify emerging female streamers.

benefit gameface

Influencer-oriented Live Commerce: During the pandemic, live commerce experienced a dramatic boom and an explosion in livestream shopping options offered by social platforms, brands and retailers alike, with viewers able to see ‘before and after’ results. In China, where livestreaming is more widely embraced, two influencers, Austin Li and Viya, reportedly sold $3.1 billion worth of products during one night of a shopping festival.

austin li
2
Augment Digital Offerings for Personalized Experiences
Beauty brands are increasingly adopting immersive technologies such as Artificial Intelligence (AI) and Augmented/Virtual Reality (AR/VR) to provide personalized experiences and increase customer engagement. Cultural happenings have also had a big impact on the use of AI and AR technology, as the pandemic has been a catalyst for brands adopting these digital experiences. Store closures due to COVID-19 meant that shoppers were unable to browse and purchase beauty items in physical stores, and AI tools that allowed people to ‘virtually try on’ cosmetics became more widely used.  50% of UK female consumers now say they would be interested in using an app to receive personalized makeup tips .  Gen Z is a large driving force in this development, with 68.3% of Gen Z in Europe keen to get personalized, AI-based recommendations.



Estée Lauder has utilized AI and AR technology to launch personalized virtual try-on makeup solutions. Data has shown that Estée Lauder saw a 2.5 times higher conversion rate using its Lip Virtual Try-on, and that its iMatch Virtual Shade Expert increased the brand’s customer loyalty.

Estee imatch
3
Build Transparency into Processes
Cosmetics consumers are looking for more information on the products they purchase than ever before. They’re concerned not just with the overall health benefits of the ingredients being utilized, but also the ethical nature in which those ingredients are sourced. As beauty consumers become more selective than ever, they’re interested in purchasing from brands who share their ingredient lists in an upfront and open manner. As a reflection, 81% of beauty product searches on Amazon are unbranded, as shoppers are looking for attributes rather than brand names. To compete in such a space, transparency is becoming the marketing watch-word.

Skinfo

Swedish startup Skinfo is helping consumers take control of their choices by creating ingredient transparency widgets for beauty products sold on e-commerce sites. The widgets explain every ingredient function, skin effects, allergens, vitamin highlights, botanical names, and origin information.



German startup AFTS developed a blockchain-based cosmetics tracking platform that measures sustainability of cosmetics production. By fostering transparency and traceability within the cosmetics supply chain, it is working to increase trust among customers.

4
Promote Makeup in the Metaverse
There’s been lots of hype about the advent of the metaverse over the last couple of years, and the potential of virtual spaces to enhance consumer experiences and sell products is huge. Up to 60% of Millenials will consider making purchases in virtual worlds. Many beauty brands have entered the metaverse and have been experimenting with these platforms. Brands can use Web3 features such as non-fungible tokens (NFTs) to deliver exclusive experiences for their customers. Issuing an NFT can, for example, help a small company kickstart a community, and for a larger brand, an NFT could replace a membership card.



Bakeup, a “digital-first” brand is using the metaverse to highlight makeup’s potential as a means to express one’s individuality. The brand created a gemstone-embellished eye veil, as part of a “wearable” digital makeup NFT collection that can be worn, traded and sold in the metaverse.

BAKEUP-Beauty
MAC

MAC Cosmetics unveiled a limited-edition Keith Haring lipcolor collection, complete with a related NFT collection. The collection features three illustrations of MAC Viva Glam lipsticks decorated with Haring’s most famous artwork, with proceeds going to support organizations fighting for healthy futures and equal rights for all.

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Beauty brand Buxom created a gamified experience in the virtual world of Decentraland, wherein users can unlock rewards by completing specific tasks and games every month. By collecting limited-edition proof of attendance protocols from each event, users also have the chance to win a year’s worth of Buxom products.

buxom
5
Foster Diversity & Inclusivity
Nowadays, brands are reacting to society’s voice in their marketing campaigns, with issues surrounding transparency, diversity and inclusion becoming key factors shaping brands’ strategic and business decisions. 41% of UK consumers now value beauty brands committed to ethical working practices, with 36% also willing to pay more for brands that respect human rights. For Gen Z, “2D identity” is a thing of the past, and brands catering to this generation’s vision of radical inclusion are designing neurodivergent-conscious products and experiences, with the goal of increased accessibility.





The Estée Lauder Companies created an AI-powered Voice-Enabled Makeup Assistant (VMA) application, to help visually impaired users more easily and confidently apply makeup. The move follows recent beauty accessibility launches, including L'Oréal's HAPTA handheld computerized makeup applicator for users with limited hand and arm mobility. VMA uses AI and voice instruction technologies to assist in application by assessing their face and giving audio feedback and tips on whether their lipstick, eyeshadow, or foundation is evenly applied.

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6
Nurture Loyalty Via Deals and Promotions
The U.S. inflation rate reached 6% in 2023, with color cosmetics and nails facing average unit price increases of 19% year-over-year, according to NielsenIQ data. In addition, department stores and mass channels are both experiencing 20% increases in pricing in the beauty sector. These price increases are notable because 36% of beauty consumers are financially constrained, which could lead to cutbacks in purchases of color cosmetics as non-essential expenses. As of May 2022, NielsenIQ research indicated that many beauty consumers were already using the following money-saving strategies:⁠

51% stock up when a product is on sale
41% use coupons
38% seek out stores with lower prices
27% only buy items on sale
25% buy less expensive alternatives
25% shop with retailers that offer loyalty points
This is not limited to the US. With looming economic pressures in Europe, 76% of UK female consumers shop around to find the best prices when buying makeup. Brands can boost loyalty by offering promotions, discounts, and gamified deals to attract a broader swath of shoppers. Additionally, loyalty programs that collect first-party consumer behavioral data to create insight-driven promotional strategies are growing increasingly important to brands as cookies fade out.

5 Critical Trends in the Future of Beauty
Jun 5th, 2023
Tony Scianna
The global beauty industry is projected to expand significantly through 2027
The global beauty industry is projected to expand significantly through 2027
Global beauty retail sales are expected to reach $580 billion in retail sales by 2027, revealing expansion throughout different segments of beauty. The industry is expected to grow at a 6% CAGR between 2022 and 2027, according to The State of Fashion: Beauty, a new report from The Business of Fashion and McKinsey and Company.

The report also identifies five critical dynamics for the industry over the five-year period: geographic rebalancing; the need for indies to scale; merger and acquisition opportunities; Gen-Z’s influence on consumer loyalty; and wellness and self-care expansions.

Retail Sale Projections by Segment
Skin Care

As beauty's largest category, global skin care retail sales are expected to grow from $190 billion in 2022 to $260 billion by 2027. The market is driven by innovation and consumer interest in science-based ingredients and efficacy in products, per the report.


Fragrance

Fragrance retail sales are expected to rise from approximately $70 billion to nearly $100 billion, benefitting from further expected penetration in China and growth in the United States.

Color Cosmetics

The color cosmetics industry is expected to continue recovering from the business effects of the COVID-19 pandemic. Retail sales are projected to rise from $80 billion to around $105 billion, with growth largely evenly distributed across price segments.

Hair Care

Hair care retail sales (excluding devices) are expected to expand from $90 billion to $120 billion. As the skinification trend reaches hair care, consumers are now adopting multiple-step hair care routines similar to skin care, which is expected to contribute to the market's growth.

5 Critical Trends
1. Shifting Geographic Priorities within Beauty
Beauty has now cemented its reputation as a resilient industry that can consistently deliver high margins and new avenues of expansion. According to the report, key players in the beauty industry will need to deepen their geographic diversification in order to maintain a reputation as an industry that consistently delivers high margins and new avenues of expansion. Per the report, China's dominance of the beauty industry is decreasing as the United States becomes more competitive and markets in the Middle East and India emerge as hotspots. The report estimates China to reach approximately $96 billion and North America to reach approximately $115 billion by 2027.

While the U.S. and China are expected to remain the industry’s heavyweight markets, other markets, like the Middle East and India, could play larger roles in driving revenues than previously expected. 

In the Middle East and Africa, beauty retail sales are forecast to reach $47 billion by 2027, due in part to economic modernization under new government programs and high household income, per the report. India's beauty retail sales are expected to increase to $21 billion by 2027, spurred by increasing levels of disposable income and a younger, digitally savvy generation of shoppers. Brands can also find opportunities by targeting consumers with products and services in luxury beauty, which has the potential to grow from around $20 billion to around $40 billion by 2027, according to the report.

2. The Rise of Wellness
Wellness and self-care have assimilated into the mainstream and consumers are seeking out products that support their aesthetic needs as well as physical and mental health. The majority of consumers from the United States, China and Europe said in the report that they plan to increase spending on wellness products and services in the year ahead.


Today’s $1.5 trillion global wellness industry is projected to expand retail sales at a 10% CAGR between 2022 and 2027, and that will be reflected in the rise of product offerings that merge beauty and wellness. McKinsey’s consumer survey of six major markets found that sleep wellness, sexual wellness, supplements and healthy snacks and beverages are expected to rise in popularity during the forecast period.

3. Consumer Behavior & Loyalty
Per the consumer survey, 40% of consumers indicated they are loyal to the brands they know and trust, while 69% said they like to try new products at least every six months. The survey also indicated that consumers lean towards in-store purchases as their preferred method of shopping, although it was closely followed by online shopping. Among Gen-Z consumers, 60% are willing to keep buying from their favorite brands.

Beauty shoppers are also focused on sustainability. When asked about the top three aspects of sustainability that matter most when making beauty purchases, survey respondents cited an absence of ingredients that harm the environment, 100% natural formulas and cruelty-free production.

Priya Rao, executive editor at The Business of Beauty, The Business of Fashion, said: “We are witnessing a change in how consumers think about beauty. It’s no longer solely about lipstick and skin care but a holistic approach to how these products make us feel about ourselves and the world around us. Our report pairs in-depth research with our expert industry analysis to look ahead at what the market can expect over the next few years.”