U.S. beauty spending took a hit across all categories in 2020, with makeup dropping 36%, skincare falling 13% and fragrance falling 21%, according to NPD Group. Haircare was the only category to see a minimal rise (+3%) year over year.
But that doesn’t mean there weren’t bright spots. In fact, experts note that despite market volatility, the beauty industry saw an evolution that sparked new opportunities for growth and innovation. During a recent panel discussion featuring beauty executives, Aliza Licht, Founder & President of Leave Your Mark, asked pointed questions about how the past year has shaped the industry. Experts discussed:
- How beauty trends are changing in light of new social norms and standards;
- The power of digital in cultivating community and driving intent;
- Whether “in-real-life” (IRL) experiences will make in impact once vaccines are completely rolled out; and
- Expanded roles for technology innovation and tools like gamification.
The Beauty Category is Evolving Along with the Beauty Consumer
When people think of “beauty,” they often associate it with color cosmetics. But over the past year, we’ve seen the category expand to focus on holistic wellness, according to Amy Shecter, CEO of Ever/Body. “Beauty is…the whole body, so I think beauty brands today have a big job ahead of them. We think about the water we’re drinking and the sunscreen we use, and that’s a big part of beauty today.”
As part of this expanded definition, the beauty consumer also is evolving. In response, Shecter noted that brands are speaking to a broader cross-section of consumers. For example, makeup brands are expanding their color ranges to better serve individuals of color, and are even diversifying their roster of models and influencers to include men. Brands also are seeing men invest more in skincare, which translated into a boon for the market during COVID lockdowns and work-from-home realities.
While some consumers are focusing on wellness fundamentals, Chloe Hall, Beauty Director for ELLE, noted an uptick in bold beauty trends. “I think everyone was super nervous about where beauty was going to go with the pandemic,” she said. “But I think a lot of people are letting their freak flag fly. We have purple hair, red hair…grandmas with a full bold lip. It’s such a fun time because everyone is super comfortable with experimentation, trying new things and figuring things out.”
Beauty Marketing is Both Social and Visual
Like many B2C businesses, beauty brands have recognized and adapted to the rapid shift to digital during the pandemic. Although skincare brand Supergoop already had a very digitally minded marketing team, they’ve had to double down on new digital storytelling channels, according to the company’s CEO Amanda Baldwin.
“It’s become an even more important part of anyone’s marketing strategy, because that initial point of discovery is primarily online,” Baldwin said. “The TikTok phenomenon is real, and I’m really excited as a marketer to think that there’s a whole new ecosystem of digital places we can be. I think a lot about where people spend their time — and you have to go find them, whether it’s through TikTok, Twitch, Triller or Clubhouse. Quite frankly, all of these words weren’t even in our vocabulary a year ago.”
TikTok in particular has been a valuable channel for beauty brands to share original content and form partnerships with popular influencers. As Beauty Director for ELLE, Hall is watching this phenomenon closely, and she is gauging how it will impact the longevity of brands as younger consumers gain more spending power.
“It fascinates me how 15-year-olds will be in their room and make this editorial [beauty] look in five minutes or share their wellness or bath routine,” Hall explained. “The innovation that’s happening online and these kids becoming ‘kitchen beauticians’ is incredible. It’s really exciting.”
Although it’s tempting to make a big splash by investing heavily in new platforms, Licht noted that brands should try to connect directly with and “own” their audience, whether it’s through their ecommerce site, email, digital newsletters or user reviews.
‘IRL’ Engagement Poised for a Comeback
A roster of social apps emerged and flourished over the past year, but “the jury’s still out about what’s going to stick and what may get thrown out the window,” Baldwin explained. As local guidelines ease, stores completely reopen and traditional IRL experiences and marketing activations are held, brands will be able to assess and refine their strategies more effectively.
“I do think people crave IRL — we’re social beings,” Baldwin added. “I think some of this will stick and some habits will be seen as better ways of doing things. But some things may ultimately get replaced by IRL experiences like concerts and festivals. I think there’s something that we’re all going to crave about those experiences, so I’m excited for that as a marketer.”
Technology Innovation Underpinning Successful Brands
Technology has become “a benchmark for entry today, and I love the way the beauty industry has embraced it,” Shecter said. “You can use AI technology to try a lipstick on and make the decision of whether to buy it or not. Technology is transforming commerce and I think it’ll be really interesting to see what the next five years are going to bring for the integration of technology into consumer shopping trends.”
But brands don’t always need to focus on new and flashy tech. Supergoop is often defined as a direct-to-consumer (DTC) brand, but the company also has a very strong heritage in traditional retail. As a result, the team had to invest in bolstering its ecommerce site at the start of the pandemic. Moreover, they had to improve their digital distribution and marketing strategies to help consumers have a relevant, streamlined shopping experience, Baldwin shared. For example, Supergoop has added simple quizzes that help consumers find the right product for their needs. “This idea of personalization is a huge new frontier for beauty, and I think all of us are trying to figure out how to do that efficiently at scale,” she noted.