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    Online Exclusives

    State of the Beauty Industry, Part I

    Technology helps marketers connect with consumers and track segment winners, insist analysts at CEW event.

    State of the Beauty Industry, Part I
    When will consumers return to beauty counters?
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    Nancy Jeffries, Contributing Editor02.16.21
    Fact-filled, and ultimately positive, the recent State of the Beauty Industry Report, presented virtually by Cosmetic Executive Women (CEW) last week, placed strong emphasis on recovery following a roller coaster year. Jill Scalamandre, chair, CEW, and president, bareMinerals and Buxom, welcomed attendees, introduced the speakers, and thanked the sponsors for their participation.

    Miranda Gordon, vice president marketing, fine fragrance, Mane, spoke of fragrance as a fine wine, and noted the importance of listening to its nuances. She correlated the notes of fragrance to the multitude of stories contained within data, urging attendees to listen not just to the loudest, but to listen to the data that whispers about emerging stories that are worth hearing.

    “Our data is singing to us, may we listen carefully,” said Gordon.

    During the CEW event, several speakers hit high notes.

    Sparks & Honey Talks Tech
     
    Sparks & Honey combines technology and cultural consultancy to understand trends that impact the future. Courtney Emery, director of cultural strategy, described how the platform translates culture into structured data. The company's AI-driven platform called Q collects, organizes and measures culturally relevant signals from thousands of sources. It then tags each signal individually to understand its place in the taxonomy to quantify changes and trends.

    Emery highlighted significant signals that were generated in 2020, including the #MeToo Movement, Black Lives Matter, climate change and joblessness, explaining how each signal is analyzed and tagged. To understand beauty, the Q system identified trends that emerged, particularly pharma and beauty in 2020, based on their number of tags. Clearly, the impact of COVID-19 and other significant signals in 2020 brought enormous changes, most significantly the growing interest in health and wellness, representation and empowerment, and growing digital engagement. The Q system identified 30 trends that defined beauty in 2020. Five clusters were identified, including Wellness and Health; All Natural and Beyond Natural; Representation and Empowerment; Digital as Backup and Digital as Default; and Skintellectuals and Skinvestment.

    In the Wellness cluster, COVID-19 increased demand for hygienic and immune-boosting beauty; and doctors and nurses emerged as trusted experts and pandemic heroes. Mental health and sleep concerns were amplified by loneliness.

    The All-Natural cluster supports technology allowing for greater traceability and understanding, and highlights consumers continued resistance to greenwashing. Consumers are looking beyond natural claims to understand that sometimes synthetic is better, as increased understanding of ingredients centered on efficacy.

    Representation and Empowerment revealed that consumers expect diversity that is deeper than who is shown in brand ads; they are looking at who brands are financially- and culturally-empowering. Women entrepreneurs and Black-owned businesses came to the fore, along with empowering previously marginalized groups, and creating room on the beauty aisle. 
     
    Digital as Backup saw the adoption of mobile commerce and social commerce, and consumers became more comfortable with online shopping. TikTok emerged in 2020, and the data feedback loop continued to feed custom solutions and lower barriers of entry for a variety of beauty groups, including male consumers.

    The Skintellectual and Skinvestment cluster identified how recession drives demand for high-value, multipurpose products and the no-makeup-makeup look accelerated. Investment will continue to support high value products, and non-invasive procedures will continue to rise.

    Emery noted consumers are seeking low effort and low budget solutions. The key takeaways were to build trust through science, demystify claims and ingredients, and empower who is creating products.

     
    Mintel Trends
     
    Sarah Jindal, associate director, global beauty and personal care, Mintel, highlighted four trends for 2021, citing the online potential for brands in the future. She said that 38% of US beauty consumers are more comfortable shopping online for beauty than in past years, which is setting the stage for brands to create new channel strategies to engage the consumer.

    Jindal said COVID-19 has accelerated a shift in how consumers discover and purchase products, creating a need for a “true omnichannel” beauty experience that includes the professional sector. The new channel strategies will encourage different ways to engage with the consumer, address e-commerce pain points, drive business to own-brand sites, and provide easy access. Creating the no-touch shopping experience will bring challenges to brands to provide rapid delivery, streamlined online experiences, live shopping engagement with a social aspect, and no-contact, self-service shopping. She cited as an example a recent partnership between Coty and Go Puff, a quick access digital delivery service which provides rapid delivery of cosmetics to consumers. 
     
    While beauty remains a tactile business, engaging the senses with experiential e-commerce, another strategic approach, gives rise to things like touchscreens, tactile interfaces and sound tracks, including the importance of creating a “brand mood” with audio.

    “Does your brand have a soundtrack?” asked Jindal, explaining that this kind of engagement brings cross-category partnerships into play, as well as shared databases. 

    Actions to be considered for success include personalized touchpoints leveraging professionals as part of the beauty experience, and clear brand transparency. For the future, she highlighted the importance of user-generated content to garner consumer trust, tapping into emotion and experience with sounds, and a range of touchless technologies. 

    The Beauty Eco-lution trend focuses on shifting purchase habits as consumers focus more on sustainability, ethics and safety. Risk-aversion post-pandemic will drive consideration of how and where consumers purchase products. According to Mintel, 64% of US beauty consumers want more innovative sustainability ideas from big beauty brands. High value will continue to be placed on transparent sustainability to drive business, and consumers will weigh social and environmental considerations equally.

    “Sustainability will be the heartbeat of every company,” said Jindal, but she warned they must bridge the “say-do gap,” emphasize ethics and drive change with “beauty with a cause.”
     
    Other trend, Community Collaboration and Support Local, looks at opportunities for brands to collaborate with and support local businesses, as purchase patterns are shifting to local neighborhoods, with less focus on price. Building and re-building trust through community engagement and experience is paving the way for beauty to enter a new era of trust. These initiatives are about the people and not necessarily about buying products.

    Clean Beauty with Ethics and Safety continues to grow, and will impact how the consumer buys products. Brands must marry ethics with safety to cater to conscious consumers, said Jindal, who noted the importance of the product journey pre-purchase, and how it will continue to impact purchase decisions.

    Citing carbon emissions and sourcing, from start to finish, as well as the ethical/eco-friendly conversation, as key aspects for consumers, Jindal said, “Brands need to think across the spectrum. It’s about driving discovery, but also getting consumers to buy more, while thinking about new ingredient stories and new product forms.”

    In the future, actions will center on the urban-rural continuum to drive innovation; exploring the undiscovered benefits of existing products and ingredients; and addressing the new meaning of convenience.

    The Beautiful Mind was identified to recognize and address a time to renovate the mind. Wellness has become an important part of beauty and the pandemic has driven the concept of holistic health, with a focus on mental wellbeing. Mintel found that 38% of women in the US, aged 25-34, are interested in beauty products that reduce stress and anxiety. Creating and rebuilding trust will remain key to consumer purchase, so providing safe environments should be emphasized, as well as offering automation, to reduce risk for consumers and employees. Jindal cited Germany’s use of the automated “Pepper” robot at retail venues, which reminds consumers to stay safe, wear masks, and keep social distance.
     
    The concept of Routines and Community Bring Normalcy highlighted the power of a sense of normality during uncertain times. Don’t underestimate beauty routines, recognize the importance of multi-layered experiences and a sense of community; and be inclusive and diverse, said Jindal. Beauty with a Brain highlighted the measurable mind-body connection; generating data and quantifiable results; and emphasizing trust, credibility, and functionality to lead the way with brands.

    Beauty (Re)Valued explored a reassessment of what value means to consumers, vis-a-vis quality, convenience and purchase impact. According to Mintel, 70% of US consumers agree that it is worth paying more for products of higher quality, hence the need to redefine value in terms of clear communication of product benefits; and offer the right tools and products to enable consumers to effectively perform routines at home. As DIY becomes permanent for many, communication must include guidance in pairing professional treatments with at-home maintenance to prolong benefits. 

    Mintel’s data emphasized the importance of experiences, leveraging consumer interest in learning new skills and trying new products, and evolving sampling and trial for a seamless discovery journey. Finally, in Trading Up & Trading Down, Jindal addressed the redefinition of luxury with ingenuity and innovation, explaining that while stripped back beauty routines and a flexible approach to justify product purchase have been on the rise, the new luxury includes the optimization of functionality. She cited as an example, affordable price points of candles at Ikea, with high design ceramic packaging, for added consumer connectivity.

    In the future, direct to consumer (DTC) models will gain competitive edge with strong consumer-brand relationships. The new luxury will connect emotionally with consumers through stories and by broadcasting sustainability, and consumers will remain loyal to brands that adapted to new patterns and routines.

     
    Google and Spate Take the Pulse of the Consumer     
     
    Flynn Matthews, head of insights, global CPG, insights and measurements, Google, and Yarden Horwitz, co-founder, Spate, discussed the seismic shift to digital, noting a two hour increase in daily digital use, and a 200% increase in e-commerce sales during the past year. Digital beauty sales increased significantly during lockdown; but what was a very destabilized market in March of 2020 at the start of COVID, began to stabilize by the summer.    

    Wellness products led the way, with vitamin C, zinc and elderberry supplements, hand soap, hand sanitizers and hand masks proving most popular during the early days of the pandemic. Consumers then moved to DIY beauty products, including hair color, root touch-ups and nail products; as well as face bronzers and facial masks; and at-home product creation, including DIY lip gloss, DIY hair color remover and DIY blackhead strips. There was an uptick in sales of hydrocolloid patches and in general, products with efficacy. In June, Google searches soared for stress-relief gummies; August saw the beginning of the quest to address maskne; September showed new interest in more creative haircuts, as well as hair care and coloring trends; November searches increased for hair accessories; and December saw a marked increase for hydrocolloidal treatment patches.

    Functionality remained key, as Cerave searches rose thanks to the TikTok effect; and skin care, including Cetaphil and Naturium, gained. Cerave, in particular, was said to see a 882K increase in average monthly searches. Other top trending skin care brands included The Ordinary (+183K), Paula’s Choice (+52K), Cetaphil (+47K), Youth to the People (+45K). Naturium searches soared 19,161% YoY; and other strong brands included The Inkey List (+1,625%), Junik (+1,160%), Aklief (+876%) and Buttah Skin (+822%).

    Top trending hair care brands included Dyson (+329K), Monat (+230K), Arctic Fox (+195K), Olaplex (+175K) and Function of Beauty (+148K). In terms of YoY growth, Bondi Boost held the top spot, with a 2,518% gain. Top trending makeup brands were Il Makiage, with a 105K increase in average monthly searches; followed by Ilia (+58K); Glamnetic (+50K); Thrive Causemetrics (+34K); and Grande Cosmetics (+32K). Glamnetic saw year-on-year growth of ~4,300%; followed by Doe Lashes (+981%); Ioni Lashes (+823%); Liaison (+634%); and Item Beauty (+401%). Makeup brands showed significant growth in lashes and lash extensions. 

    Makeup brand searches showed steady growth in Black-owned brands, including Beauty Stat (+159.4%), Ancient Cosmetics (+159.4%); and Mented Cosmetics (+51.4%). Searches for skin care products that included specific ingredients, for example, niacinamide, retinol and vitamin C, also grew. For example, in May, searches for niacinamide jumped 184.0%. 

    Top trending ingredients in the wellness category included zinc, apple cider vinegar, collagen, elderberry, and vitamins C and D. In skin care, top ingredients included retinol, vitamin C, niacinamide, salicylic acid, BHA and hyaluronic acid. Top hair care ingredients were coconut, castor oil, olive oil, aloe vera, rice water and amla.

    Active ingredients continue to impact consumer purchase, particularly as consumers seek products that are gentle. As consumers discovered which ingredients were more drying and/or harsh, particularly during extensive use of hand sanitizers and creams, it became an important part of their search to zero in on functionality and sensitivity. Cetaphil Gentle Face Scrub saw 97.6% YOY growth; Salicylic Acid Daily Gentle Cleanser by Cosrx saw 43.6% YOY growth; and Cetaphil Gentle Acne Cleanser saw 24.1% YOY growth.

    Top trending treatments included Botox Lip Flip, which increased as services became more available, as well as brow lamination, lip blushing, and gua sha skin treatment, which is based on traditional Chinese medicine. Consumers are using social media to get exposed to different styles and aesthetics; for example, E-Girl Hair, experienced 217.9% growth. Other fast-growing aesthetics options, each offering their own look, include dyed bangs (up 118.1%), freckle pens (up 89.3%) and eyebrow slits (up 62.6%). Top internet aesthetics offerings included Cottagecore, Baddie Aesthetic, Soft Girl Aesthetic, Kid Core, Y2K Aesthetic, Kawaii Aesthetic, Clowncore, Glitchcore and Scenecore.

    In summary, how you look and how you feel manifested in searches from April 2020 until the end of the year. Safety and stress care moved to comfort and care, and skin care was “on fire” this past year. Likewise, the luxury and comfort experience of beauty is staying strong. Body care, hand care, body washes, and treatments continued to grow. Body wash searches, particularly for body washes with efficacy and beautiful fragrance gained momentum. The Aesop brand, for example, got stronger as consumers searched for the best scented hand creams. Oil body cleansers, body washes for men, and body butters were also on the rise. Hand massage, reflexology, hand creams, and herbal hand sanitizers also grew. More commoditized categories continue to evolve to a certain level of sophistication, as consumers sought stress relief, safety, and comfort. 

    In the Chill Zone, according to Google and Spate, there was a marked rise in candles, up 60%, and air fresheners, up 40%. Aromatherapy and essential oils, showed 20% growth, demonstrating big increases in an already growing category. The combined growth in advanced treatments, the rise of “tweakments,” the internet aesthetics categories, and the continued search for comfort, safety, stress relief and efficacy provide a lot of information with which key brand players can engage.

    The CEW State of Beauty was sponsored by Mane, Mintel, Nielsen IQ, NPD, BeautyInc, Fairchild Media Group, Moss, Cosmoprof North America, and Kaplow Communications.

    For more on the State of Beauty Industry, visit Happi.com next week. 
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