In 2019, the global beauty industry was worth a whopping $740 billion with projected year-on-year growth of 4.6%.
But the world has changed a lot in a year.
With the shift to remote working and living, and many people experiencing a fluctuation in income, consumers are rethinking the way they prioritise their purchases.
Here, I explore the top five beauty trends motivating consumers, and what brands should be doing to build brand equity and drive growth.
1. Eco-conscious beauty
- A Harper’s BAZAAR UK poll found over 60% of women are willing to spend on brands that offer natural products, while 55% showed interest in eco-conscious brands.
- Marketing Chart’s 2019 report shows 37% of consumers look for products with environmentally friendly packaging, while 29% buy from brands that promote sustainable practices.
In today’s world, environmental issues are front and centre in the media, so it makes sense that consumers are becoming more eco-conscious and favouring brands that share their values.
But for brands, talking about sustainability goals isn’t enough. They need to be highlighting their efforts in their branding and taking tangible action.
Consumers are looking for acts, not ads.
For example, market leaders L’Oreal, Olay, Estee Lauder, REN and L’Occitane have pioneered the movement by introducing refillable pouches, pods and products across their brands. Steering large companies towards sustainability isn’t easy, so nimble startups have a real opportunity to make a difference and cut through.
For brands looking to remain competitive in the sustainability space, build content marketing themes around the efforts to ‘go green’.
Consider taking audiences behind the scenes to show R&D processes, promoting container return schemes, and creating social media posts that highlight the results of these projects.
Further to the above, it’s also worth looking at successful sustainable brands for inspiration.
Makeup Eraser reported a 1000% growth in e-commerce sales in early-2020, while sustainable makeup brand Kjaer Weis experienced a 63% increase in refill sales, which made up 30% of overall brand revenue.
These numbers aren’t small, and they point to a growing consumer sentiment towards sustainable beauty.
2. Diversity and inclusivity
- A 2019 survey by Google showed 64% of people being more likely to consider and purchase a product if they see an ad that’s diverse or inclusive.
- Markstein’s 2019 report revealed 70% of consumers want to know how brands are addressing social issues, while 46% take a brand’s social responsibility efforts into account before making a purchase.
There are a few drivers behind the diversity and inclusivity trend.
Consumers are disillusioned with social media marketing and traditional advertising, and the recent body positivity, love equality and #BlackLivesMatter movements have resulted in consumers being more socially conscious.
This trend can be traced back to 2004 when Dove launched its Real Beauty campaign, which celebrated diverse bodies and generated $2.5 billion in sales. Fast forward to 2019, Dove made $4 billion in annual revenue and can attribute part of that to their diversity initiatives.
The trend shows no signs of slowing down.
Kantar’s recent study revealed progressive ads are 25% more memorable with consumers, so brands that champion a more authentic front will only continue to grow.
This has proved a successful strategy for inclusive brands such as Fenty Beauty, Frank Body, Glossier and Drunk Elephant, which constantly feature and address a diverse pool of talent.
Boosting your brand’s diversity and inclusivity starts with breaking down barriers and changing attitudes within the company.
Having more diverse members in the team, consulting wider groups of people, or simply asking the right questions at the beginning of projects can help steer the brand towards greater authenticity.
Brands can and should listen to what their consumers are saying on social media. They can browse tagged images to get to know their consumers and leverage those assets on social or across wider marketing materials.
This not only positions the brand as being more authentic, but also encourages other consumers to contribute to the feedback loop.
At the end of the day, engaged consumers are more likely to be repeat purchasers.
3. Videos and other virtual experiences
- Google found 52% of consumers watch product review videos before making a purchase, according to Search Engine Journal.
- CNN reported that China’s livestream e-commerce sales reached $61 billion in 2019 and is forecasted to double to $129 billion in 2020.
While social platforms such as TikTok give brands a new channel to engage audiences, tech innovations such as social beauty filters have helped Kylie’s Cosmetics and L’Oreal emulate the in-store ‘try before you buy’ experience.
The next big shift in tech sees livestream e-commerce simplifying the consumer’s path to purchase by combining virtual reality experiences with near-instant gratification.
Amazon’s 11-hour Beauty Haul Live event on September 25 attracted a long list of big-name brands, including Flawless, Honest Beauty, Cetaphil, Neutrogena, Elemis and Follain. Beyond offering special deals, those beauty brands also invited guest celebrities and influencers to attract and engage viewers.
With the launch of Instagram Live Shopping in August, beauty brands now have more ways to engage existing followers and hook new audiences to drive conversions. But with the propensity of live fatigue setting in, brands need to be creative with virtual experiments to keep consumers engaged.
To stand out, brands can treat each live session like a mini activation.
Consider teasers like countdown timers or exclusive access to new products. During the event, create an engaging narrative while moderating conversations to keep the session lively. When it ends, reward participants with samples or discount codes to track attribution.
4. Personalised perks and rewards
- Harvard Business Review shared it is five to 25 times more expensive to acquire a new customer than to retain one.
- XM Institute states loyal customers are five times more likely to repurchase, four times more likely to refer, and seven times more inclined to try a new offering.
CRMs and customer loyalty programs have always been an effective way to keep consumers engaged. But with new brands and startups entering the market, the beauty industry is more competitive than ever, so brands need to evolve to maintain their share of the market.
In keeping their consumer base engaged, retailer brands such as Sephora and MECCA have one of the best beauty loyalty programs with their early access perks, surprise and delight gifts, birthday rewards and tiered membership systems.
Brands looking to stand out among the flood of e-newsletters need to offer more personalised content to address consumer’s individual needs.
To start, segment consumers into audience groups based on purchase histories and content consumed.
For each group, look into content pillars and product recommendations that will resonate with them. Then, personalise all communication to reflect that.
This not only makes consumers feel like the brand understands their needs, but it also presents an opportunity to upsell and continue the customer feedback loop.
5. Brand partnerships
- American Express’ 2017 Business Collaboration Index shared mid-sized businesses that inter-collaborated boosted their profits 1.4 times over.
- AdNews market analysis reveals collaborations cost 30 times less compared to digital advertising.
When done right, brand partnerships tap into consumer’s desire towards scarcity — the more limited a product is, the more attractive it becomes. And in a post-pandemic world, driving revenue will be more important than ever.
Partnerships such as Hershey’s and Etude House, Coca-Cola and Morphe, Oreo and Perfect Diary, and Mentos and Innisfree, are good examples of how beauty brands can innovate existing products while tapping into new audience groups.
That said, beauty brands don’t just have to indulge in consumer’s sweet tooths.
In April 2020, MAC teamed up with online multiplayer game Honor of Kings to launch a range of cosmetic products inspired by the game which saw 14,000 pre-orders and the range sell-out within 24 hours of release.
For brands looking to find the right brand partnerships, ‘social listening’ tools such as Facebook Audience Insights allow brands to see what other pages or profiles existing followers are engaging with.
Brands can also test the waters by running simple polls across social channels to gauge their consumers’ appetites about possible collaborations.
Stay ahead by tapping into a customer-centric strategy
Beauty brands are facing new challenges in the post-pandemic world, such as disrupted supply chains, uncertain customer bases and fewer people shopping in-store.
One thing that will help beauty brands survive and thrive is by putting their consumers first.
By understanding their motivations and needs, brands can continue to stay relevant and build brand love.