Beauty and personal care are being driven forward by three trends:
Brands now have the ability to connect with people one on one at scale due to digital technology. Nearly one third of beauty sales have flowed through online channels over the last year and it just continues to grow due to video and social media. The path to purchase is changing.
Simplicity is where it’s at as it is with food and many other consumer goods products. Shoppers increasingly want more natural products. But rather than simply accept what brands tell them is natural, consumers are deciding for themselves. The message is that brands need to be authentic through and through. What’s not in your product is as important as what is and reveals a lot about your brand.
Today’s shopper is more diverse racially, culturally and ethnically than previous generations which is driving the trend towards authenticity. Products need to authentically reflect this individuality. For example, the number of different colors of foundation has grown three times as fast as the rate of general new product development across foundations.
In order to find the perfect beauty product, shoppers turn to digital technology.
a) They do their research first concentrating on:
b) Beauty shoppers start out undecided – nearly half don’t know which brand they’ll buy when they start the shopping process.
c) 1 in 4 turn to video through search to see products come to life. 38% visit a store that sells beauty products after watching a video. Shoppers watch:
Customer testimonials and reviews 37%
Product feature videos 48%
How-to videos 37%
d) As an entry point to beauty knowledge they use search, specifically: Category search 49% and then specific brand search 46% discovered through paid search.
e) Beauty shoppers are constantly online using smartphones and tablets – reading reviews, getting general product information and comparing features.
Male Personal Care & gender-neutral makeup are increasingly important
Traditionally the beauty industry has targeted women, but men’s personal care is a growing category. Although items like hair loss prevention pills and razors have been sold to men for decades, brands are now using direct-to-consumer and fresh packaging to attract a new generation of male consumers who view masculinity different then their parent’s generation. Conversations around men’s grooming habits have grown with the use of social media.
Potential Growth Areas
More demand for organic and environmentally friendly goods, especially skin care for young children.
The older generation is more concerned about their appearance so anti-aging products will do well.
Sun protection products are popular as there is more concern about the harmful effects of the sun.
Generally, retailers who are able to offer more tailored products to satisfy the behavior of ever-shifting demographic groups will be well-positioned to convert shoppers in their respective outlets.
Gone are the days when beauty brands could “shame” women into buying their products by making them think that they’re not good enough. Today’s shopper is more about positivity and inclusivity, especially millennials. They are gravitating towards more idealistic brands that share their optimism.
In order to figure out what suits their own personal needs, consumers need to experiment by sampling products. This is now a must-have in the beauty industry. Stronger emotional attachments are created when brands deliver on the experiential factor. Today, it’s a way for men and women to showcase their individuality and unique personality no matter their gender, age or ethnicity.
People are pressed for time and they want quick fixes to specific health care and skin concerns due to stressful lifestyles, poor diet, and pollution.
Shoppers also want beauty consultants in the store that can help with their specific needs. They want to be able to try out products but need help being directed to the right products.
Outside store, bloggers and vloggers are using YouTube videos to make names for themselves with huge success gaining millions of followers. Makeup tutorials are some of the most popular videos on YouTube. An endorsement from one of these influencers can send thousands of girls into a store.
Another way for shoppers to try products before purchasing them are subscription services like Birchbox and Ipsy. Curated products are automatically shipped to people’s homes where they can sample them. They also learn about other products they might not have considered.
E-commerce and beauty
In 2015 e-commerce sales of beauty products doubled from 3.3% of total sales in 2010 to 6.5% for a total of $24 billion spent online. China is by far the leader in terms of e-commerce sales of beauty products accounting for 18.1% of all sales compared to 10.6% in the UK and just 7.7% in the US. It’s important to note that the beauty channel is a collection of distinct subchannels, including subscriptions, luxury and grocery/mass market. There is no single “online beauty market.”
The online channel is increasingly about research, advice and browsing, not so much selling. Targeted advertising is being used to provide faster service. Take Google Shopping Express for example. Someone can order online in the morning and have it on their front doorstep by the time they get home from work.
The e-commerce industry faces a hurdle because users can’t try out makeup online. They can’t see, touch and feel the products like they can in stores. When they do buy online it’s usually to replenish what they already have rather than experiment with something new. Sephora has managed to tackle this with their “Beauty Board” where users can upload photos of themselves wearing their makeup looks. The products they used are highlighted and users are prompted to purchase if they like the look.
The top factors when shopping beauty are: convenient location, followed by lowest prices, wide selection and ease of in-store navigation.
Millennials want an experience when shopping and over 50% will try something new based on a recommendation from family or friends. The message to retailers here is to try bring online in-store by creating a great experience.
Ethnic trends amongst beauty shoppers show that African Americans want products specifically designed for them. Convenience and value are also important, and they are especially responsive to samples, coupons and reviews and recommendations more than most. Hispanic shoppers research their purchase more than most and want a premium experience. They are more likely to use an in-store beauty consultant and shop at a department store.