A couple of months into 2023 and it looks like the “permacrisis” is here to stay. Unstable political times across the world, high inflation and environmental concerns have taken centre stage and are influencing consumers’ behaviours. Their priorities are changing and so are their expectations. So, what does it mean for the beauty industry? What trends are emerging for 2023 and how can beauty companies capitalise on them?
The pandemic has had an impact on the industry with an increase of online purchases. Many consumers have also realised during lockdowns that they could do their own manicure or hair colouration and therefore save money. The cost-of-living crisis means we are all reassessing where we are going to spend our disposable income and by doing so many of us will rethink our priorities and what really matters for us.
As consumers, we tend to be more and more inclined to buy from brands that align with our values. Shoppers are becoming more sensitive to their environmental impact and they are also expecting beauty products to be produced and shipped sustainably. We have been talking about clean beauty for a few years and this trend has accelerated with buyers becoming a lot savvier about ingredients. Transparency has turned into a key requirement for skincare and cosmetics alike.
With budgets becoming tighter, consumers will expect the products they buy to work better for them. Balancing performance and price will be important and we will see a heightened demand for multi-use products. There is a growing trend for combining make up and skincare and it is likely to keep increasing.
Technology has already had a significant effect on the beauty industry and its role will become increasingly critical. Augmented reality is already being used by social media platforms and beauty retailers have started using filters to allow consumers to virtually try on a new eyeshadow or lipstick colour before buying. The arrival of the metaverse and virtual reality should create even more opportunities for beauty companies. A push for Artificial Intelligence means that online shoppers will be able to have help to identify the right product for them without having to visit a physical location to get in store advice.
The future will be “phygital”. Beauty brands will have to be prepared for the shift in consumer expectations and behaviours. Google will start blocking third-party cookies this year which means that businesses will have to turn to first-party data sources to find out more about their customers. Technology will be a great tool to gather information and bring innovative experiences to the market to allow increased brand awareness and engagement. Whether it is in store or at home the emphasis will be on creating a seamless shopping experience. Unique offerings and premium services will be key to capture consumer spending and improve client retention.
A further benefit of technology is to enable a personalisation of the beauty offering. The invaluable data collected via the loyalty programmes, online quizzes and other interactions that clients will have with a brand will allow for a more targeted approach to marketing. The delivery of a tailor-made beauty experience will make a shopper feel special and understood which in turn should boost brand loyalty. Failing to do this could mean missing out on additional spending.
The progress of science has revolutionised skincare over the last few decades and will keep doing so. Epigenetic is the science that studies skin ageing caused by external factors such as lifestyle and pollution and not by your inherited DNA. Scientists are actively researching formulas that can help skin regeneration by influencing gene expression patterns. Further investments in research and technology will lead to the next generation of ingredients and products with an ever-increasing blurred line between beauty and wellness.
At Partner Executive we think that consumers who are put under stress by the current economic environment will try to find alternative ways to boost their wellbeing and the beauty sector could benefit from this. We have all heard about the “lipstick index”, an indicator that links the sales of lipstick to economic uncertainty as consumers try to find inexpensive ways to experience luxury. To attract consumers to their products, companies will have to rethink their offering and create unique experiences. Broadening their product range by establishing partnerships and collaborations with other businesses is an option. Firms who can afford to make acquisitions could add emerging and disruptive players to their existing portfolio and offer a more holistic approach to beauty and wellbeing. Either way, leveraging digital capabilities and opportunities will be key to generate engagement and gather relevant data points to remain relevant in a fast moving market.
If you have any comments or questions on this topic please feel free to contact Partner Executive on 0203 178 4996.
