JUL 2, 2019 Charlotte Yau
What the $532bn beauty industry looks
like in 2019
Today’s beauty industry landscape is a far di erent place
than it was ten years ago. The growth of direct-to-
consumer beauty brands, enabled by social channels,
email marketing and shoppable apps, has seen them
bypass the beauty corporations.
D2C brands are owning the customer experience and cutting out the
middleman, while the rise of in uencer marketing has seen many
brands do away with budgets for traditional advertising and instead
employ hundreds of follower-heavy ambassadors do the work for
them.
The rise of beauty and targeted price points
Brands are realizing that when tapped properly, the beauty sector can
be a lucrative one. Using EDITED’s retail data platform we found that
UK H&M’s o ering of beauty products increased by an enormous
94.8% from 2018 to 2019, while Net-a-Porter’s grew by 26%. Also,
‘beauty’ mentions in email newsletter and homepage communications
by both beauty and non-beauty brands in the US increased by 58%
from 2017 and 2018, while they rose by 24% in the UK.
The beauty industry is becoming increasingly dominated by millennials
who are willing to spend on good quality products and this knowledge
is utilized with targeted price points. For example, H&M, with its 15 to
30-year-old female target audience, sees cosmetic products enter at
$1.90 for wet wipes and exit at $44.57 for a leather makeup bag.
However, over at Net-a-Porter, the luxury fashion retailer with its 38-
year-old average customer spending $27,700 annually on fashion, the
outlook is di erent. The humble Charlotte Tilbury pencil sharpener
makes up the entry price at $6.35 and Net-a-Porter luxury bag makes
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the exit price at a whopping $2,544.42. In it beholds Oribe gold lust
shampoo and conditioner, Artis brushes and a variety of super creams
and serums.
Transparency in pricing and distribution
Start-ups are getting ahead in a world that was once dominated by the
big names. Better connectivity gives us access to small brands that
create products catering to our niche needs–and better.
Transparency in pricing, distribution,
manufacturing and ingredients has a lot to do
with this and is proving a hit with millennial
buyers.
Beauty Pie, the luxury makeup and skincare buyers club, is an example
of a brand doing it di erently. With a subscription, customers get a
pricing breakdown for every product they sell, saving them money on
luxury, science-backed ingredients. For example, the brand’s Ultimate
Anti-Aging Cream would cost $125 (£100), but by cutting out
middlemen, celebrity marketing and retailer markups, members get it
for $14 (£11.15).
Cultural trends and a changing consumer mindset
Cultural trends have seen a shift in the way consumers shop, too.
Transparency-minded consumers are far more savvy about what’s
going into our products: the shorter the ingredient list the better;
vegan, non-toxic and cruelty-free products rule. While if the packaging
isn’t recyclable, they don’t want to
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consumers makeup bags look like something out of an Estée Lauder
commercial, instead they’re stu ed with Onomie, Make, and that Thai
lip balm brand they discovered on Insta last month.
Sustainability in beauty
What goes on to our skin is one thing, how it’s made is another.
Sustainability is becoming increasingly important to transparency-
minded customers who want to know where our products come from
and how they are made. No longer can beauty giants get away with
wheeling unsubstantiated claims as they once did, and brands are
properly doing their research in respect for their wised-up customers.
The plastic-free movement has seen tangible changes already: Holland
& Barrett recently stopped selling wet wipes in their stores. And the UK
government banned the use of microbeads in products in 2018 and has
banned cotton buds from 2020. Furthermore, customers are
increasingly concerned about whether their beauty packaging is
recyclable. Naturally, brands are tapping into their new,
environmentally-aware customer. Liberty London recently sent out a
‘Conscious beauty’ edit in their newsletter featuring all-natural
Herbivore and certi ed-organic Austin Austin products. It’s a move
that mimics dozens of other big beauty retailers.
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Finally, with more vegans in the world than before, beauty brands are
capitalising on the way of life, ridding their products of animal-derived
products and ensuring cruelty-free methods. Cult Beauty recently
shared their ‘Vegan beauty’ edit, and countless brands have been
following suit.
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So, what’s next?
There’s a great consumer desire for transparency when it comes to
beauty products. And so, the beauty industry is seeing a greater
regulatory crackdown amidst increased “greenwashing” across the
sector, this is where brands claim their products are natural or organic
when in fact, they are not. The Personal Care Product Safety Act was
introduced in May 2017 to give the FDA more power to regulate
ingredients and ban toxins in cosmetics and personal care products.
Having these regulations in place will force beauty brands to rethink
their approach to ‘natural’ cosmetic formulations.
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* Beauty industry valued at $532bn as per Reuters
Ciara Sheppard, contributor
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