Our top ten trend

predictions for 2024

UK cosmetics, beauty and fragrance industries
Contents Page

Introduction 3
Sporty synergies 4
Tele-dermatology services 5
Mummy motivation 6
CMA consumer protection crack down 7
Cleaning up greenwashing 8
Inside : outside beauty 9
Storefront successes 10
EQ services 11
Tenacious tech 12
ECTOIN excitement 13
Contact us 14
Key contacts 15

2 Retail & Consumer

Introduction
The cosmetics, beauty and fragrance sectors are competitive
and demand flexibility and dynamism in light of changing
consumer preferences, legal and regulatory developments,
economic instability, political unrest, sustainability concerns,
and technological innovations.
We’re about to enter a new era of cosmetics, beauty and fragrance and what follows is
our forward-looking trend projection for 2024. The key theme is that, despite persistent
challenges, these sectors are expected to show more resilience in the years to come and,
by 2027, the global beauty industry is expected to record over $580 billion of retail sales,
growing at 6 percent per year1.

Retailers and other supply chain players in these sectors need legal advice that is properly
tailored to support them in navigating the evolving market conditions. Part of giving
full legal advice means constantly monitoring, assessing, and intimately understanding
the industries in which we advise. Bird & Bird’s Cosmetics, Beauty & Fragrance Group is
expertly placed to provide such advice, drawing on its extensive knowledge of the Retail &
Consumer sectors within its global network of lawyers.

1. Beauty, The State of Fashion (May 2023). The Business of Fashion and McKinsey & Company.

Key contacts
Please reach out to continue
the conversation.
Graeme Payne Nicola Conway
Partner and Head of Retail & Consumer Group Senior Associate, Retail & Consumer Group
T +44 20 7982 6474 T +44 20 7982 6467
E [email protected] E [email protected]
3 Retail & Consumer
Sporty synergies
Overlaps are developing between the sports and beauty worlds - both Secondly, small and large beauty brands alike are creating (or are adding
industries attract high-spending consumers so it makes sense to cross- to) sport-focused product lines. Generally, these fall into categories of: (a)
over to find customers in both. Two main themes are expected to (allegedly) performance-enhancing solutions (such as sports supplements);
progress in 2024: (b) cosmetics that promise to last throughout your sport of choice (e.g.,
waterproof); and (c) post-workout recovery regimes and routines.
First, greater synergies are growing between cosmetics brands and
ambassadors in the sporting worlds. Many brands seem keen to pivot In respect of (a) and (c) in particular, and to avoid scrutiny by regulators,
to collaborating with athletes who are often perceived as trustworthy brands need to avoid making medicinal or physiological claims (e.g.,
alternatives to other ‘celebrities’. Brands are fast-learning that, when “re-builds your muscles post-workout”) where a cosmetic claim is more
working with influencers, everything they’ve ever said and every brand appropriate (e.g. “soothes tired muscles post-work-out”). As regulators
they’ve ever endorsed can be found online (if you don’t find it, your continue to crack down on companies in this area, consumers can expect
customers will). If not drafted properly, influencer contracts can be to see fewer unsubstantiated claims throughout 2024, which in the
complicated to enforce and/or terminate when things go awry. It is long term should enable greater trust in the claims that are ultimately
unsurprising to see companies being more cautious in their selection advertised. The marketing of sports supplements should be approached
of brand affiliates in the first place (choosing someone who aligns with with extra care, as these may end up being controlled under regulation as
the reputation and values of the brand is important). Further, we predict medicinal products (this is dependent on a number of complex factors, but
greater care to be taken in ensuring that proper contractual protections should always be assessed properly with legal support).
are in place to enable brands to exit a relationship unscathed when
needs be.

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Tele-dermatology services
Platforms exist where a customer can send a photo
of their face or other areas affected by potential
dermatological conditions, and with the assistance of
AI, questionnaires, or otherwise, dermatologists are
able to assess the potential condition and suggest
or “prescribe” a skincare regimen that might include
prescription-only medicines (in addition to other
cosmetic products).
We expect to see regulators in 2024 clamping down on the types of services that
offer the prescription of medicines or the provision of healthcare/dermatological
services where the service provider might not have the required regulatory/
professional approvals (e.g. non-registered dermatologists or healthcare
practitioners who cannot offer dermatological/healthcare services, and should be
limited to providing cosmetic-only services).

Platforms might also take the opportunity to promote their own services and
products to customers during their experience. The promotion of any services and
products may further be specifically regulated, depending on a number of factors,
including the specific nature of the services and products (e.g. prescription-only
medicines may not be advertised to the general public).

5 Retail & Consumer

Mummy motivation
Many cosmetic and beauty products, particularly those with innovative Due to the increasing appetite for product swaps, we predict an increase
and active ingredients, are not recommended for use by those who are in marketing aimed at those who are either in the process of growing their
pregnant, breastfeeding and, increasingly, trying to conceive. There are families (be that trying to conceive, pregnant or nursing) or otherwise
some ingredients that are known to be harmful when consumed and/or making personal choices to avoid particular groups of ingredients through
absorbed. Outside of the ‘known’ category, there are other ingredients an abundance of caution. Any marketing claims that one ingredient is a
for which the risk to an unborn child or nursing child is largely ‘unknown’ “safer” option when compared to another would need to be substantiated
(i.e. unproven). Companies are often, unsurprisingly, unwilling to trial on two levels – first to show that the alternative product is indeed proven
products on those who are pregnant or nursing due to the risks involved to be safe (including for the user group concerned which may be a high-
and, therefore, the safety claim cannot be proven and thereby made. As risk group) and secondly to show that the original product should actually
a result, those who are pregnant or breastfeeding often find that their be avoided due to it being unsafe. Without firm substantiation, these
choice of cosmetics and beauty options is greatly narrowed. comparative safety claims are likely to put a company on thin ice from a
legal and regulatory perspective.
Outside of family planning concerns, other consumers in general are
becoming more inquisitive and selective about the ingredients they are
comfortable using topically. There is an increased curiosity in learning:
(a) what ingredients are in products and (for actives) in what percentages;
(b) what effect these ingredients purportedly have both short- and long-
term; (c) whether or not they contain any known allergens or irritants;
and (d) of any other potentially harmful effects. As a result, there is a
growing movement towards avoiding any ingredients where there is any
uncertainty, and doing “product swaps” for alternatives that claim to have
a similar cosmetic effect but raise fewer concerns.

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CMA consumer protection
crack down
During 2023, the UK’s consumer protection authority (the Competition and Markets
Authority, or “CMA”) has been actively investigating a number of companies where
it has reasons to suspect or believe that there are breaches of consumer protection
legislation and guidance.

At present, the CMA can enforce consumer law through the courts, and where
appropriate, seek additional measures to improve consumer choice, drive
compliance with the law, or secure redress for consumers. However, this is about
to change. The Digital Markets Competition and Consumer Bill is currently passing
through parliament and, when it passes, it will enable the CMA to impose fines
directly (without needing court approval) for non-compliant traders. The fines can
be up to 10% of global group turnover for certain consumer law infringements; so
this significantly changes the enforcement landscape.

In other words; ensuring that you are compliant with applicable consumer
protection legislation is more crucial than ever.

7 Retail & Consumer

Cleaning up greenwashing
2024 promises a continued (and wider) clean-up of greenwashing. We know that Overall, the enforcement priority in 2024 will be across all green claims including:
the CMA is actively investigating a number of companies who have been making
A. the use of generic terms such as ‘sustainable’, ‘natural’, ‘green’ or ‘eco’;
(allegedly) unsubstantiated green claims and recyclability claims in relation to
products and packaging, including some who crossover into the toiletries sector. B. imagery, colour schemes and/or designs on packaging that mislead consumers
Further, the UK’s Advertising Standards Authority (“ASA”) is promising to continue into believing that something is more environmentally friendly than it really is;
with their focus on climate change and the environment, including by significantly and
increasing the volume of its advertisement monitoring and reviewing activities
by using AI. The ASA reportedly anticipates processing 10 million ads through C. packaging disposal claims such as “100% recyclable / biodegradable /
its AI Active Ad Monitoring system2 next year. In addition, the ASA has updated compostable”.
its guidance on misleading environmental claims and social responsibility in
Companies must be prepared to substantiate their claims in order to avoid
advertising. Importantly - it has added a new section on ‘green disposal’ claims and
trustwashing consumers; this may necessitate a different advertising and marketing
announced that in 2024 it will ramp up its enforcement work to target businesses
strategy for some in 2024.
that are putting out ads that are in breach of the rules.

2. Read more here - asa.org.uk/news/our-active-ad-monitoring-system

8 Retail & Consumer

Inside : outside beauty
The wellness trend lives on and it isn’t slowing down. Addressing gut Walking a fine line; brands need to take caution with their claims in
health, stress, anxiety, and “inside” health is shown in many studies the Wellness space. Whilst consumer research statistics suggest that
to improve our “outside” health i.e. hair, skin, nails and overall beauty. consumers are interested in and willing to spend more on products with
Further, consumers are reportedly spending more time exploring (and mood-boosting properties, there are obvious legal risks with making
investing more money into) meditation, reiki, energy healing, sensorial claims that products go further than being cosmetic or enhance general
therapy and other well-being practices. wellbeing, for example to claim that they are medical-grade and/or will
improve your physical, emotional or mental health. In the UK and the EU
Cosmetics, beauty and fragrance brands are leaning in. We can expect to there is a different risk profile when making a cosmetic claim versus a
see more fragrances that focus on aromatherapy benefits, supplements- medical claim (i.e., that a product can treat or prevent a medical condition),
supplements-and-more-supplements, nootropics, adaptogens, products with the latter opening up a business to medicinal regulatory red tape and
that are novel in their delivery system and therefore create curiosity (in some cases) the need to obtain necessary regulatory approvals from
and enjoyment, and also products that are sold as part of a holistic self- the relevant medical and/or healthcare regulators.
care ritual.

Even Pantone’s colour of the year for 2024, which has been announced
as “Peach Fuzz” (PANTONE 13-1023), seems to validate the continuing
trend of wellness and self-care. The colour has a theme of “embrace the
warmth” and is described as being a colour that “captures our desire to
nurture ourselves and others... It’s a velvety gentle peach tone whose
all-embracing spirit enriches mind, body, and soul.” We’re expecting
to see lots of peachy tones in colour cosmetics but also packaging and
marketing campaigns across the board.

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Storefront successes
Despite retail rental costs remaining high (especially in big cities), and Preferred routes (other than e-commerce) for smaller and independent
online shopping remaining a popular alternative to in-store shopping, retailers with smaller budgets could be:
many beauty stores are thriving. In London, you only need to look at the
A. contracting for concessions / traditional beauty counters in larger
constant queues outside of Sephora (in both Westfield shopping centres)
successful department stores, where individual brand overheads will be
and the Glossier flagship (Covent Garden) to see that beauty boutiques are
lower than opening and operating a mono-brand location;
booming. ‘Boots Beauty’ has also recently opened in a new 11,200 square
foot space at Battersea Power Station. These storefronts highlight a big B. renting out pop up shop locations which seem to demonstrate good
investment in both multi-brand and mono-brand physical stores, but also sales numbers and increased brand awareness even over short-term
the consumer’s desire to have the choice to shop across both online and campaigns; and
in-person doors.
C. collaborating with hotels (for example, contracting to stock in-room and/
or on-premises spas and salons).

10 Retail & Consumer

EQ services
Many women’s salons already use “safe word” systems, meaning, you These services are usually offered with the best of intentions, but
can let the staff know that you need help outside of the aesthetic brands will need to train and support their staff to deliver these
services by ordering something specific. For example, if you order an services effectively and safely. Providing this kind of support (and
“angel cut” or “special layers” the salon will know that you need the any related threat or harm to the client or staff member) may be
assistance of either a law enforcement officer or of a medical nature. distressing and could have an impact on staff mental health and team
There are many stories in the news and on social media that show how morale. From a legal perspective, there may be a risk of personal
salons are can be used as a safe zone to protect women from human injury claims and constructive dismissal claims associated with such
trafficking and domestic abuse situations. services, if the employer has not provided sufficient training or support
to staff who provide these services and they suffer mental illness as a
This trend is now growing into barbershops and other male- result. Employers may also find themselves vicariously liable for their
centric grooming locations. Many service providers are training and employees’ advice / actions (and/or any associated consequences).
coaching their staff to provide a more emotionally-aware experience.
The training could include, for example, upskilling active listening Employers should implement policies and reporting structures, and
techniques, observing nonverbal cues and body language, and having provide training and support to staff providing these services so that
greater knowledge of resources in the surrounding community that they understand what action or advice is appropriate and when and to
the customer may want to be connected with. This is promising news, whom to escalate concerns. Employers should also consider whether
given the UK’s Office of National Statistics reported that in 2021 around it is appropriate for all staff members to provide such services, or just
three-quarters of suicides were males. The barbershop in particular employees / certain staff members. In some cases, staff members may
seems to be a valuable space to develop the service, since studies show be engaged as workers or independent contractors rather than employees
that men tend to be loyal to one barber and also that (akin to unisex or – employers do not have the same level of control over genuine workers
female-centric salons) barbershops are frequently seen as a place to and independent contractors, and treating all staff in the same way may
open up and discuss topics that you might not have the time or space create misclassification risk which could have both employment law and
to raise elsewhere. tax consequences.

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 Tenacious tech
We know that Artificial Intelligence (“AI”) and Augmented Reality (“AR”) are In 2024, the use of AI and AR will continue to escalate. Some key aspects to
already being used at many levels of the supply chain: keep in mind are as follows:
A. manufacturers in cosmetics and Noses in fragrance are reportedly 1. A greater focus will shift to what brands are doing with the data
exploring how ChatGBT-style-tools can draw up innovative formulas and that they obtain through using these technologies. The data can be
juices; valuable to enable companies to analyse household spending habits,
lifestyle, environmental influences, and genetic information. All of this
B. marketing teams use AI such as ChatGBT to write copy for their websites
information enables brands to offer more personalised and accurate
and ads; and
purchasing recommendations, but online sales recommendations
C. consumers show interest in exploring AR on brand websites to “try on” can also trigger compliance obligations under the Digital Services
makeup and new hairstyles, at home, using just their laptop or phone Act (especially with regard to the use of sensitive data or marketing
camera. Many shoppers report that an AR function gives them more to minors).
confidence in purchasing something without having seen it in-store.
2. Overall, the AI regulatory environment is shifting quickly and it
So far, these use cases have created upfront human-time-cost savings for will remain critical for companies using AI/AR/new technological
brands as well as (reportedly) reducing negative environmental harm (in innovations in their products/services to stay abreast of changing and
particular, by reducing the volume of product returns in categories where diverging rules. This applies for example when AI-systems are used in
there was previously no “at home try on” option). relation to potentially regulated products, such as toys and medical
devices. However, whatever the product, regulation will be relevant, in
particular in relation to data protection, privacy and IP and platform
regulation. Additionally, what should not be overlooked is regulation
applying when AI-systems are used for purposes which will be
regulated, such as interaction with customers, and internal purposes
such as recruitment and HR.
3. Cosmetics companies offering connected products to consumers will
not only have to navigate the incoming compliance demands of the
AI Act, but also prepare for the EU Data Act which will apply from
2025. In this context, companies should consider changes to product
design, manufacturing and information requirements to comply with
the new “data access by default” rules, and taking steps to identify any
trade secrets that should be protected in light of the new data sharing
obligations.

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ECTOIN excitement
Every couple of years we see a new “hero” ingredient that we have heard little to
nothing about entering the beauty market. All of a sudden, it flies into products
left, right and centre. For 2024, we predict this product to be ECTOIN.

ECTOIN is an amino acid derivative that is being touted by dermatologists globally

as an effective hydration agent with antioxidant properties that will protect the
skin against environmental stressors. In some ways, this could be seen as the
new-to-the-scene cousin to niacinamide and hyaluronic acid. There are claims
that this product can promise you almost anything: hydration and reduced
transepidermal water loss, UV radiation / pollution protection (although since
it’s not an active UV filter, it may not be credited as an SPF), anti-aging and line
reduction, skin texture and elasticity improvement, inflammation soothing, and
skin barrier repair. Reportedly, it plays well with other ingredients so is relatively
safe to add into any skincare regimen and can be used by almost all skin types
(although, unsurprisingly, it is not being recommended for use by those pregnant
or breastfeeding).

The issue with ingredient booms is that once they hit the headlines, any retailer
that is not already formulating and manufacturing with that ingredient may fall
behind that quarter or that year. One of the key takeaways that we learned from
our brand clients in 2023 was how much they rely on watertight contracts with
manufacturing teams that can create first (or fast) to market concepts, even with
new ingredients, within a flexible production plan and with scalability on demand.

13 Retail & Consumer

Together, as One Firm, we advise businesses of all sizes
on aspects of the law that might affect your business
- including commercial contracts (such as licensing,
franchising, and supply chain networks), consumer law,
intellectual property, real estate, product compliance,
data protection, corporate transactions, competition
regulation, disputes, tax and ESG concerns. We help our
clients to produce global solutions. Wherever you are in
the world, and whenever you need us, we are ready to
support you.

We are proud to offer a free 30 minute consultation

to businesses in the Cosmetics, Beauty and Fragrance
industries -

Please contact us to arrange a

time to discuss

14 Retail & Consumer

Key contacts Acknowledgements
The authors would like to thank our colleagues as follows for sharing their
insights and foresights in the preparation of this report:

Shima Abbady Associate, Commercial (with specialist knowledge in AI), The

Hague

Hester Borgers Associate, Intellectual Property, Amsterdam

Amy Cole Associate, Retail & Consumer (with specialist knowledge in

Consumer Law), London

Shona O’Connell Senior Associate, Retail & Consumer (with specialist

knowledge in Consumer and Advertising Law), London

Graeme Payne Nicola Conway Nick Cowen Trainee Solicitor, London

Partner and Head of Retail & Consumer Group Senior Associate, Retail & Consumer Group Stephanie Creed Senior Associate, Employment, London
T +44 20 7982 6474 T +44 20 7982 6467 Francine Cunningham Regulatory & Public Affairs Director, Dublin
E [email protected] E [email protected]
Pieter Erasmus Senior Associate, Intellectual Property, London

Georgina Farmer Associate, Retail & Consumer, London

Karen Friebe Head of Hotels, Hospitality & Leisure, London

Emma Green Partner, Intellectual Property and Head of Wellness Group,

London

Megan Harrison Associate, Retail & Consumer, London

Sana Malik Trainee Solicitor, London

Lorna Young Associate, Real Estate, London

15 Retail & Consumer

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