Cosmoprof’s 2023 report on beauty buyer trends examines how the growth of digital technology has fundamentally altered the beauty industry, restructuring the established sales framework. It also highlights Asia-Pacific (APAC) as a focal growth region due to the vast number of opportunities in this area, particularly within skincare, with a report by Statista showing that the APAC region occupied the greatest market share in 2022.
In this blog, we highlight the new challenges and trends in the beauty industry and Cosmoprof’s recommendations on how to adapt.i
Challenges in the industry
Rise of digitalisation
Increased digitalisation has many benefits:
- Products can be offered at a lower price
- Customer service can be personalised
- Companies can observe a customer’s complete buying journey
- Digital ads can be more specifically targeted
- Audience data can be accessed.
However, it has made the market more crowded and means that companies can sidestep big retailers, selling to consumers directly through platforms like TikTok and Instagram. This presents a challenge for business-to-business companies who must now work harder to stand out and retain their share of the market.
Omnichannel experience
Modern-day consumers expect companies to adopt omnichannel strategies, having both instore and online outlets. These strategies must be fully integrated so consumers can put their trust in whichever channel they choose to purchase from.
Supply chain disruptions
The COVID-19 pandemic, the Ukraine War and now war in Gaza have had a significant impact on the beauty industry’s supply chain and as a result, buyers are reluctant to change suppliers, remaining loyal to stable partners. New businesses trying to enter the market must identify gaps in the market to assert their presence.
Fewer customer touchpoints
Events remain valuable as they facilitate direct dialogue between buyer and retailer which shortens the customer journey. Reduced travel budgets have meant key players in the beauty industry are attending fewer events and when they do attend, they have very specific goals in mind. While strengthening online presence is a potential solution, beauty businesses should also maintain some event attendance where possible.
Industry trends
Sustainability and localism
In a recent study, Bain & Company reported the third most important purchasing criterion for APAC consumers was that a company was ‘good for the planet’.
Alongside this, localism is also a key consumer trend and can be utilised by retailers to achieve their ‘good for the planet’ aims. Localism leads to:
- Improved material traceability
- Ethical production
- Resource efficiency
- A smaller carbon footprint.
Individualisation and personalisation
The ‘one size fits all’ approach has lost its popularity. Information on digital platforms has educated consumers on their unique needs and the pressure is on beauty brands to tailor their products to specific customers. Companies can provide hyper-personalisation through advanced data analytics and technology, including artificial intelligence and augmented reality.
Maintaining your presence
Amongst the new trends and various challenges how can you ensure that your business maintains its place in the market? Most importantly, you need to understand the current beauty buying market, but you should also keep an eye on the market of the future and anticipate potential changes. Once you’ve researched the current and future markets, work on the adaptability of your business; knowledge is worthless if you lack the ability to act upon it.
The Scott Partnership works closely with clients in the beauty and cosmetics industry to communicate effectively with complex audiences and penetrate global markets, particularly in the APAC region.
Contact us for more information on how we can help your beauty business reach new audiences.
References:
[i] Petruzzi D. Breakdown of the cosmetic market worldwide by Geographic Zone, 2022. Statista. September 26, 2023. Accessed November 9, 2023. https://www.statista.com/statistics/243959/breakdown-of-the-cosmetic-market-worldwide-by-geographic-zone/.
[ii] Lightowler Z, Mattios G, Yang J, Zehner D. Unpacking Asia-Pacific Consumers’ new love affair with Sustainability. Bain & Company. June 3, 2022. Accessed November 9, 2023. https://www.bain.com/INSIGHTS/UNPACKING-ASIA-PACIFIC-CONSUMERS-NEW-LOVE-AFFAIR-WITH-SUSTAINABILITY/.
