The American beauty industry is expanding every year, as 2018 saw a 6 percent increase in total sales over 2017, with $18.8 billion spent on beauty products. The biggest gainers were hair products (25 percent growth) and skincare (13 percent growth), and those market segments will assuredly receive a considerable amount of attention from retailers in 2019. However, continued growth in the prestige beauty industry is far from a guarantee. As consumer tendencies shift, and people look for more specific answers to their beauty-related issues, the industry must continue to adapt in order to avoid leveling off.
One area of increased focus is that of natural beauty products, which start with ingredients that are good for your skin, and avoid the usage of harsh chemicals. In addition, consumers these days are interested in products that include naturopathic ingredients, based on alternative medicine and self-healing. The market for natural skincare products is booming, with a growth rate roughly double that of the overall skincare market according to The NPD Group, and with Gen Z consumers entering the marketplace, products that align with their values are expected to continue their rapid growth.
Along those lines, beauty brands are championing causes that can help them tap into this growing market sector. As demand for transparency and authenticity continues to rise, expect more brands to invest in cruelty-free products that use natural ingredients, as well as beauty items that can be classified as vegan.
In addition, products that support sustainable business practices are expected to gain popularity, and we could also see an increase in beauty brands donating a portion of their profits to charities that align with these social missions. In fact, there are already plenty of companies doing just that ― for example, La Mer has pledged to donate up to $650,000 to ocean conservation efforts, and sustainable packaging. With non-recyclable plastics becoming decidedly unpopular with environmentally conscious consumers, beauty brands are faced with the need to adapt their strategies to meet the demand for easily recyclable packaging. From smaller packages that are easier to transport, to reducing waste, to reducing the environmental impact of producing the packaging itself, there are several ways that beauty brands are embracing this change.
It’s not all about sustainability though, as the trend of unique and attractive packaging that’s sweeping the entire retail world is also making a significant impact in the beauty industry. Today’s consumers want to purchase beauty products that make their shelves look appealing, with products that fit in with the decor and design of the space they’re stored in. It should come as no surprise that consumers also enjoy products that are packaged in a way that adds perceived value.
Another big part of appealing to a younger demographic is embracing technological advancements. As 2019 yields to 2020, expect to see the debut of custom 3D printed face masks that fit the contours of each individual’s face, along with an increased focus on personalized skincare products that address the biological needs of each consumer, while also adapting to their lifestyles. The popularity of CBD and hemp-based beauty products will likely continue to trend upward as well, as consumers flock to the anti-inflammatory and moisturizing qualities of these ingredients.
Finally, 2020 might be the year that ecommerce makes a significant impact in the beauty industry. Seeing as beauty brands like Sephora and Ulta are already major online retail players, this number is likely a bit of a surprise, but ecommerce only represents 1.5 percent of total sales among leading health and beauty retailers, with drug stores like CVS and Walgreens continuing to dominate the American retail market. However, thanks in part to Amazon’s recently debuted private label beauty products line, the online retail giant expects double-digit growth in this sector by 2023.
As you can see, there are many factors involved with crafting the health and beauty consumer experience in 2019 and beyond. By tapping into the attitudes of a new generation of consumers, the beauty industry should continue to see significant growth year after year.