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Monitoring market shifts and acting on them is a major challenge for founders and investors. Consulting clients expect for me to be their eyes and ears and apprise them of market shifts, trends, opportunities and potentially threatening competitive changes. By staying updated on these trends and shifts, businesses can better adapt their strategies to meet consumer demands and stay competitive in the market.
Let’s explore the skin care market!
The clean beauty market is reshaping the beauty industry, driven by consumer demand for safer, more sustainable products. The skin care market is focusing on holistic approaches to beauty and wellness. There's an increasing demand for sustainable packaging, cruelty-free products, and inclusive formulations. Consumers are looking for products that offer multi-benefit solutions and skinification (skin-like benefits). The industry is also seeing a rise in digitalization and personalization. Here some trends and insights to follow:
The Clean Beauty Movement
The clean beauty movement began with a focus on products free from harmful ingredients. Manufacturers began cleaning up their products by removing harmful ingredients not limited to parabens, sulfates and phthalates. The efforts paid off, over half of beauty and personal care products being sold in the U.S. are currently paraben-free with the growth rate continuing to outpace the total category (+3.6% vs +2.0%)
Consumers leaning towards consciousness
Consumers’ personal values are driving clean beauty industry growth as indicated in Mintel’s The Clean Beauty Market & Rise of Conscious Cosmetics. For example, Japanese consumers actively consider clean beauty issues when purchasing beauty products, with 1 in 4 opting for products with environmental/eco-friendly claims.
Brands “Get Personal”
While personalization isn’t a new trend, beauty brands are continuing to incorporate technology, Artificial Intelligence to offer customized products and solutions for consumers. 75% of consumers are more likely to make a purchase when recommendations are personalized to them.
Innovation and Technology: Advances in biotechnology and green chemistry are enabling the development of high-performance clean beauty products. Collaborations with influencers and celebrities are also helping to drive awareness and adoption.
Sustainability and Ethical Practices
The clean beauty trend is closely linked with sustainability. Brands are adopting eco-friendly packaging, cruelty-free testing, and ethically sourced ingredients to meet consumer expectations.
Banned Products and Ingredients
The EU has banned 150 more beauty product ingredients than the U.S. There are over 1300 substances completely banned, heavily regulated or restricted from use in cosmetics.
Understanding Global Regulatory Challenges
At the heart of regulation is the European Union’s REACH the European chemicals agency. Adopted to improve the protection of human health and environment from risks imposed by chemicals. REACH applies to all chemical substances in items such as cleaning products, paint, clothes, furniture and electrical appliances.
In the Clean Beauty Market, the online distribution channel is the largest due to the growing preference for convenient and accessible shopping experiences among consumers. Online platforms provide a broad range of clean beauty products with detailed information, customer reviews, and the convenience of home delivery, which appeals to the increasingly digital-savvy consumer base.
Gen Z consumers are 1.3 times more likely to want to try environmentally friendly products and are more interested in sustainable products.
35% of consumers say they’re spending more time on skincare while spending time at home during the pandemic. Likewise, consumers are more educated about ingredients and more motivated to make eco-conscience purchasing decisions.
Collaborations and Partnerships
Collaborations and Partnerships with retailers, influencers, celebrities and other brands are facilitating growth in the clean beauty sector. Here's a brief overview of how these brands have leveraged collaborations and partnerships:
Goop
Goop, founded by Gwyneth Paltrow, has collaborated with various brands to create unique products and experiences. For example, Goop partnered with CB2to create a curated collection of furniture and accessories inspired by modern Parisian apartments and mid-century Italian modernist furniture. Another notable collaboration is with Evolvetogether, launching a limited-edition dissolvable, zero-waste soap bar.
Glossier
Glossier has made significant strides through partnerships, most notably with the Women's National Basketball Association (WNBA). This partnership makes Glossier the WNBA's first-ever beauty partner, integrating beauty and sports in a groundbreaking way. Glossier also has an affiliate program that allows influencers and experts to promote their products, further expanding their reach.
Target
Target has partnered with Ulta Beauty to create a "shop-in-shop" experience called Ulta Beauty at Target. This collaboration brings Ulta Beauty's curated selection of prestige beauty brands to Target stores and online, providing customers with a seamless shopping experience. The partnership includes more than 50 specially curated prestige brands, making beauty products more accessible to a broader audience.
Whether you’re an investor or a founder, staying up to date on industry trends and shifts, businesses can better adapt their strategies to meet consumer demands and stay competitive in the market. Investors can better support portfolio companies with insights on market changes, and find opportunities to capitalize on them.
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