Insights from NielsenIQ, Iced Media, Mintel, The NPD Group, Spate and Google illustrate the importance of brand agility during what is likely to be a tumultuous year ahead.
By Noor Lobad Plus Icon
How should beauty businesses prepare to navigate a tumultuous landscape?
By leaning into stores, community and wellness, according to the experts at CEW’s virtual 2023 State of the Beauty Industry event, featuring data and insights from Spate, Google, The NPD Group, Mintel, NielsenIQ and social media marketing agency Iced Media.
The firms detailed emerging themes and consumer sentiments that would be key to navigating the landscape in 2023.
Among those are: the importance of bringing experiential marketing to brick-and-mortar in addition to digital; a shift toward community (versus individual) wellness, mounting consumer preference toward claim-backed beauty and personal care products, and the resilience of prestige beauty, which was the lone CPG industry to see increases in both revenue and unit sales in 2022 — yet still has significant room for growth when it comes to catering to consumers with curly and coily hair textures, NPD noted.
Kicking off the presentations was Leslie Ann Hall, chief executive officer and cofounder of Iced Media, a partner of brands including Kiehl’s, Paula’s Choice and La Roche-Posay (which Spate later identified as 2023’s top skin care brand by average monthly search volume), who discussed how to create paid social content that converts to sales.
“Paid creator content on social outperforms brand content by almost 2:1,” said Hall, a phenomenon she refers to as the “TikTokification of ads,” which she said has taken hold of social platforms with the exception of Meta, where, “Brand content outperforms creator, but it’s pretty much neck-and-neck, and we forecast that will change this year.”
She also pointed to of-the-moment advertisement types, such as TikTok display cards and Snapchat’s tappable context cards (which are in beta testing until March) as some of brands’ best bets to reach new consumers via social media.
Sarah Jindal, senior director of beauty and personal care at Mintel, spoke to the “medicalization” of beauty, which she says is fueled in part by consumers increasingly prioritizing product efficacy, but also by the rise of medical and skin care experts as the “next wave” of influencers (see @dermdoctor, @pillowtalkderm on TikTok).
“Consumers want to know they’re spending their money in the right place, and skin care consumers in particular are looking for recommendations from either doctors or dermatologists,” said Jindal, adding that consumer education regarding ingredients is at an all-time-high, and consumers are subsequently expecting brands to be more up-front about efficacy claims and study data.
Jindal also touched on the evolving direction of the self-care movement. While personalized care is indeed on the rise thanks to emerging technology enabling advanced diagnostics, post-pandemic consumers seeking connection are increasingly thinking about more than just themselves when it comes to wellness.
“One of the things that we’re looking at is this new approach to wellness that won’t be singular,” said Jindal, noting the growing menopause conversation as one area in which this mentality is already taking hold. “The kindness movement and community self-care will definitely expand as we move away from that more insular thinking, and start putting the health and well-being of the collective at the forefront.”
Yarden Horwitz of Spate and Google’s Flynn Matthews discussed the deceleration in skin care searches over the past year, adding that fragrance, men’s grooming, makeup and hair care all saw respective increases.
Horwitz backed Jindal’s assessment that consumers are increasingly looking for claim-backed products and ingredients, adding that the mentality is expanding beyond skin care and into hair care, too.
K18, Nutrafol, Dyson, Drybar and Mielle Organics were the top-searched hair care brands in 2022, while Fenty Beauty, Charlotte Tilbury, E.l.f. Cosmetics, Rare Beauty and Nars Cosmetics led the way in terms of makeup, Horwitz said.
Overall, consumer search data indicated convenience and “anti-beauty beauty” are front-of-mind for consumers, with multitasking products continuing to rise (and time-saving products like eyeliner stamps taking things a step further), and celebrities like Julia Fox and Doja Cat driving interest in unconventional, otherworldly beauty looks.
“There’s this whole idea of, ‘I don’t want to be pretty — I want to be iconic.’ Consumers don’t want to just be another pretty face on the TikTok feed, they want to be able to stand out,” said Horwitz.
Tara Taylor, global senior vice president of NielsenIQ’s beauty vertical, and Larissa Jensen, vice president and beauty industry advisor at NPD, both spoke about how mounting economic pressure will impact consumer purchase decisions this year.
According to NielsenIQ, 40 percent of beauty consumers reported they would stop buying cosmetics if incomes are challenged this year, while only 10 percent reported they would stop buying hair care.
Taylor noted that while beauty sales are up, unit sales are down in the mass market, with brick-and-mortar seeing the highest declines. Prestige beauty, on the other hand, saw increases in both sales and unit sales — the only sector to experience this across the consumer sectors NPD tracks.
Jensen reported total beauty sales grew 11 percent in dollars versus 2021, reaching almost $93 billion across makeup, hair care, skin care and fragrance. While the mass market unsurprisingly held a larger share of sales (roughly 70 percent), prestige beauty has grown at roughly twice the rate of mass over the last two years, she said.
“Many of the areas in mass with unit declines are also the strongest performing areas in prestige today,” said Jensen, pointing to hair styling, hair care and fragrances as examples. There is, though, a whitespace in prestige when it comes to textured hair care, with Jensen noting that only 5 percent of hair products in the prestige market are catered to curly and coily hair types.
According to NPD, the top five prestige skin care brands by dollar sales of 2022 were Clinique, Lancôme, Estée Lauder, The Ordinary and La Mer, while the top five mass skin care brands were CeraVe, Neutrogena, Olay, Cetaphil and Aveeno.
