Beauty retailing in the US is evolving and becoming more flexible to meet consumers’ needs and shopping preferences. Consumer behavior has shifted and there is an increased interest in wellness-related beauty products and value offerings. While digital channels now have a more critical role in the shopping experience, in-person shopping is still very important. It’s imperative for brands to seamlessly integrate omnichannel marketing and shopping experiences to create a positive consumer interaction.
Market activity
Before the COVID-19 pandemic, the beauty market experienced conservative growth. From 2019 to 2020 there was an increase in sales as consumers stockpiled products and prioritized their health and hygiene. Occasion-based categories, such as makeup, were hit hard during the pandemic as consumers pulled back from nonessential spending and skipped activities outside of home. Meanwhile, more frequently used categories and those perceived as essential, such as skincare and bodycare, thrived.
US retail sales of beauty products are expected to have earned modest growth in 2021 as consumers resumed more ‘normal’ lifestyles and activities outside home. Moving forward, both the physical store and online shopping will be key to the industry’s growth as consumers get used to flexibly shopping across channels.
As consumers resume their pre-pandemic lifestyles, such as working out of home and attending face-to-face classes and social events, occasion-based categories like makeup are picking back up but not without challenges. In 2022 and beyond, beauty and personal care routines will look different from how they did before the pandemic, reflecting simplified beauty and personal care routines and a heightened focus on wellness.
Opportunities for brands
Consumer interest in products that support health and hygiene has created a huge innovation opportunity for beauty brands. Brands should look beyond ‘traditional’ beauty products and highlight ingredients with healthful properties.
According to Mintel Global Consumer research on holistic US consumers, almost half say ‘improving the quality of rest/sleep’ is a top wellness priority right now. Brands need to keep in mind that products including wellness ingredients such as lavender or chamomile can be positioned to help consumers relax and even sleep better.
For retailers, this provides an opportunity to blur the lines between wellness and beauty and expand their offering of products with beauty benefits and consider placing them within the beauty aisle.
SkinTe – collagen-infused sparkling tea drinks – offers products that contain collagen, super herbs, antioxidants and ingredients that benefit skin, hair, nails, joints, mood and overall well-being. This type of offering could be appealing to those looking to rejuvenate their appearance and possibly drive consumers away from procedures like Botox.
Expanding beauty audiences
The US population is aging and older consumers are accounting for a larger share of the total population. Currently, purchases of beauty and personal care products peak among consumers aged 35-44. If older consumers are not engaged in the beauty market, this could bring challenges and slow growth in the years to come.
As a result, brands and retailers may want to cover the needs of an aging population through formulations and product application, and incorporate more inclusive imagery and messaging.
On the other end of the age spectrum, the fertility rate in 2020 was at its lowest in the last 10 years. This demographic shift could mean consumers will give greater attention to – and spend more money on – the children in their lives. Brands should consider expanding new product development and marketing spend to appeal to young parents as they are increasingly focused on their children’s health and hygiene.
For example, Kylie Jenner launched a baby care line called Kylie Baby. The brand is clean, vegan, cruelty-free and fragrance-free and is composed of gentle skincare and haircare products and other merchandise.
What we think
Wellbeing is being prioritized ahead of appearance
For many, the pandemic is shifting focus to overall wellbeing, prioritizing health and hygiene more than appearance. As lifestyles and activities outside of home resume, wellness-related beauty products will continue to be the center of attention, while occasion-based categories such as makeup will slowly pick up in demand.
Consumers want more bang for their buck
There is a value-focused mindset influencing beauty-related purchase decisions. Consumers want to make informed and justified purchases, and are leaning towards retailers that offer savings and convenience. Additionally, they are simplifying their beauty routines as an avenue to protect their pockets, time and environment. Moving forward, value with its multiple dimensions will continue to be a key driver for beauty purchases.
Retail must be flexible and streamlined
While shopping for beauty in stores is preferred, consumers’ comfort with shopping online continues to increase and they are becoming more accustomed to shopping across channels. Moving forward, seamless shopping experiences that bridge the digital and physical worlds should be prioritized, as well as streamlined strategies that guide beauty shoppers throughout their journey.
