EXCLUSIVE: Euromonitor Investigates the State of Beauty

PARIS – The beauty business is on fire.
“The global beauty and personal care market grew by 6 percent on the previous year, which was actually the most dynamic growth recorded in the last decade,” Hannah Symons, global head of beauty research at Euromonitor International, told WWD in an exclusive interview prior to the market research provider’s webinar today, titled “State of Beauty: Trends Shaping the Industry in 2019.”
Last year, the beauty business’ sales worldwide reached $488.3 billion, according to Euromonitor. “These results reflect the resurgence in Latin America, of course Asia’s extremely strong,” the executive continued.
Asia today accounts for one-third of the global industry’s value, and looking to 2023, Euromonitor forecasts China alone will contribute more sales than North America and Latin America combined.
The premium segment has been outpacing mass-market beauty for many years, but in 2018, the latter improved its performance in all regions except Eastern Europe. Mass, said Symons, “picked up its performance on the previous few years and actually closed that growth gap a little.”
In North America, mass doubled its gains in 2018 versus 2017. “In Western Europe, for the first time since 2012, premium and mass grew almost alongside one another,” said the executive, explaining premiumization continues to shape the beauty industry, but that it’s necessary to reevaluate premiumization’s definition. “Now, we’re looking at luxury attributes beyond a higher price tag and beyond the traditional premium perceptions.
“We always say that today’s status symbols are health and good intentions,” continued Symons. “Those are a lot easier to convey to the consumer as a marketing message at any price point. So this is where we’re seeing mass close that gap a little bit on premium.”
Skin care, a category that grew by 8 percent and gained in both the mass and luxury segments, was the standout beauty performer in 2018. Fragrance and makeup sales, meanwhile, were each up 6 percent.
They “did lose a little bit of momentum,” said Symons, explaining those segments are tapping into more micro- than mega-trends. “It’s harder for those categories to relate to the consumer on a health and wellness level.”
Euromonitor focused on three of the main trends driving today’s beauty business: anti-taboo health and beauty, a new era of male beauty and disruptive innovation.
“Anti-taboo health” — such as sexual wellness; skin conditions, like acne or related to chronic diseases; hygiene; hair loss; women’s health, and cannabis — is a noted avenue for growth, according to Symons.
The notion of health is important for growing the beauty and personal care industry. “Healthy was the number-one definition of beauty for consumers in 2018,” said the executive, citing Euromonitor research.
“Preventative health is a key driver of choice for skin care,” continued Symons.
Euromonitor investigated subjects including maternity, fertility, menopause and intimate care, too. “There’s interesting brands coming in, in the women’s space,” said Symons.
Anti-taboo health comprises, as well, hygiene related to teens. For the 15-to-19-year-old set, hygiene and cleanliness are of upmost importance. “There are very few brands that are actually targeting the teen market in a non-gendered…way — just simple products that work,” said Symons.
Also last year, sales of men’s beauty and personal care products advanced 5 percent to $50.96 billion.
“But we don’t see men’s actually taking a greater of the beauty market than ever before,” said Symons. In 2018, the category generated 10 percent of the overall beauty market, versus 11 percent five years ago.
Still, a recent shift in men’s thinking and behavior — in part because of the #MeToo Movement and with more men expecting to leave the workforce to care for dependents — has caused a change in some brands’ marketing messages.
“A new generation of empowered men not bound by traditional stereotypes,” said Symons.
When Euromonitor asked guys why they don’t use certain beauty products, two times more said it was due to a lack of understanding about the items’ usage than those who explained it was because of a dearth of specialized products for them.
So rather than launching gender-specific products, more education is necessary, according to Euromonitor. “There needs to be more focus on that efficacy piece that we see in the overall industry,” said Symons, adding men are looking for solution-oriented products, such as acne treatments.
The market research provider highlighted some main ways to recruit men to the male grooming and wellness segment, including technology, such as smart and voice-activated devices; the direct-to-consumer model, since men often desire privacy when buying grooming products, and the health category.
Technology has been a huge driver of disruptive innovation, with 40 percent of women queried worldwide saying they’ve used a beauty subscription service and 22 percent having used such a service for personal care products. In China, 27 percent of beauty and personal care products are sold online.
Euromonitor identified some weak spots in consumer goods industries, where insurgent brands could take hold, such as low barriers to entry, especially in the skin care space. “Over a quarter of consumers prepare their own DIY beauty treatments at home on a weekly basis,” said Symons.
She also spotlighted limited regulation, no consumer-centricity, resistance to change, limited brand loyalty and investor appeal.
Euromonitor considers there to be different levels of disruption: “Renovators,” which are about reestablishing and repurposing a brand; “innovators” – that grow an entire industry or category through new usage, and “disruptors,” which create entirely new categories or markets.
“It’s about reinventing consumer behavior,” said Symons. “Nobody has disrupted the beauty industry yet.” The executive believes the only way to do so is through “true personalization.”
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