A new report by Beauty Pie and The Future Laboratory points out how a period of financial uncertainty and increased free time during the pandemic has increased access to greater information to the consumer about the efficacy of products and supply chain.
The Beauty Futures 2025: Beauty, Beautility and the Rise of ‘Question Everything’ Economy report highlights how 15 beauty brands are sourcing their products from the same three manufacturers and post-manufacturing markups are leading to wildly varying retail pricing.
With inflated product markups, consumers are paying higher prices for products with the same ingredients, the report states.
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“Why is it still an industry that does things the ‘traditional’ way?" said Marcia Kilgore, founder of Beauty Pie. "Why perpetuate the myth that people want to buy into the mystique of beauty; the smoke and mirrors, rather than the glorious revelations of the ingredients, technology and artistry? Why is it OK still to be paying crazy retailer markups, and not even know that the stuff you’re actually paying for might only cost a tenth of the price to make and manufacture?”
Higher prices mean that consumers are not only re-evaluating their spending habits but also researching the varying cost structures and calling for fairness in the beauty industry when it comes to price points and product efficacy.
Armed with this new wealth of information, the average consumer is also no longer falling victim or being easily sold products marketed with buzzwords but instead asking companies to deliver the facts — that includes being given the lowdown on everything from ingredients to prove that the products actually work.
According to stats from The Hut Group, searches for beauty-related ingredients rose by 229% in 2021 alone.
“Across generations and across the world, people are now looking for experiences, services and products that help them become better versions of themselves,” said The Future Laboratory’s co-founder Chris Sanderson. “This mission to be healthier, wealthier and happier is leading to the rise of the transformation economy, putting new demands on brands to deliver more meaning to their customers.”
Consumers today are also turning to their own communities to learn more about a product, often turning to influencers and their peers. According to the report, 62% of those surveyed look to their community when it comes to learning more about a product, which has resulted in brands pivoting to see how they can begin to forge a more meaningful connection with the modern-day shopper.
This turn has led brands, specifically direct-to-consumer ones, to look into how they can build longer-term connections with consumers and provide more value. This has begun to evolve into memberships to aid in building interactive communities with the average consumer.
“We commissioned this report to explore the evolving attitudes to luxury and fairness, and the growing consumer instinct to be part of something bigger — and to see if our instinct that overpaying is officially over is correct,” Kilgore said. “The Beauty Futures 2025: Beauty, Beautility and the Rise of the 'Question Everything' Economy report shows how this will create new challenges for future facing brands, but also exciting opportunities to create a more honest, open and fair industry."
The future of the beauty category and how consumers are shopping for their must-haves is evolving and in order to connect with the consumer, it is clear that brands need to continue to be more transparent about everything, the companies said.