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Experts dig into beauty’s biggest headlines

A blue-chip panel of beauty experts discusses how the mass market can carve out a bigger slice of sales and keep up with the blistering pace of new products.
4/24/2024

The beauty industry is beating the odds. Sales are stagnant in most consumer goods categories, but beauty is soaring. Mass market beauty dollar volume increased 6% in 2023, according to Circana.

We assembled a team of experts to discuss the industry’s biggest challenges and opportunities and what it will take to duplicate last year’s success for the category.

DSN: Last year was solid, but many economic experts portend a slowdown. How would you describe the business climate so far in 2024?
Rich Gallucci, SVP of Sales, Kiss Products: Cloudy with a chance of meatballs! The retail situation seems very guarded. Retailers appear to be concerned, and, in some segments, they are holding onto the reins very tight, wanting to let go but holding buying decisions to the last minute to gauge the economy. While some segments look good, others are struggling. The plethora of competitive brands flooding retail from the internet and overseas are not generating incrementality and in many cases are negatively impacting consumer trials with low quality products. New brands are simply not driving household penetration and growing the segments in many categories.

kelly sobol
Kelly Sobol

Kelly Sobol, SVP of North America Sales and Customer Development, Milani: This year has had an interesting start. We’re still hearing rumblings about economic uncertainty and how consumer spending is being pressured, but beauty is and always has been a resilient category—even when there’s uncertainty in the overall economy and other retail categories are struggling.

[Read more: Subtl difference]

And for brands like Milani, an uncertain economic outlook can benefit sales as consumers look for accessible priced, prestige-quality products. Also, although a few large retailers have shifted out timing on their in-store resets, beauty brands have come out punching anyway, with big launches and big moments. That shows that the beauty industry is definitely still focused on giving consumers what they demand.

Larissa Jensen, Global Beauty Industry Advisor, Circana: The beauty business climate so far in 2024 is tempered. Both the mass and prestige markets are still growing, but at a softer rate than we’ve seen over the past few years. As a result, we anticipate 2024 will be one of change. We’ve begun to see shifts in the types of beauty products consumers are purchasing, which could be indicative of a move to value. In prestige, even as we see some continued spending on luxury products, there is a slowdown happening; alternatively, there is strong growth in minis and gift sets across beauty categories, and in fragrance, body sprays are picking up in popularity. Each of these types of products offers value in some way, from size to price. And this search value could be an opportunity for the mass market in that value is a true keystone of that channel.

Meagan Wos, Category Insights Lead Hair Care/Cosmetics/Oral Care/Intimate Health/Sexual Wellness, Emerson Marketing: As the concept of beauty continues to evolve, the industry has been quick to react to the demands of consumers. This year, the beauty sector is abuzz with discussions centered around advancements in science and technology, as well as a persistent commitment to enhancing sustainability practices. Moreover, the intersection of social media and corporate social responsibility is poised to significantly influence the success of brands and companies operating within this dynamic space.

larissa jensen
Larissa Jensen

DSN: Beauty as a category has been very resilient, yet in many categories, the prestige channel is producing increases that eclipse gains in mass/drug. How can we turn that around?
Jensen: While the mass channel is about convenience and value, the prestige channel is a destination and experience. To bridge the gap, mass retailers have opportunity across product, merchandising and environment. Recognize and translate the trends in prestige, then boost up those types of products or benefits in mass. And one of the biggest drivers in the prestige beauty market has been the treat [yourself] mindset. As a mass retailer, how can you create a space for beauty in your stores where consumers can feel they are treating themselves and not cheating themselves just to save money?

Wos: The prestige beauty sector has experienced substantial growth in recent years and continues to exhibit resilience amid economic uncertainty and unprecedented levels of inflation. Even amidst such challenges, consumers remain unwavering in their commitment to high-quality beauty products. A key distinguishing factor that elevates the prestige segment above other channels lies in its emphasis on the in-store experience. Within the realm of prestige beauty, the physical store surpasses mere retail space to become a destination in itself—a place where consumers can engage with products firsthand and create meaningful interactions with fellow beauty enthusiasts. In this highly competitive landscape, alternative channels vying for market share can enhance their appeal to consumers by prioritizing the in-store experience, offering comprehensive education, and delivering personalized service to help convert prospective shoppers.

Gallucci: The market segments are very disparate. While the high end may be having a bit of a renaissance, the mass mainstream is still finding its ground in a guarded socio-economic environment. Certain channels are doing well, and others are struggling. This is also negatively impacted by the continuation of inferior products being offered by e-commerce, which take sales and profits from leading legacy brands and do not build consumer confidence, loyalty or category growth.

jeremy lowenstein
Jeremy Lowenstein

Jeremy Lowenstein, Chief Marketing Officer, Milani: Milani is in a unique position, given our brand’s DNA of offering an inclusive, affordable luxury assortment that helps bridge the prestige and mass/drugstore customer communities. Milani’s quiet luxury positioning appeals to those already shopping traditional mass outlets, but our brand’s quality formulas also enable us to capture prestige shoppers.

[Read more: The Lip Bar’s innovative inclusivity]

Milani has remained one of the fastest-growing brands in the eye, lip and face category, posting double-digit growth for 30 straight periods. We’ve outpaced category growth for the last nine quarters, indicating that our quiet luxury appeal is really resonating with shoppers.

DSN: How are you keeping up with the need for new, especially as a way to compete with prestige?
Tim Bui, Chief Marketing Officer, Vital’s International Group/Pura D’or: We are in the process of R&D [on] new products that are adaptable to the growing trend. As a small company, we are able to make quick decisions and a faster R&D process. This year alone, we anticipate over 20 new products.

Achelle Richards, VP Product Development, Onyx Brands: This year, we have new packaging and new messaging for our bath and body SKUs. We are bringing all of our nail, foot and bath categories under one cohesive master brand with a full restage. The heritage of our brand is professional premium quality at accessible price points.

“This year, the beauty sector is abuzz with discussions centered around advancements in science and technology, as well as a persistent commitment to enhancing sustainability practices.”
– Meagan Wos, category insights lead hair care/cosmetics/oral care/intimate health/ sexual wellness, Emerson Marketing
deborah dixon
Deborah Dixon

DSN: Research shows Gen Z is returning to physical stores. Are you marketing more to Gen Z and Gen Alpha, or are mature consumers equally or more important for your brand?
Bui: Yes! We are leveraging social media such as TikTok and Instagram to target Gen Z.

Gallucci: We are well aware of the compelling stats around the Gen Z target, their overall buying power and their influence on driving brand and product preferences across other age groups like Gen Alpha and even their parents. While our core brand demographic is 18 to 44, Kiss is a company whose products satisfy multiple age ranges and demographics. We generally target our core consumers, who are beauty enthusiasts. These are power users who are into beauty and drive incremental trips and increased market basket. By targeting the beauty enthusiast, we are also working on bringing new customers to the brand to increase household penetration in our core categories. In the social and digital world, our goal is to constantly innovate and create communities that want to share our products. Through innovation and community, we listen to our consumers and work to remove barriers to purchase.

Deborah Dixon, PH. D., Owner of Precious Mineralz: Precious Mineralz Out Of Mountains products were formulated first and foremost for mature skin, so we are not actively marketing to Gen Z or Gen Alpha. However, we do have products that could be used by consumers in these age ranges. The formulations are robust and repair dry, cracked skin on lips and cuticles. Regardless of age group, there is a consumer base that spends a great deal of time outside during extreme weather changes, either for work or outdoor sports.

chris lopez
Christopher Lopez

Jensen: The beauty industry has always placed a special focus on the younger consumer, with the idea that loyalty can be nurtured from an early age. The flaw in that thinking is twofold. First, the consumer of today is not loyal to brands, regardless of the beauty category. Second, by focusing on younger consumers, brands could lose sight of (or worse—completely
ignore) the needs of the older and more affluent consumers.

[Read more: Navigating the clean beauty maze]

While understanding and meeting the needs of a younger consumer base is certainly important, we can’t ignore the fact that the largest consumer base spending the most money in beauty, across both mass and prestige, is the consumer who is over 55 years old. Ignore them at your own risk.

Christopher Lopez, Marketing Director, Okay Pure Naturals: We like to not think of age. You might have an older person with acne or maybe a younger person interested in using sun care and SPF to reduce early signs of aging. Products cut across ages. What’s most important to retailers are the right price points and strong branding.

achelle richards
Achelle Richards

DSN: What are you doing to make products more sustainable?
Gallucci: Kiss is committed to championing environmental and social sustainability. We have embarked on a global corporate sustainability program that focuses on the planet, people, and products. We’ve established targets and goals for our organization across all three of these areas. In the area of product, we have already begun to implement more environmentally friendly packaging, utilizing almost entirely recycled, reusable or compostable materials, just as one example.

Dixon: Precious Mineralz product containers are all recyclable. We also use numerous upcycled ingredients in our formulations. One key ingredient in the Rich Body Polish is Walnut Shell Powder, which has wonderful exfoliating properties. It is natural and biodegradable. Our unique raw material, Halloysite, is classified as GRAS (Generally Regarded As Safe) by the FDA. It is also on the Commodity Inert List of the USEPA. When we begin formulation on a new skin care product, we do give attention to the sustainable features of ingredients and the final formulation. It is very important to our company, along with a selection of vegan, cruelty-free and “clean” ingredients.

Bui: We constantly work with packaging suppliers to innovate sustainable packaging materials. For example, our plastic is 100% recyclable, our facility is solar-powered and our shampoos are bio-based and biodegradable.

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