The sensitive skincare community is on the rise, and people are educating themselves on the topic, including the difference between AHA, alpha hydroxy acid, and BHA, beta hydroxy acid (1).
If you are wondering, they are somewhat similar, but AHA is water-soluble and works on the skin’s surface, while BHA is oil-based and penetrates skin pores (2).
Their research is not stopping there. Other cosmetic chemicals such as hyaluronic acid, l-carnitine, retinol, coq10, benzoyl peroxide, niacinamide, and tretinoin are getting hundreds of thousands of monthly searches. On the other hand, vague terms such as “acne cream” only get about 40k (3).
The trend indicates that people are getting significantly interested in what companies are putting on their products, with the subreddit r/skincareaddiction (4) getting more than one million followers (5).
Interest in specific skincare chemicals are soaring, according to the search volume increase over the past year in Google Trends:
- AHA BHA: 234%↑
- Niacinamide: 233%↑
- Retinol: 124%↑
- Tretinoin: 123%↑
- Hyaluronic acid: 50%↑
- Benzoyl peroxide: 50%↑
- CoQ10: 10%↑
The Rise of Informed Skincare Consumer in India
The beauty in India has been rapidly changing over the past few years.
The typical Indian woman knows the value of DIY beauty remedies based on ancient Ayurveda. She has coconut oil in her hair and favors gram flour, yogurt, and turmeric-based scrubs and masks.
A significant number of women, particularly from rural India, still use talcum powder on their faces for glowing and “lighter” skin. A possible hangover of the colonial era, as some commentators put it.
The Indian millennial, though, thinks otherwise. As we have previously discussed in our story, Behind the Success of ‘Natural’ Beauty Startups in India, they want to be more of the products they are using and know that homemade remedies are not the answer to every skin concern. A fair complexion is certainly not their goal. And more importantly, they are winning to invest more in skincare brands that tick the right boxes.
Today’s millennials want to be informed; they want formulas that are effective, safe, and have massive and visible results.
“The Indian consumers that care about what they put on their face has increased significantly,” says Dr. Aneesh Sheth, a pharmacist, Co-founder, and CEO of Dr. Seth’s, a skincare brand (6). “They want to know about the concentration of active ingredients, their source. They want to know about the packaging materials and how much of them are made from recycled materials. Today’s consumers are pickier and know what they want to use.”
Vasudha Rai, a beauty influencer, author, and Harper’s Bazaar India’s former beauty director, also agrees with the growing sophistication of the Indian consumers. “Today’s Indian consumers are extremely informed and have the money to purchase effective skincare products.”
According to leading Indian dermatologists, Indians are now more concerned with preventive care. Consequently, sunblock and Vitamin C are becoming ubiquitous. Nearly everyone is concerned with pigmentation, marks, acne, etc., and wants to treat it.
The pandemic has been a significant catalyst to the surge in skincare demand in India. People want to keep a routine, practice self-care, and appreciate having more time to experiment with formulas.
Lockdown also forced people to engage in educational content and interact with influencers who know more about skincare. It gave people ample time to dedicate to their skincare routine and research solutions to solve their concerns effectively (7).
It suggests that beauty brands that use marketing to capitalize on the trend and educate people will get ahead.
For instance, specific brands like The Ordinary (8), whose slogan is clinical formulations with integrity, and Drunk Elephant (9) have gotten consumers’ attention with more than 6.6k searches for “the ordinary hyaluronic acid” and 9.9k for “drunk elephant retinol” monthly.
Earlier this year, Estee Lauder bought Deciem, the parent company of The Ordinary, at a valuation of 2.2 billion USD.
“Deciem has cultivated an authentic brand with highly effective, must-have products, with an engaging and uniquely transparent communication style. The company’s hero products, digital and consumer-first approach with desirable innovation have been instrumental to its success,”
said Fabrizio Freda, the CEO and President of Estee Lauder.
It is also worth highlighting that Deciem has grown rapidly over the past year, achieving net sales of about 460 million USD for the 12 months ended on 31 January 2021 (10).
Today, consumers seek brands that are transparent in their list of ingredients and natural in their products. And the success of The Ordinary indicates that it is time for beauty brands to use marketing to educate their target consumers.
There has been a high interest in facial serum, especially those containing chemicals of interest.
As noted, Google’s search interest for “The Ordinary hyaluronic acid” has been taking off.
Other attractive serum niches include retinol serum and vitamin C serum. Search interest for both has doubled over the past year.
According to Google Trends, the growth in search terms related to the actual serum effects has been flatlined over the past year. For instance, “best serum for glowing skin” and “anti-aging serum” have no increase.
After facial care, data indicates that haircare would be the next up as people start to delve into the science behind hair care products.
Like skincare, searches for science-based hair products with a center on specific ingredients and pH-balancing are taking off. Hence, brands that focus on educating their consumers via marketing stand to win big.
Other Emerging Skin Trends
There is more on how beauty brands can enhance their customer experience and capitalize on rising trends.
Considering the statistics that there is a mere ~20k dermatologists in India, many of whom have no access to their patients in the pandemic, virtual dermatology consultation and teledermatology are set to become a necessity (13). While we have online doctor consulting platforms like Practo and 1mg with several other platforms offering online consultations, we also have a dermatologist-led website, Redemico (14).
Founded in 2017, according to Crunchbase, Redemico has secured over 500k USD seed funding from VC firms like Venture Catalysts and Paipal Ventures. Meanwhile, Skin City and SakhiyaSkin are other dermatologist-led websites on the block, offering online and tele personalized skincare solutions to help Indian consumers to achieve their skin health goals.
Less Will Be More
Even post-pandemic, we will see more people cutting back on multi-step skincare routines for several reasons (15). It is mainly because many people have less expendable cash because of the economic downturn amid the pandemic and the increasing awareness about the beauty industry’s impact on climate change and the overall environment.
It means beauty brands that will offer multipurpose products, those that work extra instead of multi-step regimes, will boom. Consumers will appreciate using one product instead of multiple ones to get the same results. It will help them save money and reduce the risk of skin irritation and sensitivity.
While on the topic, let us mention the huge uptake of the BeautyCycle recycling scheme, launched in 2019 (16). People loved it as the scheme allowed them to dispose of their beauty packaging in a green way while also getting rewards for it. Brands following similar notions will also benefit in 2021 and upcoming years.
Face Care, Hair Care, and So Will Bodycare
Once people master the skin and hair, they will whip the skin on their bodies. It means beauty brands will need to invest more in body scrubs, serums, oils, and exfoliants as people will soon start treating their bodies with the same quality of care as they do to their faces.
As per Google Trends, there has been a massive surge in the body care segment over the past few years.
Beauty Subscription Boxes Are Still Alive and Rising
Beauty brands can offer subscription services and curation services to differentiate. Services which aim to surprise customers by offering them new items or highly personalized experiences can win big in the upcoming years.
According to reports (17), the value of the subscription box market will rise 72% by 2020. A recent survey from First Insight on subscription boxes highlights that 25% of consumers in the US, both women, and men are currently receiving a subscription box, and the other 32% of respondents plan to subscribe in the upcoming six months (18).
Meanwhile, as we talked about in our story, The She Economy: The New Mantra for Business Success, women are more likely to dominate the market by 2027 because of the surge in their working population. There is a shift in female shopping preference towards convenience, and brands that can keep up with the trends and offer subscription boxes for hosiery, beauty, and apparel can win big (19).
Beauty subscription services and men’s grooming services are among the largest growth opportunities in the market. Hence, it is no surprise that it is garnering the attention of brands and huge retailers like P&G, Gillette on Demand, Sephora, Play!, and Walmart (Beauty Box).
While beauty boxes fulfill the replenishment needs of the subscribers, brands can also offer the excitement of getting to try new products. According to a McKinsey study (20), subscribers want something new and innovative to keep subscribing, and most of them expect personalized subscriptions to be more tailored over time.
For more insights, read our previous stories, Here is What You Need to Do Before Switching to Subscription-Based Business Model, and The Rising Trend of Subscription-based Business Model.
FabFitFun is one instance of a subscription service ticking these boxes. Their subscription box is curated around product recommendations in beauty, interior design, and health. It has been growing 300% a year and generated 200 million USD in annual revenue as of 2018.
And as the subscription box service keeps on growing, we can expect to see more brands keeping the excitement alive by utilizing content marketing and social media to drum up a brand community sense.
What’s Next for Beauty E-commerce?
AR, VR, and Tech Collaborations
In 2019, Perfect Corp, the world’s leading AR firm, collaborated with Jack Ma’s Alibaba Group. They combined YouCam Makeup AR virtual try-on technology into Tmall and Taobao’s online shopping experiences (21).
It brought new virtual try-outs to consumers in China, and only six months into using the technology, Alibaba revealed that there had been a 4x increase in their conversion rate (22).
Since then, new technologies have come into the beauty industry, with household brands like NARS, L’Oreal, and MAC adopting AI, VR, and AR.
Amit Jain, L’Oreal India’s MD, stated that due to the market impact and changing consumer habits exacerbated by the recent pandemic, the brand had set a mission to “evolve from a beauty brand to a beauty technology company. (23)”
And he is not alone. A skincare brand based in Malaysia, Nutox has also partnered with Ministry XR to build a “skin analysis tool” powered by computer vision and deep learning to offer consumers a hyper-personalized experience when shopping for skincare products, something which is pretty difficult to purchase without trying on samples in-store.
According to Nutox, the deployment of the AR tool allowed the company to engage with their consumers, and it also added value to their conversion and sales, with consumers voting the company more than a skin brand.
Other brands such as Charlotte Tilbury, YSL, Maybelline, and Chanel also offer VR try-on services across their mobile apps and websites to allow consumers to try on makeup products virtually.
Leveraging Big Data for New Product Development
“The next big thing in beauty is a community,” said Jennifer Goldfarb, co-founder of Ipsy at WWD’s Beauty forum in early 2020 (24). “The brands that will do big in the future are those that can activate their consumers, followers, fans and bring them to the brand, help them build it with marketing, product development, and all other business aspects.”
How do brands achieve it? Enters big data in the beauty industry, gathered via search term data, questionnaires, and spending habits.
Olay transformed its 2016 downward trajectory by implementing digital strategies in its workflow and creating a deeper understanding of its consumers.
The brand launched Olay Skin Advisor in association with Procter and Gamble, a web-based, data-collective tool to help consumers know the right products for their skin.
So far, it has collected over six million data points, which has significantly impacted Olay’s product development.
For instance, Olay decided to create a new product Olay Retinol 24, after it saw that retinol was the top search ingredient.
More brands across the beauty industry are using data collection and analysis, exceeding their development process.
Proven, a beauty startup analyzed data collected freely from the internet and used AI to digest thousands of reviews, evaluate more than 20k ingredients, and peer review thousands of scientific articles. Proven programmed an entire bespoke beauty regime for its individual users with its massive machine learning and database (25).
Meanwhile, Prose, a custom hair care brand based in Paris, has a team of in-house data engineers looking to understand similarities between customers and what ingredients they can tweak to increase their satisfaction. According to the company, it could increase customer satisfaction by 30 points, about 90% last year.
According to AdNews’ recent market analysis (26), collaborations in any industry are 30x cheaper than any digital ads because of the ability to tap into already existing consumers.
It is especially true for the beauty industry. Whenever a unique makeup partnership rolls out, many social media posts and reviews generate excitement for product sales. Often, the audience sees these products as collectible. A standout example: Andy Warhol and NARS. It generates a huge demand for similar releases in the industry.
So when interests like a favorite tv show or childhood snack are combined with beauty and makeup, joining the existing audiences of the brands together in the marketing move, called co-branding, more customers, even those who wouldn’t typically purchase makeup, would find it appealing (27).
Both Cheetos and Hershey utilized this business model recently.
Cheetos captured the audience’s enthusiasm with newly released Cheetos-themed bronzer palettes, eyeshadows, and an XXTRA Flamin’Hot lip gloss kit.
Similarly, Hershey collaborated with Etude House, a Korean beauty brand, to create chocolate bar-themed products. The line featured two eyeshadow palettes, Hershey’s Creamy Milk Chocolate bar and another mimicking its Cookies ‘N’ Creme bar packaging.
The line’s unique product and packaging met stellar reviews for the collective’s quality and quickly became a bestseller.
In 2021 and even further, this beauty ecommerce trend is set to continue with brands like Coca Cola partnering with Morphe (28), MAC collaborating with a popular Chinese online game, Honor of Kings (29), and Mentos lending its name to a new range by Innisfree (30).
It is not only brands taking advantage; with digital ads becoming a more convoluted space, co-branding with influencers is also becoming a new way of combining two audiences sets and creating excitement, sales, and brand following.
Colourpop released multiple collaborations with YouTubers in the recent past, which boasts more than four million subscribers and collaborations with micro-influencers. The brand launched solely on social media platforms and gathered a cult following, which gave the small brand shelf space to both Ulta and Sephora.
As influencers keep hold of the collaborative and digital space, more brands have started to use audiences available to them.
Beauty brands have a unique position to create strong personal bonds with their consumers. And they can learn a lot from how they have done it till today.
These beauty trends give us a taste of where the industry is going and how businesses can leverage them. Stay tuned for more stories!