Getting ready for peak season? Here are the key consumer behaviours, trends, and data small and medium businesses (SMBs) need to know to nail selling
According to new data from leading consumer intelligence company Nielsen IQ, the global beauty industry saw impressive growth in the first half of 2023, experiencing a growth of 1.5 percentage points to reach 6.4%.
A catalyst for this growth, specifically in the UK, has been the increasing number of small beauty businesses to enter the market. In fact, the Value of Beauty 2023 states that more beauty SMEs were registered in 2022 in comparison to 2015, five times faster than the number of small businesses formed in the manufacturing industry in the same period.
Knowing that the majority of the beauty businesses in the UK are SMEs, and the number of them is increasing rapidly, it is important to stay ahead of the curve when it comes to consumer expectation and the market. In its new whitepaper ‘Thriving as an SMB in the Personal Care industry’, NielsenIQ uncovers key considerations, here’s what we learnt.
Global beauty industry performance has been positive, with Europe, the Middle East and Argentina presenting the most growth
Despite global economic challenges, the personal care sector has shown unique resilience globally. Interestingly, the most growth has been witnessed in Lebanon, Argentina and Turkey which came out on top as the highest performing markets in the previous quarter.
Europe’s total value contribution jumped from 4.6% to 7.7% vs a year ago, which highlight’s the industry’s resilience despite economic pressures.
North America was the only market to experience a drop in performance, falling from 8.8% to 4.2%.
Despite tightening their purse strings due to the rising cost of living, the majority of consumers don’t plan to change their beauty budget
Whilst 52% of consumers plan to spend the same amount on personal care this year, 47% say that small brands are more cost-efficient, and many prefer to buy into smaller businesses due to the brand story.
This consistency in budgeting has also been witnessed in the prestige beauty sector. According to the NPD Group, the market grew by 10% year-on-year.
Pricing strategy is not something that can be set in stone
As a consequence of inflation, the cost of beauty products has undoubtedly increased. In fact, in its survey of 181 businesses, NielsenIQ found that 50% of respondents changed their costs.
However, changing costs has not come as a result of a stringent strategy. Just under half of those surveyed have changed their prices on a trial and error basis, proving that these uncertain times call for agility when it comes to cost structures.
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