In its new State of Fashion, Beauty report Business of Fashion proves that product efficacy, a refreshed marketing perspective and utilisation of AI are crucial to success for beauty leaders
Business of Beauty and McKinsey and Company have collaborated on a new iteration of their global beauty report, uncovering executive forecasts, consumer behaviours and key recommendations for success.
Launched at the The Business of Beauty Global Forum in Napa Valley, California, the report is an extensive rundown of the state of beauty. At the event, the publication and L’Oréal Group also announced the winners of the Global Beauty Awards, honouring Akt London, Commune, Manasi 7, Ruka, Unifrom and Yse Beauty for their success.
Let’s dive into the report…
Amidst the current climate of geopolitical and economic uncertainty, the $441 billion global beauty industry is ‘showing signs of cooling’. So, how can brands maintain velocity in an increasingly saturated market? Let’s get into it.
Product Efficacy and Price Point Are Key
Commenting on its survey of close to 4000 consumers, Priya Rao, Executive Editor of The Business of Beauty, and Kristi Weaver, Personal Care and Wellness Leader at McKinsey & Company, report that ‘consumer scrutiny on perceived value’ is the most significant theme shaping consumer behaviours in beauty.
As a result of tightening purse strings, a consequence of global economic strains, people are less willing to splurge on specific items and are increasingly conscious of cost – 83 percent of consumers surveyed feel hair care is affordable, but that figure drops to 67 percent for fragrances.
With a less wealthy—and therefore increasingly wary—consumer, beauty leaders must focus on efficacy and accessibility in order to thrive. The report suggests that greater investment in research and development is needed to satisfy customers who are more focused on product performance than ever.
Could this be the end of the influencer?
The report states that an ‘over reliance on paid marketing has saturated digital channels, while influencers’ sway is also waning.’ As such, excessive reliance on famous founders or influencer endorsements are no longer enough to ensure the staying power of a beauty business.
In fact, The Business of Beauty Report notes that such factors are ‘among the lowest considerations’ for today’s consumers. Instead, strong brand aesthetics and an emphasis on original and personal stories are most effective.
In the survey, consumers were asked about the top ten attributes influencing brand purchase. Across all categories, efficacy and quality came out on top whilst brand resonation, newness and premium price point fell short.
Now’s the time to harness the potential of Ai
Finally, the report recommends more robust adoption of AI as a driver of profitable growth – especially when applied to research and development, quality control, social listening, and personalised marketing.
In a survey of close to 100 beauty executives, only 10 percent are using AI regularly, and 60 percent are still in an exploratory phase. There is no denying that this must be scaled to propel success and cut through. However, it is noted that consumer facing use must be treated with caution to ensure brands maintain consumer trust.
You can find out more about the report here.
