Artwork Management

Navigating the Evolution of Beauty: Trends and Solutions in the Health & Beauty Industry

29 May 2024

Welcome to a deep dive into the captivating world of the health and beauty industry.

Projected to reach a staggering $580 billion by 2027 (McKinsey), the industry is witnessing a resurgence after the challenges posed by the pandemic.

To sustain this growth, brands and retailers must navigate a landscape marked by escalating competition, changing distribution dynamics, and evolving consumer demands.

This blog highlights eight trends currently in play in the beauty industry and addresses where Esko can help.

The Beauty Industry is a Vast Landscape

The beauty industry is a large, multifaceted and complex business. Not surprisingly, it is trend-sensitive to the Nth degree.

Keep reading to explore the first four trends impacting not just your business, but the entire beauty industry.

1. It’s All About Wellness

As the beauty industry evolves, consumers are becoming more focused on holistic well-being solutions rather than just external beauty.

The trend towards wellness in beauty encompasses everything from stress relief to ingestible beauty products (McKinsey).

Consumers are increasingly prioritizing wellness to feel better both in body and mind, seeking new ways to enrich their lives through personalized routines that cater to their specific needs.

2. A Move Toward Simplicity

Consumers are increasingly prioritizing efficacy and functionality in their beauty products.

Mintel’s Sophisticated Simplicity trend forecasts a shift towards high-quality products with proven effectiveness, emphasizing the importance of simplicity and transparency.

With a growing emphasis on transparency, consumers expect brands to provide scientific evidence supporting product claims. Brands that can offer research, clinical studies, or certifications to substantiate effectiveness are deemed more credible and trustworthy.

3. Understanding Gen-Z Preferences

As Gen-Z emerges as a dominant force in the beauty market, brands must adapt to their unique characteristics and preferences.

McKinsey’s insights into Gen-Z behavior highlight the need for brands to retire traditional approaches and embrace new strategies that resonate with this digitally savvy and diverse generation.

McKinsey indicates that nearly half of Gen-Z consumers extensively research product ingredients and benefits before buying, demonstrating their commitment to informed decision-making.

Additionally, this generation shows a significant commitment to product loyalty. Brands must therefore seek to connect with Gen-Z on multiple levels.

4. The Power of AI in Beauty

Artificial intelligence is playing a significant role in beauty, offering personalized solutions through machine learning algorithms. This brings us to the next beauty trend: Mintel’s Beaut-AI.

Through AI-powered analysis of social media feedback, market trends, and customer preferences, brands gain invaluable insights to develop innovative products tailored to meet evolving consumer demands.

This trend emphasizes the importance of leveraging AI not only to enhance product development speed but also to address gaps in the market, creating inclusive solutions that resonate with consumer demographics.

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Trends and Their Solutions

The next five trends present challenges for brands that can be resolved by harnessing the power of software solutions.

5. Regulatory Compliance

We can’t discuss the impact of beauty industry trends without talking about regulatory compliance.

Yes, we’re talking about MoCRA.

The Modernization of Cosmetic Regulation Act (MoCRA) introduced significant changes, including expanded labeling requirements.

In fact, it was the first update to the Federal Food, Drug, and Cosmetic (FD&C) act since its passage in 1938.

MoCRA included several key provisions to enhance consumer safety and regulatory supervision within the cosmetics sector.

While not all inclusive, the provisions defined collectively illustrate MoCRA’s holistic approach to modernizing cosmetic regulation. For more details, click here.

Blog photo of beauty and commerce and inflation

6. The Inflation Impact

Bain & Company’s Consumer Products Report 2024: Resetting the Growth Agenda contained a survey regarding the top three trends affecting business performance in 2023. Of the respondents, 82% “said inflation had a major impact on business.”

As prices surge across industries, brands must continue to navigate inflationary stresses by innovating cost-efficient production methods and revisiting pricing strategies.

Additionally, by optimizing supply chains, exploring sustainable sourcing options, and enhancing operational efficiencies, companies can mitigate the impact of rising costs.

7. Sustainability is Key

Inflation isn’t the only source of pressure on beauty brands.

Sustainable beauty, characterized by eco-conscious practices, is gaining traction. Consumers demand eco-friendly packaging solutions, driving brands to adopt sustainable practices throughout the product life cycle.

The report on Growing Sustainable Beauty Trends for Emerging Brands in 2023 highlights the significant shift towards sustainability within the beauty industry.

Sustainable beauty, also known as green beauty, is characterized by a holistic approach to personal care, considering both environmental impact and individual well-being.

Consumers are increasingly making conscious choices, favoring products free of harmful chemicals, and produced in environmentally responsible ways.

8. Beauty Gone Digital

Let’s talk ecommerce.

Beauty retail sales are projected to grow annually by 6% globally until 2027, with e-commerce anticipated to encompass a quarter of the beauty market by that time, demonstrating a compound annual growth rate (CAGR) of 12% year over year (McKinsey).

In response to this trend, beauty brands are focusing on developing a seamless omnichannel experience that integrates online and offline touchpoints to enhance customer engagement and foster brand loyalty.

By leveraging data analytics and technology, companies can personalize the shopping journey, offer targeted marketing campaigns, and optimize inventory management across various platforms.

9. Personalization

The beauty industry is increasingly embracing personalization, catering to the growing consumer demand for products tailored to individual needs. This trend manifests in two key ways: mass personalization and boutique personalization directly at point of sale.

But how do you utilize technology to address these trends and challenges?

Blog photo of beauty and personalisation

Solutions for Beauty Brands

An advanced artwork management system, like Esko WebCenter, can help beauty companies free up valuable time and resources, allowing them to focus on meeting the demands resulting from applicable trends.

How does it work?

WebCenter centralizes control over packaging and label assets and streamlines the life cycle of artwork creation and distribution.

It helps brands accelerate speed, minimize waste, and maintain unparalleled omnichannel consistency.

Additionally, WebCenter serves as a shield against risk, enabling brands to meet changing regulation requirements efficiently and accurately, thereby minimizing costly recalls.

Notably, WebCenter’s Sustainability Calculations feature, to be released in the near future, will offer real-time access to sustainability data for different packaging components, allowing users to assess the environmental impact of various materials and designs.

WebCenter also integrates seamlessly with digital platforms, optimizing packaging designs for both physical and digital retail environments. It offers brands the tools needed to streamline processes and reduce time-to-market.

Finally, Esko allows for unique point of sale customization, not only large mass production.

By responding to trends with digital solutions, health and beauty brands can not only meet the diverse needs of today’s consumers but also shape the future of the industry.