Amidst the backdrop of global inflation, economic instability, technological advancements, and rapidly changing consumer behaviors, the beauty industry has faced challenges and uncertainties that few brands were prepared for.
Over the past year, brands have had to make strategic shifts and unexpected cuts to manage significant fluctuations in demand, changes in distribution channels, and disruptions in the supply chain.
With the rise of new digital consumer platforms like TikTok Shop and the advent of cutting-edge technologies like generative AI, brands have been compelled to accelerate their digital transformation efforts like never before.
"In the beauty and personal care industries, competition is fierce, and innovation is constant. Your success is only as enduring as your latest innovation,” says Elizabeth Papasakelariou, Consumer Products Lead, North America, at Publicis Sapient.
To understand what matters most to consumers in today’s beauty landscape, Publicis Sapient surveyed global customers on topics like brand loyalty, sustainability, and the impact of generative AI. Their findings, combined with expert insights, reveal the top trends shaping the beauty and personal care industry in 2024.
So, what’s next for beauty in 2024? The central theme is demand volatility. Here’s how this trend is expected to unfold and how brands can strategically respond.
- Last year, prices for beauty and personal care products were highly volatile due to the rising costs of raw materials. This volatility, especially concerning natural ingredients, has affected product pricing and consumer affordability, leading to unpredictable demand patterns.
- Ingredients like lavender, glycerin, or citric acid have seen rapid price increases, forcing brands to either reformulate their products or raise prices.
- Consumers, already grappling with the cost-of-living crisis, have also had to cut back on their spending, making it challenging to predict how broader economic inflation will impact beauty and personal care brands in the coming year.
Focus on Innovation and Rebranding: Advancements in artificial intelligence will enable brands to adapt to fluctuations in raw material costs by automating reformulation processes, creating prototypes, and conducting virtual testing.
- The past year has seen a surge in direct-to-consumer (D2C) and digitally-native beauty and personal care brands pushing the boundaries of product innovation, particularly in the clean beauty and beauty science sectors. From biomimetic hair science products to mood-enhancing fragrances and adaptive foundations, standing out in this crowded market has become increasingly challenging. However, the unpredictable demand for these emerging brands also impacts legacy players.
- “While there are many small beauty brands today, a ‘one-hit wonder’ phenomenon is emerging, where disruptor brands go viral with a specific product but struggle to achieve long-term success beyond that,” notes Elizabeth Papasakelariou.
Emphasize Heritage and Legacy : Highlighting a brand’s established reputation and unique selling points can help it stand out from fleeting trends. There’s a reason why certain beauty and personal care brands have thrived for decades, and it’s important to remember that longevity is a powerful asset.
- The saturated beauty and personal care market poses challenges not only for legacy brands but also for consumers overwhelmed by the plethora of new products available online. The impact of social media on beauty trends has led to a decrease in brand loyalty.
- According to a Publicis Sapient global survey, more than half of global consumers report having little or no brand loyalty. Retail shelves are filled with new and unfamiliar products, while social media platforms like TikTok continuously showcase new products through paid and organic content. As a result, consumers, particularly Gen Z, are easily swayed by the latest trends and celebrity endorsements.
- Approximately 35 percent of Gen Z consumers use social media to discover and evaluate new brands and products, making it difficult for brands to predict and meet evolving consumer demands.
Personalization and Data Analysis : Leveraging consumer data and search trends to personalize product recommendations and develop formulas that address emerging interests, such as snail mucin, rosemary oil, or hyaluronic acid, can help brands stay ahead of the curve.
- Demand for sustainable beauty products continues to grow in 2024, but the higher price tags associated with these products create a dilemma for brands trying to balance sustainability goals with affordability.
- While 66 percent of consumers don’t trust sustainability labeling, half of them do trust companies that are transparent about their sourcing and production methods. However, clearly communicating the origins of raw materials or ethical labor practices through packaging or brand content is no easy task—assuming brands have access to this information in the first place.
- “How do you visually show or explain an ethical supply chain to the everyday consumer, beyond a sustainability label? It will be interesting to see how brands make blockchain practices and transparency accessible and consumer-friendly,” says Elizabeth Papasakelariou.
Transparency and Traceability : Using tools like blockchain to demonstrate ethical sourcing, sustainable practices, and product authenticity can help build trust with eco-conscious consumers. Brands can also use refillable or glass packaging as a visual cue for sustainability, rather than relying solely on certifications.
- Demand volatility also applies to beauty industry technology, as trends in this area come and go. Certain digital experiences, such as augmented reality (AR) product try-ons, AI-generated product recommendations, and automated shopping assistants, have become standard in the beauty and personal care industry. However, in 2024, brands have an opportunity to extend these technologies across both in-person and digital channels.
- For instance, while consumers can receive a personalized shampoo formula based on photos of their scalp and lifestyle information online, this level of personalization doesn’t always carry over to in-store or online retail experiences. Generative AI-powered chatbots may learn about consumer haircare preferences, but the in-store experience often remains traditional and unchanged.
Bridging the Online-Offline Gap: Integrating online and offline experiences by offering seamless omnichannel customer support and personalized recommendations in physical stores can create a more cohesive and modern shopping experience.
The trends shaping the beauty and personal care industry in 2024 are a mix of the novel and the predictable.
While sustainability has been a priority for over a decade, the recent surge in demand for clean beauty products has been unprecedented. Similarly, rising costs and supply chain disruptions have posed significant challenges, but the potential of generative AI to reformulate products based on various factors is a new frontier. Brands that can navigate these trends effectively will be well-positioned to thrive in the evolving beauty landscape.