BeautyMatter NEXT Summit spotlights industry trends evolving in 2024

28 Nov 2023 --- The BeautyMatter NEXT Summit, held last month in Los Angeles, US, highlights trends from the show floor that organizers expect to see shaping the industry in the new year. 

“As 2023 draws to a close, economic uncertainty and inflationary pressures continue to challenge the beauty retail sector in a variety of ways. But the beauty sector is one of the few industries that remains a beacon of light amid all of the instability,” says Ying Yang, SVP and director of business development at Rosenthal Trade Capital, who authored the BeautyMatter report.

“Strolling through the BeautyMatter ‘SuperMarket’ swag area, attendees were gleefully ‘shopping’ for the latest hot products, like K18’s viral molecular hair mask, the holy grail Olaplex bonding oil, BrowFriend’s red-light therapy tool and a waterless vitamin C-based brightening and firming serum by Matter of Fact, just to name a few,” she details.

“The overall beauty market (including skin care, fragrance, makeup and hair care) is projected to reach over US$450 billion for 2023.”

TikTok engine continues to fuel engagement
Social selling on various platforms and the enduring prevalence of TikTok will continue to shape the way brands market products and engage with their highly segmented communities, Yang highlights.

Driven by targeted social media campaigns, men are much more curious today about their skincare and health options than they were ten years ago.While millennials seem to favor Instagram, she notes TikTok still rules supreme for Gen Zers. Dune Suncare co-founder and CEO Emily Doyle recognize that consumers aren’t just scrolling through TikTok anymore to find the latest hot product, they’re actually relying on the platform to get educated. 

“Today’s consumers are obsessed with a product’s ‘why’ and ‘how’ and want to know how a product will make them look and feel better than the rest of the competition out there,” Doyle says.

“Because of this, consumers are taking a sincere interest in ingredient stories and delving into platforms like TikTok to help educate them and weed through the plethora of options.”

In social engagement and community building, many brands now feel a responsibility to help shape the conversation around motivations for beauty and its impact on mental well-being. 

“The line between healthy self-care and obsessive self-destruction can be razor thin,” says Paul Baek, founder and formulator of Matter of Fact, a healthy aging skin care brand.

Boosting formulas with essential SPF
While prevention has always been a major factor in solving skin problems, it is now an “absolute beauty buzzword,” says Yang. 

“We’ve seen a major uptick in discussion around sun care and its efficacy and safety, as well as increased activity and innovations in formulation, application and delivery, whether in stand-alone products or blended with other cosmetics,” she notes. 

Dune Suncare has created a collection of skin tone-inclusive gel sun care products that tout a myriad of additional skin care benefits. The brand can attest to the boom sun care is experiencing at the moment. 

“Consumers are starting to understand that sunscreen truly is the number-one beauty product on the market,” says Doyle. “You can spend US$150 on a specialty serum from a prestige retailer and it’s 100% less effective at keeping you looking youthful than your US$8 sunscreen from a 24-hour drug store.” 

This approach, mainly through the support of user-generated content is also reflected in the growing practice of blending prevention with beauty among both mass and prestige brands as they continue to add sun care capabilities into their lineup of offerings.

Beauty for all
The beauty sector has seen a steady climb in male consumers over the last few years and that trend will likely continue its upward swing, with the global male grooming market expected to reach US$100 billion by 2030, highlights Yang.

“Some theorize that this uptick can be attributed to the rise in highly targeted social selling that is able to reach a much bigger population of male consumers,” she remarks. “Social marketing and selling, along with the more intimate experiences of browsing and buying beauty products online (versus physical retail locations) have presented many appealing opportunities for male consumers to enter the market and invest in self-care routines for the first time.”

The BeautyMatter NEXT Summit, held last month in Los Angeles, US (Image credit: BeautyMatter NEXT Summit).“Men are much more curious today about their skincare and health options than they were ten years ago, mainly through the sheer number of brands they’re pummeled with via ads on social media,” adds Doyle. 

Baek believes his personal journey of skin care struggles prior to starting Matter of Fact in 2018 resonates with both men and women sharing the same concerns. One of his goals is to make his consumers feel less overwhelmed and more educated and empowered about their purchasing decisions.

Responding to a more diverse audience, brands are increasingly considering a broader range of skin colors, hair types, ethnicities and gender identities.

For Dune, having a go-to-market strategy at inception that created inclusive products that could be used and loved by all has been key to the brand’s success. 

Doyle says the company found ways to innovate and reach broad audiences early on through clean, “universally appealing” packaging, a unisex signature fragrance, and a “smart, playful tone” across marketing, branding and retail platforms. 

“While you can’t be all things to all people, it’s become almost essential that companies have an inclusive message in their brand representation,” underscores Yang. 

Original influencers
Yang says a key concern founders share once their brand enters a retail partnership is how to achieve high sell-through and remain on the shelf. “It can be complicated given the limited resources emerging brands may have,” she notes.

Beauty advisors and the role they play in shaping a brand’s retail performance continue to be an important part of the business strategy mix. When Matter of Fact launched on Sephora online as well as in 270 store locations, one of the strategies Baek employed was working closely with the team that would be training the beauty advisors.

“They are the original influencers,” says Baek. “I cannot be more grateful for their role in leading customers to our line.”

Other industry experts also advised that creating short training videos on a consistent basis for the field team is critical, but these retail-focused tools are only effective when paired with segmented consumer marketing strategies in an omnichannel world. 

Capital raise and debt financing 
The sheer amount of capital required for a beauty brand to effectively market and compete in such a saturated and fast-paced sector has reached new heights. “At the same time, it’s also become incredibly important to maintain sufficient inventory for all sales channels to ensure that one isn’t completely depleted from rapid sales of a trending item,” notes Yang.

Sun care has seen increased activity and innovations in formulation, application and delivery, whether in stand-alone products or blended with other cosmetics.While having a healthy and innovative pipeline is also advantageous, all of these growth strategies require capital. Whether bootstrapped or funded by investors, many new companies are focusing on capitalization planning. 

“In today’s restrictive banking environment, which has been exacerbated by investors who are more disciplined and skittish than previous years, it’s become even more challenging to raise capital,” says Yang.

“Rather than displaying impressive top-line growth, investors are now looking for businesses that exhibit the ability to grow sustainably and maintain healthy margins and profitability (or at least can demonstrate a clear path to profitability).”

Yang adds that a successful growth trajectory is rooted in product efficacy and brand appeal rather than based solely on the “hot trends and happenstance” that may not pass the test of time.

While many founders at the BeautyMatter NEXT Summit expressed interest in learning about how to better position their brands and prepare for a desirable liquidity event, asset-based lending and purchase order financing were also hot topics among these business owners and entrepreneurs. 

“The right debt financing can fund inventory purchases once a company lands on a highly coveted retail shelf,” says Yang. “And while there are many alternative lenders out there, not all money is the same.”

“Finding the right financing partner with deep experience and knowledge in the fast-growing and ever-changing beauty landscape is an important step in a brand’s journey to scale successfully and, even one day, achieve a noteworthy exit.”

Looking further into prominent industry themes, Personal Care Insights caught up with Innova Market Insights and BDI-BioLife Science on the latest in skin care ingredient trends that could steal the spotlight in the new year.

By Benjamin Ferrer