Nancy Jeffries, Correspondent02.18.22
Cosmetic Executive Women (CEW) and chairwoman Jill Scalamandre, president, bareMinerals, presented the State of the Beauty Industry Report 2022 during a virtual event on February 9th, 2022.
Beauty industry executives discusssed trends, consumers—and sales. Scroll down to take a look at the top beauty brands and launches of 2021 in makeup, hair care, skin care, and fragrance.
Here's a play-by-play of the discussion, before the top brands were revealed.
Opening the event, Scalamandre thanked lead sponsor, Mane, and supporting sponsors Nielsen IQ, Mintel, Mason Hub, Beauty Inc, Fairchild Media Group, Moss®, and Kaplow, and introduced the event speakers.Examining trends and top performers in the industry were:
- Courtney Emery, Vice President, Product Strategy, Sparks & Honey
- Sarah Jindal, Senior Director, Beauty, Mintel
- Yarden Horwitz, Co-Founder, Spate
- Flynn Matthews, Global Head of Insights & Measurement – CPG Google
- Tara James Taylor, Senior Vice President Beauty Personal Care Vertical, NielsenIQ
- Marshal Cohen, Chief Industry Advisor, The NPD Group
- Larissa Jensen, Vice President, Industry Advisor, Beauty, The NPD Group
Areas of Opportunity—A Look at Gen Z
Courtney Emery, Sparks & Honey, kicked off the presentation with a look at the ways in which their trademarked "Q" cultural intelligence platform helps organizations take advantage of the current accelerating cultural changes.Through its taxonomy, "Q" identifies tangible manifestations of culture, looks at relevant culture tags, and ultimately reveals the cultural zeitgeist, and the ways in which particular phenomena are impacting and disrupting beauty. Emery focused primarily on Gen Z in her presentation.
She explained how the "Q" platform deciphers a variety of issues getting the most tags, from climate change and gender fluidity, to the dismantling of European beauty standards.
Top 5 Culture Tags Disrupting Beauty for Gen Z
- Radical Inclusion
- Price point transparency
- Green-Weary
- Meta Makeup
- Customization Nation
Notable among the findings was a growing neurodivergent-conscious awareness, in which the needs of consumers sensitive to noise and crowds are being addressed. Emery noted that brands are increasingly aware of the importance of developing products with hypersensitive consumers in mind.
Gen Z, said to be the most fluid and racially diverse demographic, is challenging product developers; and as the most financially literate generation, they are also entering the job market at a challenging time, and looking for stimulating, creative job-seeking solutions.
They are pushing beyond “eco-friendly” claims, said Emery; and while 43% (Sparks & Honey) claim to feel guilty about shopping on Amazon, they still do, but seek more environmental and sustainable products.
Gen Z is also the most plugged in, and making the boldest meta-makeup choices, largely based on their online participation.
Emery identified a tension between their search for authenticity, and their meta-makeup experimentation; a classic minimal versus meta paradox.
Finally, their interest in customization and personalization is challenging tech giants to start offering more diagnostic tools and “made by me” solutions. Brands should be proving now why consumers should trust them, concluded Emery.
The Pandemic's Lasting Effect on Consumers
Sarah Jindal, Mintel, noted how the pandemic has left lasting changes on consumers globally, citing the changing role of identity and the importance of ethics.In the past two years, morality has taken focus as consumers demand progress around sustainability, and take action for the greater good.
As young activists like Greta Thunberg and Mitzi Jonelle Tan resist lip service and urge decisive action, brands have an opportunity to connect and guide consumers and give them positive reasons to adopt a more sustainable lifestyle. Jindal said that measurable metrics for true transparency are growing and measuring sustainability goals.
“Environmental sustainability needs to be shown by brands in order for consumers’ expectations to be met,” said Jindal.
This includes forward thinking, transparent and authentic brands, and the inclusion of sustainable packaging and sustainability goals. She emphasized the need for brands to recognize shifting identities among consumers, as they push for better representation of their diverse identities.
“There is also a drive for digital development Apps, like Zepeto, which allows users to see themselves in a 3D world,” said Jindal. She cited L’Oréal’s launch of a virtual ambassador, and the need for a merging of digital and physical to encourage conscious purchase, explaining the digital world allows for freedom of self-expression.
She cited the launch of the Nose Shop in Japan, which allows consumers to choose their fragrances digitally, through a selection of words and descriptors that express their emotions.
Amplifying the idea that beauty is whatever you want it to be, Jindal suggested that brands speak creatively to their consumers and integrate their ideas. She noted the Inuit Tattoo Revitalization project, and Hair Oiling from Fable & Mane, which emphasizes Indian cultural traditions of beauty. “Authenticity voids remain to be filled, so cultural understanding can add some success to brands and aid in driving the conversation,” said Jindal.
“Being future ready also means brands should embrace diversity and consumers where they are today,” she said. This is not an emphasis on aspirational beauty, but rather an emphasis on authenticity. Brands will also need to think about spanning the digital and the real, linking the tangible and the digital in new and exciting ways that hyper connect with new concepts and limited editions.
Search Trends Reveal Shifting Market Needs
Yarden Horwitz, Spate, and Flynn Matthews, Google, focused on the intersection of digital growth and beauty trends.Matthews said that the digital shift is still strong, and in 2021, Google identified a +30% growth in beauty searches. Hair color has grown; skin care has pulled back; and makeup and fragrance have grown. All signs of the changing times in which we live. Ouai was just acquired by P&G, and interesting changes continue to occur in all categories. Matthews said, “While skin care is staying consistent, fragrance is getting stronger.”
Growing themes included clinical skincare, patches, and hyperpigmentation. Among hair care brands, Olaplex is “crushing it,” and Nutrafoil and Redken are strong. In Makeup, MAC, Clinique, L’Oréal, Charlotte Tilbury and Estée Lauder were top performers.
“Last year was all about lashes, but this year it’s about makeup artistry,” said Horwitz. Trends in beauty are shifting, with derm trends in particular, revealing a lot about where consumers are in terms of preference and identity.
In 2019, ingredient dominance took center stage; in 2020, safety, disinfectants, stress needs, for example remedies for mascne and eye bags, came to the fore. In 2021, comfort became a significant driver.
Aesop Hand Cream made a strong showing, and products that treated sensitive skin with body butters and derm recommended products came to the rescue of frequent hand-washers and mask wearers.
The year 2022 will be the era of trust, with treatments now shifting to trusted recommendations. “Increased use of SPF is finally becoming cool,” said Matthews, “and is appearing in barrier creams, as well as makeup, tinted moisturizers and suncare-specific products. SPF is spiking year-round,” she said.
In 2021 skincare became social, and the popularity of “cool derms” online, brought medical authority to the social space. These dermatologists brought authenticity and fun to consumers without sacrificing authority.
“Legitimate skincare information is coming across socially and holds great promise,” said Horwitz. “Consumers are also turning to derms for recommendations for shampoos,” she added, noting the growth of hair loss shampoos, and hair products for thinning and shedding. Ingredients driving these purchases included rosemary, pumpkin, minoxidil, and caffeine.
Top trending hairstyles included curtain bangs, mullets, shag haircuts, and there is a growing emphasis on products that achieve styling goals.
Makeup trends included white eyeliner, soap brows, and 70’s style, with butterfly eyeliner and smudged looks going strong.
Lipstick continues to be strong, with the stick format growing in other beauty products, such as makeup sticks, eyeshadow, and contouring sticks. Innovation was also seen in applications, like eyebrow stamps and stickers.
Nails were particularly strong in innovation and design, bringing some of the nail looks to the face.
A lot of interest in mature beauty prompted specific searches around eye-related skin care. Boomers, those among the 58-67 year-range, searched for eye care area and complexion needs, particularly for those areas susceptible to gravity.
“These are untapped opportunities for brands to create around these issues,” said Matthews. She explained that complexion searches for mature skin are increasing, in particular for foundation, primer, concealer, and eye concealer. “Marketing opportunities exist for brands to address these issues,” said Matthews.
Self-Care and Clean Beauty
Tara James Taylor, NielsenIQ, began her beauty overview with a look at the impact of pandemic-inspired anxiety and the environment.“Over 54% of women say the struggle to manage is real in light of the pandemic, and anxieties abound,” said Taylor.
She noted that 61% agree that environmental issues have an adverse impact on health. In 2021, trends gravitated toward relaxation and self-expression; and consumers sought more intense colors and a return to glamour. Taking care of yourself from the inside out and the outside in, gained momentum.
“As the pandemic wanes, consumers are returning to beauty-focused outlets, while sustainability remains top of mind,” said Taylor.
Clean beauty continues to evolve, with +15% growth; and paraben-free and plastic-free continue to impact consumer purchase. “Fair trade is on the rise and the clean shopper continues to be more inclusive. Clean beauty is not just for those with deep pockets, as clean beauty products continue to be for everyone, and should be marketed as such,” said Taylor.
She noted that “deodorants need to clean up their ingredients,” as some deodorant products contain aluminum and parabens, as do some beauty products, as well. “So, this is a call to action,” said Taylor.
She also cited a need for preparation for inflationary times in health and beauty care. People are willing to pay higher prices for higher value, and as higher priced items are coming into stores, and the impact of freight and shipping prices continues to be on the rise, it is important for brands to showcase the benefits that consumers find most authentic, explained Taylor.
To that end, Taylor said that health, wellness, sleep, stress management, relationships, and emotional support continue to be strong drivers.
“This is really important, since there are 50,000 beauty products online, so it is critical to have the right assortment, and the specialty products and personalizing that consumers desire,” she said. To sum up, Taylor urged the following: evolve your sustainability efforts; prepare for inflation; and support your consumers.
Quality, Pricing and The Covid Lifestyle
Marshal Cohen, Chief Industry Advisor, The NPD Group said consumers are showing willingness to pay for higher quality and convenience.“Pricing is a big story and higher priced products are happening in beauty, and elsewhere. The Covid lifestyle is carrying over into 2022 and even into 2023, as health, home, and fitness continue to be top of mind,” he said.
“Another big story was the seismic supply shift, although products did arrive, they arrived late,” he said. In addition, he noted a change in demographics, income level shifts, and upper level income driving growth.
“There was also significant growth in the Hispanic market, as well as an increase in the 55+ cohorts’ increased spending power. Macro-economic signals will be worth watching as we navigate into 2022,” said Cohen.
“As consumers return to normal, a personal focus will rebound in the form of beauty and fashion, and maintaining fundamental needs will continue to be strong as pandemic ‘high-fliers’ level off,” said Cohen.
While stores are starting to regain traction, Cohen noted that inventory challenges will remain, and pricing will be the number one big story line. Promotion is likely to return, and while “beauty has its own cadence of growth,” innovation will be key, with brands needing to create products that get consumers to engage. “This will be an interesting challenge, as consumers will also spend more money on experiences. It’s a tremendously opportunistic year for brands,” concluded Cohen.
Performance in the Prestige Beauty Channel
Larissa Jensen, Vice President, Industry Advisor, Beauty, The NPD Group, asked attendees to picture the emergence of promise, acknowledging that consumers are finding ways to seek joy.“Prestige beauty in 2021 was a year full of surprises. Prestige sales in 2020 set the industry back five years, and it took a year to recover. The biggest surprise of the year was fragrance, which is bigger than skincare,” she said. More buyers were spending more money on fragrance and hair, (+3.6 percent growth), which translated to 12 million more buyers; and buyer penetration was largely driven by Black and Hispanic consumers.
Jensen also noted an increase in brick and mortar sales, as workers returned to offices. “Brick and mortar is not dead,” she said, as it averaged higher volume in 2021 than in the prior two years.
Prestige Beauty Channel Performance saw Brick & Mortar recovery driving growth across all categories.
Sales Growth—Brick & Mortar
- In Makeup, Brick & Mortar was up +45%
- Skincare +47%
- Fragrance +64%
- Hair +75%
- A total of +54% in all four categories
Direct retail models struggled in 2021, unlike prestige. Bath and body retailers remained healthy with growth of +9%. Also, noteworthy, was the momentum of Black founded brands, said Jensen, noting more shelf space and retailer advocacy. Black founded hair brands were particularly strong, with +70% sales growth (NPD).
Growing consumer investment in fragrance was a sign of the times. Elevated indulgences in fragrance have brought about changes in the way brands are reacting to shifting consumer preference.
There is an emphasis on artistry, love, and self-fulfillment through fragrance, rather than the hypersexualized messages previously associated with fragrance and its marketing. Creative concepts in makeup are also strong, as artistry drives growth and generates consumer excitement.
Likewise, the democratization of skincare; skinvestors, i.e., fact and science-driven consumer preference; and the resurgence of the classic, with increased interest in such products as Clinique’s Black Honey for lips, which Jensen noted is “practically impossible to find”, and Peter Thomas Roth’s Eye Tightener, continuing to impact sales.
Holiday 2021 Fragrance Sales
Holiday 2021 made news, with fragrance capturing 45% of holiday sales.Total fragrance sales in 2019 were $4 billion, noted Jensen; and they were $2 billion in 2021 holiday sales alone.
Beauty usage was also said to be occasion-correlated, as well as fueled by both necessity and escape. Fragrance buyers said that purchase was made as a treat for themselves.
Jensen predicted global recovery in 2022 across Europe, Canada, and Mexico; and said there would be a normalization of the consumer mindset. Recovery would vary by category, region, and country, she said, predicting that beauty dollar sales through 2024 would remain elevated versus pre-pandemic levels.
She followed with an overview of the top launches of 2021.
Top Beauty Launches & Brands of 2021
In U.S. Hair Care 2021, Olaplex No. 8 Bond Intense Moisture Mask was the big winner, generating over $10 million.Top 5 Hair Brands
- Olaplex
- Redken
- Biolage
- Pureology
- Living Proof
Top Skincare Brands
- Clinique
- Estée Lauder
- Lancôme
- The Ordinary
- La Mer
The Top Launch in Skincare
- Clinique Moisture Surge 100H Auto-Replenishing Hydrator
Other top skincare performers in 2021 were—
- Clarins Double Serum Complete Age Control Concentrate
- Kiehl’s Crème de la Corps Refill
Top Launch in Makeup
- Dior Addict Lip Glow Balm
Top 5 Makeup Brands
- MAC
- Benefit
- Clinique
- Lancôme
- Tarte
Top Performer in Women’s Prestige Fragrance—
- Flora by Gucci Gorgeous Gardenia EDP
Top 5 Prestige Women’s Fragrance 'Parent Brands'
- Chanel Chance
- Chanel Coco Mademoiselle
- Carolina Herrera Good Girl
- Marc Jacobs Daisy Marc Jacobs,
- Dior Miss Dior
Top Men's Fragrance
- Ralph Lauren Ralph’s Club
Top 5 Men’s Prestige 'Parent Brands'
- Dior Sauvage
- Chanel Bleu De Chanel
- Armani Acqua Di Gio Pour Homme
- YSL Y Homme
- Gucci Guilty Homme
Top 10 Fragrance Launches
- Flora by Gucci Gorgeous Gardenia EDP
- Carolina Herrera Very Good Girl
- Ralph Lauren Ralph’s Club
- Paco Rabanne Phantom
- Miss Dior 2021
- Estée Lauder Beautiful Magnolia
- YSL Y Le Parfum
- Azzaro The Most Wanted
- Michael Kors Gorgeous! Eau De Parfum
- Burberry Hero
“Looking ahead, fragrance holds the key. It is our glimmer of sunshine,” said Jensen.
She concluded, “Clearly, consumers will spend on products that bring them joy, and doesn’t all of beauty do that?”
