By Anna Mayo, VP Beauty Vertical, NIQ
Who doesn’t love the process of discovering a new beauty product? We’ve all felt that rush of excitement that a new beauty find can generate. Innovation is part of what keeps beauty consumers so engaged in the category; 75% of beauty shoppers purchase more than 10 different brands in a given year, which adds up to a lot of experimentation and product testing.
Innovation is critical in the beauty industry, with about 10% of annual sales attributed to new innovation. With beauty being a $90B+ category, that’s over $9B in annual sales due to innovation. Innovation is not easy; only about 10% of new brands are able to sustain in market for the long term. With this comes risk, but continuing innovation is the cost of remaining top of mind with shoppers.
Each year, the NIQ Beauty Vertical collaborates with the innovation experts at NIQ BASES to produce a report highlighting the major themes that are driving the beauty industry forward, where we analyze new products and brands that are launched in mass retail as well as in beauty e-commerce. By looking at which new-to-market products have performed strongly in their first year, we can understand which themes are resonating most strongly with beauty consumers.
This past year, NIQ found four major themes in beauty innovation:
Clean and Sustainable
Consumers are increasingly concerned about the environment, and they are looking for products that are made with natural ingredients and sustainable packaging. As a result, we saw a number of new clean and sustainable beauty brands launch in 2022, and many existing brands also reformulated their products to be more sustainable.
Trusted Representatives
Another major trend in beauty innovation in 2022 was the use of trusted representatives to market beauty products. This trend was driven by the increasing popularity of social media, which has made it easier for brands to connect with consumers. As a result, we saw a number of beauty brands partner with celebrities, influencers, and doctors to promote their products.
Personalization and Inclusivity
Consumers are looking for products that are specifically designed for their individual needs, and they are also looking for brands that are inclusive of all skin tones and hair types. As a result, we saw a number of new beauty brands launch with a focus on personalization and inclusivity, and many existing brands also introduced new products that were designed to meet the needs of a wider range of consumers.
Ingredient Focused
Consumers are becoming more educated about the ingredients in their beauty products, and they are looking for products that are made with high-quality ingredients that are safe for their skin and hair. As a result, we saw a number of new beauty brands launch with a focus on ingredient transparency, and many existing brands also reformulated their products to use more natural and effective ingredients.
NIQ has seen some changes in dynamics impacting innovation in the beauty category. As manufacturers have been faced with a series of challenges, many decided to pull back on innovation and focus their efforts elsewhere. This resulted in a 19% decline in new product innovation in 2022 compared to 2019. Brands who pulled back on innovation ended up paying the price for it. Those manufacturers who continued to innovate during this time, were 2.9 times more likely to grow their overall franchise sales versus those who pulled back on innovation. This proves the importance of enduring innovation, even when faced with a crisis.
ABOUT ANNA MAYO
As a Client Director for NielsenIQ’s Beauty Vertical, Anna Mayo is an innovative thought leader within the beauty and personal care retailing space. NielsenIQ’s beauty and personal care insights cover 100 global markets, providing the industry’s most total view into omnichannel consumption and, in turn, empowering the next decade of beauty.
Throughout her 9 years at NielsenIQ, Anna has worked with cross functional teams to deliver proactive, industry-shaping insights and guide some of the world’s largest CPG clients through behavioral shifts and consumption trends. In her current role, Anna partners with beauty and personal care clients to develop cutting edge solutions, leverage new technology, drive marketing and sales strategies and identify unmet consumer needs. In addition, Anna is responsible for leading thought leadership for the Beauty Vertical, serving as an industry expert and appearing in broadcasts and publications such as Women’s Wear Daily and FOX Business, most recently.
Anna has a Master’s in Business from the University of Connecticut and resides in Connecticut with her husband and two children.
Categorized in: Trends/Insights