By Jordy Pickel, Director of Marketing, Accupac
The beauty care industry was negatively impacted by the global pandemic, and while several product categories saw steep declines, sales for skincare brands have actually increased, by a lot. According to a report published by Fortune Business Insights, the global skincare market will top $200 billion by 2026.
Some factors helped boost skin care’s growth during the pandemic, like an increase in handwashing and sanitization that leads to drier skin. However, skincare has been on the rise for some time. It was normal to see 5% growth year-over-year and heading into 2020, skincare had grown by $6 billion from the year before.
We have seen our collective consciousness awaken to the advantages of healthy skin, the science behind our body and our microbiome, and the mental benefits we get from the pampering of a daily skin regime. Companies are finally addressing the honest differences in individual skin due to ethnicity, gender, or medical conditions, and brands are addressing consumer needs on a sometimes granular level.
This has set the stage for a new wave of emerging brands and a reintroduction of classic labels. Consumers are more educated and informed in the area of skincare so they are eager to seek out new products. In fact, so many brands have emerged recently, that in the prestige channel, the number of brands outside of the top 20 now make up the largest share of market sales — for the first time ever.
Since the market is so accepting of new product lines right now, it has allowed for a great deal of innovation and revolution in the category. Skincare brands launching today are focusing on natural ingredients, science-based messaging, and customized product groups that are as individual as we are.
Retail operations have also been upended and the next decade will be about our industry’s balance between online shopping and brick-and-mortar traffic. This puts some newer skincare brands at an advantage. These brands are built on digital platforms designed to handle the modern shopping workflow. They can handle large quantities of smaller orders and have implemented direct-to-consumer workflows and subscription-based pricing.
Most importantly, they are socially connected directly with their prospective audience. The largest block of spending power now belongs to millennials, who are the most connected generation we’ve ever seen. Beyond already doing a larger share of online purchases compared with other generations, some 90% of millennials — about 72 million people — are on social media. A full 32 million more millennials subscribe to social media than to cable or satellite TV. The social users have a direct line to the army of influencers that test, promote, and recommend new skincare brands.
Predictably, all of this has led to a surge in demand, higher orders, and a strained supply chain from sourcing to manufacturing. Ancillary needs from COVID have only exacerbated the problem. Contract manufacturers are operating and maximum capacity, many of them trying to support things like skincare while also making as much sanitizer and soap as possible. Procurement is experiencing shipment barriers, plant inspections have been modified, and many of those in contract labor has moved out of the workforce.
However, despite these rocky months, the pandemic will subside and skincare will continue its growth. The consumer will not simply abandon their new habits and routines — rather skincare is becoming the newest category to experience the “lipstick effect” during economic downturns. We are in a new age of clean beauty, personal time, pampering, and education, all of which will lead to success in skincare brands.
ABOUT ACCUPAC
Accupac specializes in the beauty and personal care products that move us, formulating, making, filling, and testing some of the most trusted brands in skin, oral, and hair care. Facilities are FDA and cGMP compliant, designed to integrate seamlessly into client manufacturing workflows, and fully-equipped with in-house microbiology and analytical testing labs. Customers rely on Accupac’s expertise to navigate supply chain workflows and keep product launches on track.
About Jordy
Jordy Pickel is the Director of Marketing at Accupac, helping to connect brands with outsourced manufacturing. He has worked in B2B marketing for more than 15 years, specializing in digital marketing and brand management.
To learn more about Accupac, Click Here.
Categorized in: Trends/Insights