Forecasting and planning during turbulent economic times is extremely difficult. The coming year is full of uncertainty across nearly every industry, and the personal care category is no exception. Recent industry webinars hosted by Beauty Matter and Cosmetic Executive Women, backed by data from both Spate and Nielsen IQ, highlighted some of the predicted challenges ahead, while offering avenues to reinforce connections with consumers and continue innovating in key areas such as sustainability and top consumer trends.
According to Spate, personal care product searches began slowing down in August after a robust resurgence post-lockdown. The slowdown continued through September and is likely to persist for the next 12 to 18 months for the category overall. Inflation is impacting everyone – from Boomers to Gen Z, across all income tiers. According to NielsenIQ, CPG prices have risen 8% as a whole, with Beauty’s price increases accelerating from 4% to 8% in recent months. This means that though dollar-sales remain strong across the category, unit sales have dipped and will continue to fall if inflation persists.
Yet, as the webinar panelists pointed out, there remain opportunities for brands to lean-in to their customers’ needs to continue delivering value and to stay relevant.
1. Communicate Transparently with Customers
Consumers have a massive amount of information at their fingertips, but sorting through it all can be difficult. Customers are looking for truth, not gimmicks. That’s why people seek out brands and products that are transparent and authentic. When telling your story, be clear about topics such as what you stand for, how you define sustainability, and how you maintain your brand and product accountability.
Being upfront and honest about challenges such as supply chain delays or price increases can also help reinforce trust. As supply challenges continue to plague the economy as a whole, customers have demonstrated their willingness to wait for their favorite brands and products.
2. Work with Trusted Suppliers
Working with trusted suppliers who are also transparent about their supply chain can help avoid tough conversations with customers on two fronts: product availability and ingredient transparency. Understanding your value chain and potential points of failure is key to forecasting and mitigating risk. Suppliers should be honest about any vulnerabilities in their supply chains and proactively communicate potential delays and/or quality issues.
In addition, ingredient suppliers can help brands clearly tell the ingredient story by providing documentation surrounding efficacy, fair trade, and sustainability claims. The industry is trending towards an increased role of science and research, and brands will be held accountable for any and all claims made in their marketing.
3. Dig into Hero Products & Ingredients
Across consumer goods, there has been a shift towards reducing excess. Personal care routines, closets, and cabinets are all being edited to the essentials. Focusing your messaging around popular products and ingredients can help cut through the clutter and highlight the unique benefits your customers are searching for. Tell a clear and transparent ingredient story and back it up with science, research, and data for even more stickiness. Highlight compelling founder and origin stories. Innovate, listen, follow trends and watch for opportunities to introduce your next hero product or product line.
4. Monitor and Respond to Trends
According to the expert panelists, there are several current and emerging trends that are expected to have staying power through the coming year:
- Vegan Products & Ingredients
- Korean Beauty
- Mature Skin/Well-Aging
And other market movers such as celebrity brands, TikTok, clinical ingredients, and fragrance are forecasted to remain popular. There are many opportunities to monitor trends and respond with accelerated product development cycles. For example, Natural Plant Products offers trend-focused guide formulations developed by our lab, complete with trend mapping and marketing points. We also monitor and report on personal care and beauty trends, highlighting what’s new on our website and on social media.
While the future is uncertain, strong brands have weathered economic storms before by staying true to their mission and values, openly communicating with their customers, working with trusted suppliers, and continuing to monitor trends.