The Skin-Care Industry Is Thriving — but How Long Can This Boom Last?
Experts weigh in on the sustainability of the category's undeniably rapid growth.
To say that skin care came in hot would be quite the understatement.
According to the NPD Group's total measured market report for the 12-month period that ended last October, sellers of prestige treatment products are running 16 percent ahead in the U.S., compared with an 8 percent increase from the year prior. Culturally, the impact is almost harder to ignore than the sales numbers. Suddenly, five consecutive sheet-mask selfies on your Instagram feed are the norm; you've found a way to justify a $305 bottle of botanical serum; your mom is calling to ask if CBD-infused moisturizer will get her high. Skin care is everywhere.
But just how sustainable is this remarkable growth? According to some experts, the category won't be slowing down any time soon — as long as brands remain committed to evolution, both in terms of their product and their marketing.
"The skin-care market is becoming increasingly fragmented and crowded," says Larissa Jensen, beauty industry analyst at the NPD Group. "In the prestige channel, skin-care brands outside of the top 20 now own the largest share of market sales. On average, the last two years have seen over 100 new brands debuting in department and specialty stores," she adds, noting that those smaller brands entering the market tend to focus on one singular beauty category, and in skin care, continue to steal share from larger legacy brands that have their hands in multiple product categories. "Newer brands will continue to make waves in skin care as long as the consumer is ready to try new things — a sentiment that has increased in recent years — and is finding an emotional connection through social media."
The proof of concept for that emotional connection can be found in the success of some of today's most rapidly growing skin-care brands like Glossier, Drunk Elephant and Glow Recipe. These companies have each sought to position themselves less as brands that want to sell you stuff, and more like in-the-know friends that genuinely want to help you find the best products to address your skin concerns. Pushing their efforts over the finish line? An army of loyal consumers armed and ready to share thorough, trusted reviews on each and every product.
"Ninety-three percent of consumers are actually reading reviews before making a purchase, and we find that is especially true in skin-care," says Elizabeth Scherle, the president and co-founder of Influenster, a product discovery and review platform for consumers with more than 5 million active members. In the last year, the site has added more than 126,000 new skin-care product pages. "[Consumers] really want to know that people like them have used the product and that it worked for them. I think people are looking to experts, yes. And they are looking to the brands, but I think more importantly, they're looking to other people."
Beyond the pretty packaging and Instagrammable application (see: glitter masks), brands will find themselves having to stand up more and more against consumers who know what they're talking about, and have no problem sharing their opinions.
"There is a powerful community of 'skintelligent' consumers who are not only skin-care savvy and highly informed about products and ingredients, but are shaping the market," says Theresa Yee, Senior Beauty Editor of trend forecasting company WGSN. "This new generation of powerful 'skinfluencers' know what they want and need from their skincare products — they are super inquisitive and will investigate, research and educate themselves on the ingredients before they make a purchasing decision and also share their knowledge on their social channels.
The rise of a more knowledgeable consumer is starting to impact the industry as a whole. "There is a wealth of skin-care products and new launches happening all the time; however, the interest in the market isn't slowing down. But with more access to information online and websites that debunk ingredients, the consumer has higher expectations and demands products that perform and give results."
As consumers are becoming increasingly focused on a skin-first approach to beauty, results-driven skin care will only become more critical, experts speculate. "Today we're seeing the Net-a-Porter customer take a step back in the makeup [category] and become more interested in skin care," says Newby Hands, Global Beauty Director of Net-a-Porter. "They are looking for a much lighter, simpler look and are using less makeup. Today's customer is more concerned with their skin's health and longevity." That fact speaks to a larger industry trend where the skin-care category's growth is now outpacing that of makeup. According to the aforementioned report by the NPD Group that clocked skin-care's year-over-year growth at 16 percent, makeup, by comparison, had only grown by 3 percent.
For the luxury e-commerce site, skin care stands as the best-selling category within its beauty department, having grown more than 40 percent in the last year. "We see skin care continuing to grow dramatically as the demand is still extremely high. Net-a-Porter customers are looking for the latest products with the best results; as such, we'll keep providing new products that suit their needs with innovative and unique qualities in comparison to others."
Prioritizing product innovation — along with transparency, education and community building with consumers — will become increasingly important to all of the brands vying for shelf space, both online and in brick-and-mortar outposts.
"Our skin is a true reflection of our overall health," shares Dr. Rocio Rivera, Vice President and Head of Scientific Communications for L'Oréal Paris. "More than ever, people are researching the ingredients they put into and onto their bodies. For example, we saw that 'vitamin C' and 'hyaluronic acid' were — and continue to be — two of the most-searched anti-aging skin-care terms." Dr. Rivera and the team at L'Oréal Paris subsequently took those insights and catered to the demand, launching its Derm Intensives 10% Vitamin C Serum and Hyaluronic Acid Serum, the latter of which currently has more than 900 reviews on Influenster, scoring a 4.5 out of five-star rating.
"This means that consumers are looking to understand and utilize these ingredients in their daily routines," she explains. "They are hungry for education, information and safe formulas, but also looking for brands they can trust."
So, will the skin-care bubble burst anytime soon? Most experts would answer that question with a resounding: "No, not even close." But all brands — legacy, indie and the ever-increasing expanse of those that fall somewhere in-between — have a lengthy list of priorities that consumers are making clear need to be met in order for them to be kept top of mind. The blueprint is here.
"Consumers are craving newness, but their mindset and attitude to purchasing a new product is shifting from just buying a beauty product because it is Insta-friendly to focusing on proven results and product efficacy," says Yee. "Brands that are transparent, authentic and honest will continue to rise through the waves."
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