In a global beauty industry currently valued at more than $532 billion and expected to surpass $800 billion in just a few years, skin care reigns supreme. The most profitable market segment by far, skin care products include creams, moisturizers, serums, masks, scrubs, and other items formulated to help to keep skin looking nourished and healthy.
Over the last decade, sales of skin care products have been growing steadily, with a period of rapid growth happening in just the last few years that experts say shows no signs of slowing.
According to NPD Group Beauty Industry Analyst Larissa Jensen in a recent Fashionista article, “The skin care market is becoming increasingly fragmented and crowded,” with over 100 new brands debuting in department and specialty stores in the last two years. Smaller, independent skin care brands have also experienced significant growth of late, with the digital age making it easier than ever to launch and grow a startup beauty brand.
Overall, what are the top factors driving growth?
Behind the recent growth spurt occurring within the skin care industry is, of course, the modern beauty buyer. As consumer wants and needs evolve over time, existing brands must rise to the challenge and deliver the products their customers want. Failing to do so leaves an opening not just for their competitors but for new players to enter the market and capture some of the revenue share. Below are three of the top factors driving growth within the skin care segment.
1. Focus on overall wellness and longevity
For many modern consumers, skin care has become part of a larger, more holistic daily ritual of caring for themselves and their bodies. Over the past two years, living under the shadow of a global pandemic has left its mark. People are tired, more stressed out than ever, and ready to get back to some semblance of normalcy. But because of what they endured, they also have a renewed focus on overall wellness and longevity, and skin care has a role to play in their recovery.
Daily health regimens and routines provide structure and stability, something many of us lost during the pandemic. The daily commute to the office, kids’ school schedules, social calendars, all of it went out the window as we struggled to adapt to a “new normal” of trying to juggle everything at home. Skin care is something we can easily control, and setting aside time in the morning and evening for the relaxing ritual of cleansing, moisturizing, and pampering our skin is incredibly valuable to our mental health.
According to a study published in July of 2020, women who applied skin care products regularly throughout a month-long period reported improved feelings of happiness, empowerment, and self-esteem, prompting researchers to conclude that, “A quality and efficacious skin care regimen can have a positive impact on the quality of life of consumers.” In addition, performing acts of self care, such as enjoying an exfoliating face scrub or applying a detoxifying charcoal mask to stressed-out skin, activates the body’s natural “feel-good” chemicals, including dopamine and serotonin.
2. Commitment to sustainability and stewardship
In recent years, U.S. consumers have become increasingly more environmentally conscious, and as a result the demand has risen for more sustainable choices in the products they buy and use every day. Skin care is no exception.
Beauty buyers today understand the importance of choosing cleaner, greener products to help minimize their carbon footprint. Instead of purchasing skin care products made with harmful ingredients that endanger the environment and its inhabitants, or buying from brands that produce a considerable amount of waste in the form of discarded packaging, consumers are looking for skin care manufacturers whose values align with their own in terms of environmental stewardship.
Along those lines, the industry has also seen a rise in multi-use products that provide more than one benefit, for example a lightweight oil cleanser that also works as a makeup remover and a nourishing hair treatment. Not only do these products mean less overall packaging and waste, but they also mean less time in the bathroom and a simpler daily skin care regimen. This trend toward simplifying our daily skin care routine is called skin minimalism, or skinimalism, and experts predict it is likely here to stay.
3. New generation of skin care consumers
Gone are the days of consumers simply taking product manufacturers at their word, and this is especially true in the skin care industry.
According to Theresa Yee, senior beauty editor at WGSN, “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. 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.”
Indeed, social media sites, along with peer review platforms such as Influenster, are driving a new generation of smarter, more discerning shoppers who often look to their peers instead of the product makers for the lowdown on everything from ingredients to efficacy. However, this new generation of consumers also gravitates toward brands that prioritize transparency. Going forward, those companies willing to provide full disclosure, so to speak, about their products, ingredients, and processes will be the ones that find success.
Prime opportunity for small business success
While brands of every size have an opportunity to grow and thrive in the ever-growing skin care market, smaller, independent brands are in a unique position to shine. Consumer connection and relationship building are often top priorities for indie retailers, especially in the beauty and personal care space. Because they spend a considerable amount of time listening to their customers—and prioritizing their wants and needs—we can expect to see even more of these brands sharing the spotlight with larger mainstream brands in the future.
Will Yours Be the Next Breakout Skin Care Brand?