When COVID-19 came around, the pandemic hit a lot of industries hard. For the beauty industry, the fact that many people were not going out meant that they didn’t need to look their best as often. So, beauty & personal care was no longer as prevalent or necessary.
As we come out of the pandemic and people start getting back to normal, we’re seeing some exciting beauty category trends. Let’s look at how the industry is adapting in a post-COVID world.
The data cited within this article is from the Indie Beauty Brands Report by NielsenIQ
Beauty industry profile in a pandemic
Normally, the beauty industry is pretty recession-proof, growing at a rate of about four percent annually. However, in 2020, the industry actually declined by eight percent, illustrating the power of social interaction as the primary driver of growth.
During the pandemic, skincare products took up the largest market share with 44 percent, followed by haircare at 22 percent. Makeup was third at 16 percent. As people focused more on self-care, makeup and fragrance took a dip, while skincare and haircare increased.
When looking at the industry as a whole, we’ve broken it into six unique categories: conglomerates, beauty groups, niche, private label, micro, and indie. Let’s look at two of these segments to understand how they operate.
Think of big brands like Dove or Neutrogena – these companies have a broad reach and a massive market share. Overall, conglomerates hold 38.6 of the market, and the companies often absorb micro-brands to expand their product lines. So even though conglomerates own six percent of the total beauty brands, they make up almost 40 percent of the sales.
Rather than producing their own products, beauty groups license items from other brands to ensure domination. This category includes big players like Maybelline and Cover Girl, and beauty groups also aggressively target indie and micro-brands to reach new customers. This segment accounts for 28.8 percent of sales.
You can see how well the other segments perform in our report by downloading it here.
Now that the pandemic has shifted everyone’s beauty priorities, we’re seeing some fascinating results from the different segments. We also wanted to look at the difference between red Republican states (which lifted COVID restrictions early) and blue Democratic states (which lifted them later).
One noticeable shift is that blue states are buying far more indie brands than red states. This data suggests that blue state residents are early adopters, which is partly why indie brands account for two percent of sales with only 0.6 percent of brands.
Overall, however, red states recovered faster while blue states were slower to get back to normal.
Indie brand velocity winners
Beauty consumers are becoming more eclectic in their tastes, which has led to a meteoric rise in indie brands, particularly during the pandemic. Some of these companies have surged during lockdowns and quarantines, giving them more sway in an industry with lots of intense competition.
In this chart, you can see the biggest winners of the past year, with brands like Urban Skin Rx taking big pieces of the indie brand pie. These success stories are worth paying attention to as smaller companies increase their distribution to reach more customers.
2021 Emerging beauty trends
Overall, we’ve noticed five distinct beauty category trends emerging in 2021 as the world returns to normal. Two of these trends are: holistic and innovative. We get into further detail for all of these trends in the report, but let’s take a closer look at these two now.
Self-care rituals are becoming much more popular as people are focusing on taking better care of themselves. So, beauty products that offer rejuvenation and replenishment are seeing a boost. Brands should pay attention to this trend and focus on the relationship between products and stress relief.
As salons and hairstylists closed during the pandemic, many customers had to figure out DIY workarounds. Overall, this category saw a 16-percent rise during the pandemic. Companies that make it easier for consumers to develop more complex beauty routines at home will see a boost.
The beauty industry is highly adaptive and can withstand a lot more than a pandemic. Byzzer uses 20+ years of research experience in this sector, combined with NielsenIQ data, to deliver a comprehensive and informative report. You can download the full report here to see how the industry is poised to move forward.