CEW State of the Beauty Industry Report

After a turbulent year in the beauty industry, CEW gathered to access the damages and gains.

At the organization’s annual State of the Beauty Industry Report, presentations from Sparks & Honey, Mintel, Google, Spate, NielsenIQ and The NPD Group both recapped the disruptions in 2020 and outlined the sticky consumer behaviors the industry can expect.

Following opening remarks from CEW chairwoman Jill Scalamandre, Sparks & Honey, which distills cultural trends across mediums into data, first noted the shifting definition of wellness in the midst of the pandemic. “COVID-19 grounded wellness back in physical and mental health,” said Courtney Emery, director of cultural strategy of Sparks & Honey.

The migration to digital has started getting new consumers interested in beauty, too, Emery said. “It lowered the barrier for male consumers to enter the beauty market, especially those who would’ve found a retailer intimidating,” she said, adding that throughout the year, social commerce stole the spotlight.

According to the presentation by Mintel, despite unprecedented growth in the channel, e-commerce is far from perfect.

“E-commerce does have some pain points — transparent supply chain, making that apparent for the consumer,” said Sarah Jindal, associate director of beauty and personal care at Mintel. “[Fast] delivery is another really important area to pay attention to because we’re used to instant gratification,” she added.

Gaining traction with consumers is also key, especially by shifting to local commerce with both large and small retail partners. “We’re still seeing a strong push to a local economy, and brands can do a great job of supporting those local businesses. Collaborating with them is critical,” she said.

Google and Spate each spoke to the brands gaining the most traction via search. Clinical brands, such as the TikTok-popular brands such as CeraVe and Paula’s Choice, came out on top. “With the top volume brands, it’s clinical brands like CeraVe, The Ordinary, Paula’s Choice and Cetaphil,” said Yarden Horwitz, cofounder of Spate. “The brands ranked by highest growth are seeing really strong traction despite smaller volume, like the Inkey List and Naturium,” she continued.

In adjacent categories like makeup, searches around lash care and extensions increased, despite the sales headwinds.

In some countries, however, makeup actually prompted growth. Argentina saw beauty take on double-digit growth, according to Larissa Jensen, vice president of beauty at The NPD Group.

In the U.S., where overall beauty was down 19 percent in 2020, the story was more dismal. In North America, it still was the second-best performer behind Canada. “The coronavirus took away five years of dollar growth, bringing us back to 2015-level spend,” Jensen said of beauty overall.

As direct retail goes, those that predominantly cater to makeup took the greatest hits. Brands selling through Instagram, which make up a portion of direct retail brands tracked by The NPD Group, saw the steepest losses, Jensen said.

In spite of that, a few brands had strong years in sales. Estée Lauder’s reformulation of Advanced Night Repair was the top prestige skin care launch of the year in the U.S., Canada, Mexico and Peru. Olaplex topped the hair care brands list for the year, and the Too Faced Born This Way The Natural Nudes Eye Shadow Palette was the top makeup launch, garnering more than $7 million in sales.

For consumers still buying beauty, data from NielsenIQ showed an explosion in click-and-collect usage. Retailers such as Target, Walmart, Ulta and Nordstrom were among those specifically called out by Tara James Taylor, senior vice president of beauty and personal care at NielsenIQ.

Taylor mentioned that premium men’s brands, vegan certified, organic and cruelty-free brands also had a strong year, especially with paraben-free products making up the majority of the market offerings at 52 percent.

For more from WWD.com, see:

Curve Trade Show and The NPD Group Present Excellence Awards

Nielsen: E-commerce Is Reversing Slowdown in Mass Beauty and Personal Care

NPD Q3 Numbers Show Signs of U.S. Prestige Beauty Recovery

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