Jun 30, 2021 11:18:02 AM | 14 Min Read

2021 Trends in the Beauty Industry Every CPG Brand Needs to Know

Posted By Snipp
Share
2021 Trends in the Beauty Industry Every CPG Brand Needs to Know

With shopping habits and preferences changing—during and post-pandemic—consumer expectations for beauty brands are also changing. Digital try-on experiences and brand accountability are a must for brands looking for their products to become their customers’ new Holy Grail.

The U.S. cosmetics industry was valued at USD$93 billion in 2020, and while the industry took a hit during the pandemic, vaccine distribution and loosening mask restrictions will likely re-spark interest in makeup and skincare products. Here are some beauty trends you need to know to win over your consumers in 2021:

Trend 1: Innovation & Tech Drive Engagement & Spending

A recent study of 2,000 beauty consumers by Nosto found that 44% of consumers surveyed purchased more beauty products online in 2020 than previous years—but the study also found that 56% were more likely to stick with brands and products they’d used before instead of trying something new. Since many beauty products are specific to the hair color or skin tone of the wearer, sticking to what a shopper knows will match when they can’t easily swatch new products seems reasonable.

The beauty industry struggled with eCommerce before the pandemic because shoppers prefer to swatch, test, and compare products in stores with testers. But the pandemic also halted the use of testers in retailers, too, with major chains like Ulta and Sephora pulling tester products as part of their COVID cleanliness measures.

However, new technology is giving beauty consumers enhanced virtual try on features for both online and in-store shoppers. For example, Maybelline uses a virtual try on feature on their website, where visitors can “try on” makeup products via their camera or upload a photo. Removing this barrier for beauty brands online can help drive eCommerce sales.

Additionally, with increased concern for using shared tester products in-store, brands are utilizing augmented reality in the retail space, too. Cosmetics company, Mineral Fusion, implemented virtual try-on for their entire cosmetics line at Whole Foods locations. By scanning a QR code on store displays, shoppers can try on products via AR.

Trend 2: Authenticity is Beautiful

It’s no secret that brands’ commitment to social responsibility and sustainability is of growing importance to consumers, especially among Gen Z. Mintel defines “trust” as the new value of the beauty industry, where consumers are focused on how products are made and what their value and purpose is over brand loyalty. Showing purpose and community as a brand will both create more loyal(ty) customers and drive consumer trust—far beyond the pandemic.

Unilever is taking this message to heart and, in response, developed the Positive Beauty campaign. An estimated one billion people worldwide buy and use products from Unilever’s beauty brands, such as Dove and TRESemmé, and Unilever created their Positive Beauty campaign as a way to blend diversity and sustainability initiatives and take responsibility for the impact their products and marketing have on their customers. One priority of the initiative is to remove the word “normal” from all their marketing, citing how “normal” limits the definition of beauty and can even be discriminatory.

An additional campaign from Dove, launched in Canada, encourages consumers to be conscious of the damaging effects of social media—especially on young people. “Reverse Selfie,” as the film is titled, asks parents to have the “selfie talk” with their kids to start undoing the negative effects social media and image editing have on self-image and self-confidence.

Trend 3: Social Media Influencers Drive Beauty Trends & Sales

While eCommerce has been a barrier for the beauty industry, social media and the subsequent rise of online influencers has opened many doors for brands who leverage them correctly. As previously mentioned, authenticity needs to be a part of any social or influencer campaign in order to gain consumer trust.

Many beauty shoppers like influencers because they do allow shoppers to “experience” the product by seeing it in action and get questions answered in live streams or comment sections. A good influencer gives their honest opinion of the product and describes things users can’t experience through the screen, like texture and scent.

Instagram Remains Beauty Media King

With content ranging from avant garde makeup artists to 10-step skin care routines and even beard-care tips and tricks, one would be hard pressed to find an Instagram feed that doesn’t feature some facet of the beauty industry. In fact, a study from Kolsquare found that 90.4% of beauty content published online in 2020 was posted to Instagram.

Instagram is popular among both beauty influencers and consumers because of the wide variety of options for content (and therefore, interaction), including photo posts, short-form video (Reels), long-form videos (IGTV), story posting, and live video streaming.

In addition to working with influencers on Instagram content, brands can utilize the platform and its advertising and social commerce to connect with consumers. 90% of Instagram users follow at least one brand, and 130 million users click on shopping posts every month to learn more about products.

Rise of TikTok

80% of beauty brands have an influencer marketing strategy, and more and more, beauty brands are turning to social media platform, TikTok for influencers and marketing opportunities. The app, which was previously only a Gen Z favorite, became the most-downloaded app of 2020. While some of TikTok’s popularity is attributed to the pandemic, the bite-sized videos with all sorts of in-app effects has proven to be highly addicting. Research done by Bloomberg found that TikTok users open the app 13 times within 24 hours.

Beyond being super re-watchable, TikTok is the hype master of beauty trends—like #TeamNoSleep and hair plopping, to name a few. Additionally, in an industry where peer recommendations are a huge driver of sales like beauty, TikTok allows brands to connect with consumers authentically through content creators. In fact—52% of TikTok users said they made a purchase based on content they watched on the social platform.

Maybelline utilized TikTok for the launch of a new mascara in March of 2021. 15-second clips of TikTokkers swiping on the mascara and being wowed by the instant fullness and lift to their lashes went viral on the platform—and caused the product to sell out online overnight.

With TikTok launching its own social commerce feature to allow users to purchase products right within the app, social and influencer strategies will become even more important for beauty brands.

Trend 4: Self-Pampering & DIY Beauty Drives Skincare, Body & Hair Care Sales

With many salons and spas shuttered for part of 2020, beauty consumers who have regular appointments for facials, massages, and haircuts were inspired to try beauty and pamper routines at home. A study by Spate found that sales of at-home beauty tools soared during the pandemic, with some of the most popular being skincare fridges (203% annual sales growth from 2019 to 2020), facial steamers (70% annual sales growth from 2019 to 2020), and facial scrapers (33% annual sales growth from 2019 to 2020).

Additionally, body care is rising in popularity, with products like exfoliants, serums, and masks for the body growing in sales. In fact, growth in the skincare segment was attributed largely to sales of these body care products. Even men have become more engaged in their at-home personal care routine; in 2020, searches in the men’s skin care category increased by 34% from the previous year—with moisturizers jumping 324%—and anti-aging category searches increasing by 42%. Overall, the men’s personal care market is expected to reach $27.5 billion in U.S. dollars by 2025.

While shutdowns are likely the source for renewed interest in body care, the NPD group found that body care product sales were on the rise in the first quarter of 2020—before the pandemic took hold across the world.

Creating an at-home spa experience was about more than keeping up personal hygiene routines; the pandemic and subsequent economic crises created a greater need for self-care to help manage mental health. Additionally, with the pandemic taking control of many aspects of our lives, skin and hair care were aspects we could control, inspiring many of the quarantine haircuts and colorful dye jobs that probably graced your social media feed over the last year.

Even as the pandemic subsides, some beauty consumers will hold on to their at-home hair, body, and skincare routines—potentially to save costs, they like the results, or it’s become essential to their self-care practices.

Best Practices for Beauty Brands

Build a Seamless Omnichannel Experience

Beauty and cosmetics has struggled to match their online experiences with in-store opportunities to test out products. Virtual try-on using augmented reality is the first step to giving shoppers the ability to make confident beauty purchases online. Influencer strategies and utilizing TikTok and other social media platforms for user generated content will also be important to developing authenticity online.

Embrace Transparency

Consumers are looking for products that do good and are good for them, so communicating these practices in your brand should be front and center in your promotions. Whether it’s educating consumers about your product’s formulation or using social media to spread body positivity like Dove did in their #NoDigitalDistorition TikTok campaign, there’s plenty of ways beauty brands can be a source of positive change.

Drive Loyalty with Rewards

Since beauty products are often repeated purchases, an effective rewards program can be a driver of brand loyalty. Receipt processing technology not only gives your brand the ability to reward online or in-store purchases and allows your customers to easily gain points toward special promotions or swag but can also trigger granular, 1.1 rewards attribution/differentiation at item line level for greater personalization.

L’Oréal USA utilized the SnippRewards platform to develop a customer loyalty and rewards program, L’Oréal Worth It, that allows them to seamlessly integrate rewards—which included consumer directed charitable giving. Through the program, Snipp handles the procurement and fulfillment of rewards, such as digital gift cards, magazine subscriptions, sweepstakes, and charitable donations. Consumers can easily redeem their L’Oréal Worth It points for Snipp rewards, and L’Oréal can track engagement and sweeps entries utilizing the SnippRewards API.

Don’t Forget Rewards for Luxury Beauty & Fragrance Customers

Customers loyal to luxury brands love getting rewards, and with increased purchases of luxury brands online (instead via their own retail locations), flexible rewards are just as important for high end beauty brands.

With the help of Snipp’s receipt processing platform, Shiseido Canada recently launched a unique digital punch card loyalty program to encourage repeat purchase. Consumers buy qualifying brand products in multiple transactions (1 purchase = 1 punch) from Hudson’s Bay or La Baie retailers and submit an image of a valid receipt. For every five (5) Parfums products purchased (of the same brand), consumers will receive a complimentary, full size Parfums body care product (of that brand) as a reward. Snipp’s receipt processing API is integrated for receipt validation and for daily data reporting for rewards fulfillment and further personalization.

Lancome leveraged the SnippCheck receipt processing engine to reward customers through their Elite Rewards loyalty program. Consumers who purchased Lancome products could easily upload their receipt via text or online where Snipp validates the purchase and customers are awarded points.

Yves Saint Laurent implemented a seamless loyalty experience using Snipp’s receipt processes technology. Customers simply uploaded receipts to the YSL loyalty microsite, and Snipp validated online and retail purchases. The purchase data is sent back to YSL through our API, resulting in a smooth rewards process for YSL and their customers.

Shiseido brands, Salvatore Ferragamo, Narciso Rodriguez, Issey Miyake have leveraged Snipp's receipt processing API to digitize their long standing paper punch card loyalty program for an improved the customer experience and consumer participation along with unprecedented  first-party shopper data to build their CRM and retarget their consumers.

The beauty industry is undergoing some major changes to meet consumers’ expectations. Learn more about trends in the personal care industry at large in our new eBook: 2021 Trends in Personal Care for CPG Brands.

Download Your Complimentary Copy Now

Topics: Receipt Processing, Rewards, CPG

Recent Posts

The Loyalty Of All Things: How The Internet of Things is Impacting Loyalty Programs

About 6.4 billion “things” are currently connected to the internet, and Gartner predicts that this...

Read More

Q&A: Connecting and Building Customer Loyalty with Millennial Moms

This following Q&A between Loyalty360’s Jim Tierney, and Camille Kennedy from Snipp, first appeared...

Read More