The past few years have seen much of the beauty industry evolve right in front of us, with the rising importance of social media not only influencing the industry, but now firmly in the driver’s seat. With a 2022 that saw many companies sold at lower-than-expected valuations and only few hit makers, here are the trends that we predict will dominate in 2023.
The deceleration of celebrity/influencer-fronted beauty brands. If there is anything 2022 taught us, it’s that the platform celebrities/influencers have rarely translates into sales when they create a beauty line. While we should see fewer Brad Pitt and Vanessa Hudgens type beauty lines popping up, we do believe celebrities and influencers will still be involved, but perhaps in a different way - such as investing in brands like Augustinus Bader, which already counts quite a few celebrities among their backers.
The rise of “Intelligent Influencers” — generation IG and TikTok has built the careers of many influencers. However, with influencers being a dime a dozen these days, and sales not quite validating their influence, we predict 2023 will be about elevating the influencers with legitimacy in the industry. This year, TikTok derms like Shereene Idriss should see a massive boost. Those on the borderline include Hyram (whose skincare brand has exited Sephora), and other “expert” influencers whose credibility don’t stand up to as much scrutiny.
Continued shrink of indie beauty. At the tail end of 2022, many indie beauty brands shuttered, including Lilah B., Biophile, and La Bella Figura. We think many more will continue to shutter as the industry contracts. Though many cite economic woes as the reason, we also believe this is partially a market-correction of the fact that there were low barriers to entry for the better part of the past decade for emerging beauty brands, and being able to easily capture an audience, to the relative efficiency of targeted ad spends, which have all gone away. There’s a lot of redundancy in the market, and we believe more brands will be squeezed out this year.
In-person retail will grow, at the cost of eCommerce. A reversal of the past few pandemic-dominated years, we believe the growth of eCommerce has already halted and will in fact reverse as underperformance and layoffs at Shopify and PayPal have indicated. Consequently, retailers have already reported higher in-store foot traffic. Coupled with a general trend away from digital influencers, we predict retail spaces will increase in significance as discovery touch points for beauty products.
Traditional Beauty Press will give way to digital marketing. The beauty press space has been a mess, as beauty editors were pretty much forced to become SEO experts to scrap together TikTok generated trend pieces. The editors/PR who have been unable to make the shift have instead become “brand consultants,” while publications themselves have all zeroed in on getting affiliate conversions and ad spend as their primary objective. What this means for the industry is that more than ever, brands will need to work at creating a moment (a viral hit on social) to get themselves out there, or just shell out for ad space.
Ingestibles get another look. The first wave of ingestibles basically said “we’re here, and now we’re making skincare!” But investors and buyers are all really taking a closer look at the ingestibles space to see if anything meaningful has evolved. The interest is back, but the expectations are not well defined yet. It’s ripe for the taking.
Disclaimer: Analysis, by nature, may be speculative, and should not be taken as fact. Views and opinion expressed are just that, and should not be taken as endorsements, nor advice (financial or otherwise).
Disclosures: Newsletter may use affiliate links. Underneath It All is run by Garçon’s Media, which is not a shareholder of any beauty company, nor vice versa.