I was recently turned on to Calm, a top-rated app for mindfulness and relaxation that many of my friends recommended. Given that it has been downloaded over six million times, my friends and I are not alone.
Social media pressures, political divides, and the alleged impending recession are just a few of the stress-inducing factors out there causing anxiety levels to rise. It’s no wonder that gravity blankets, furry bags, comfy shoes, and crystal infused water bottles are flying off the shelves. We need to collectively relax, decompress, and expel all that negative energy. In beauty, we have seen stress-reducing ingredients like adaptogens, healing crystals, and CBD emerge as some of the breakout stars of 2018.
The coming year will see areas of growth within each U.S. prestige beauty category, but recession fears may slow the performance of the total market as consumers make the move to more careful consumption. Looking more broadly, we anticipate the coming year will show an amplification of what we’ve observed to date, and the grand entrance of a not-so-new consumer.
With the rise of social sites exposing the ugly underbelly of beauty, and the Deciem drama that unfolded before our very eyes, extreme transparency will continue to push the boundaries of truth and “TMI.” Partisan branding emerged as a hot-button topic as retailers and brands across different industries took risky, controversial stances. Given all this intensity, it makes sense that naturals are now moving beyond formulas that are good for your skin to those that are good for your soul, touting the benefits of spiritual and medicinal ingredients. With natural skincare brands growing at twice the rate of total skincare, we expect this growth to continue.
We are moving beyond experiential retail into the realm of inspirational retail. Retail environments are moving beyond ‘Instagrammable’ moments to community spaces with coffee shops, lounges, and even mini movie theatres incorporated into the selling space. While some stores are permanent, many are pop-ups, which have grown exponentially in number based on our observations in the New York market alone. The largest DMA in beauty, New York brings in 10 percent of total industry volume in the country. Creating these experiences in the most profitable locations is vital to success.
Gen Z Arrives
Millennials need to make room for the new kid in town. Gen Z accounts for over $44 billion in annual spending and is poised to become the largest generation of consumers as soon as next year! Wellness and social responsibility are important to them. This generation will drive continued change across major industry platforms like gender neutrality, inclusivity, diversity, sustainability, and transparency, and that change will be fueled by technology. Reaching this consumer requires aligning authentically to their values.
We expect overall growth in the coming year, but with so much uncertainty and consumer anxiety, pockets of beauty will likely stumble in the year ahead. But we are a strong and resilient industry with definitive staying power. In this environment it has become increasingly important for brands to be thoughtful, authentic, and purposeful. So stay “Calm” and connected with your consumer as we believe growth will come from products, brands, and retailers that provide an escape from their everyday stressors.