Trends & Insights Shaping the Skincare Industry

Part
01
of three
Part
01

Insights and Trends - Skincare and Anti-Aging: Part One

The global anti-aging cosmetics industry is expected to reach a market size of $17.22 billion by 2023, and several trends are fueling the growth of the industry, including strategic M&As and increased R&D spending for product innovation.

1. Increased spending on R&D Technological Innovation in Products

  • As per the recent reports from Research&Markets and Chief Analyst, the key players in the anti-aging cosmetics space are increasing their R&D spending to master product innovation.
  • Companies like L'Oreal and Estee Lauder have increased their R&D spending over the years. Both of these companies have been recognized as the major players in the anti-aging cosmetics industry. "In 2018, Esteé Lauder spent around $202 million on R&D initiatives, and the R&D spending stood at $179 million and $181 million for the year 2017 and 2018, respectively.
  • Product innovation is a key to survive in the industry, and continued R&D helps with the same. According to a recent press release from Estee Lauder, the research and development segment of the company is focused on finding breakthroughs in the anti-aging space to "push the boundaries of both its understanding of and its ability to improve skincare."
  • This trend was chosen because R&D is an important element of product innovation, and the latter is necessary to survive in the highly dynamic and competitive environment of the industry. The trend is also being incorporated by some of the biggest players in the industry and has also been highlighted in multiple industry reports.

2. Strategic Acquisition is Trending

  • Strategic acquisitions have also been trending in the industry; market giants have been acquiring small but successful anti-aging product manufacturers and tech companies for improving their current product lines. Some of the biggest M&A transactions include the L'Occitane and Elemis acquisition, Estee Lauder and K Beauty & Dr. Jart+ acquisition, P&G, and Snowberry Acquisition, Colgate-Palmolive and Filorga, Unilever and J-beauty brand Tatcha, Shiseido and Drunk Elephant acquisition.
  • One of the major highlights from these acquisition deals is that the brands that have been purchased by these giants are mainly dealing in anti-aging cosmetics space like Elemis, Filorga, Snowberry, K Beauty, and Dr. Jart+.
  • One of the most popular tech-based M&A transactions is L'Oreal's acquisition of Modiface.
  • This has been included as a trend because multiple key players have been following the trend of acquiring mainstream anti-aging brands for improving their current product lines.

Other Trends

  • Anti-aging cosmetic companies are considering online platforms as an effective sales channel. Companies like L'Oreal have been offering specific anti-aging products like REVITALIFT Triple Power Intensive Anti-Aging Day Cream Moisturizer on its website. Other key players that have incorporated the trend include Shiseido, and P&G. According to a report by Technavio, online platforms are trending in the anti-aging industry as multiple companies are trying to facilitate the online availability of anti-aging products directly through their website.
  • According to a recent market report from Chief Analyst, most anti-aging manufacturers are going vegan to meet the current growing demand for vegan beauty products; L'Oreal is one of the most well-known brands in the vegan cosmetics space. Given that the vegan population is on the rise, the trend is expected to fuel the growth of vegan beauty products. Mainstream vegan brands like Plum are also launching anti-aging product lines to attract specific consumer groups.
  • Most anti-aging cosmetic brands are retargeting their focus to the Gen Xers and are improving their current product offerings to help aging concerns of Gen Xers. Brands like L'Oreal Paris, Clarins, Trinny London, Korres, and Boots No7 are introducing more anti-aging products for the Gen X generation.
  • In an attempt to provide solutions to all problems from aging to wrinkles to acne, beauty companies are increasingly focusing on microbiome skincare. Companies like Johnson & Johnson, even have a dedicated microbiome platform.
  • "Features of skin aging, such as wrinkles and dark spot formation, are accelerated in heavily polluted environments, and the number of those suffering from skin conditions, such as acne," is increased; therefore, beauty companies are focusing on providing cosmetics that include the anti-pollution element. "Clé de Peau Beauté will be relaunching its global best-seller — the Correcting Cream Veil –with pollution defense, SPF, and super light reflecting technology."

Research Strategy

In order to list the current trends that are shaping the skincare industry, more specifically anti-aging, we searched through several industry reports, market publications, press releases from some of the most prominent players of the industry. Since the geographic scope of the research was not specified, we have included trends that apply to the global anti-aging cosmetics products industry. Given that the first trend identified in the previous phase of our research is applicable to both the US anti-aging industry and the global industry, we have attempted to include stuff that is globally trending and is also somewhat related to the US industry, too. For instance, selling through online platforms like websites is a global trend, but it also applies to the US.
Part
02
of three
Part
02

Insights and Trends - Skincare and Anti-Aging: Part Two

Two additional trends that are shaping the skin care industry, more specifically anti-aging, include the marketing message shift from "anti-aging" to "glow" and "radiance" and anti-aging hand treatments. Details regarding these trends have been provided below.

Shift from "Anti-aging" to "Glow" and "Radiance"

  • Brands are now changing their marketing vocabulary from "anti-aging" to more positive words, such as "radiance," "glow," and "renewal."
  • Marketing products as "anti-aging" is gradually being deemed unfavorable for consumers. Despite selling the same anti-aging products, brands are changing their messaging to be more appealing.
  • Brands are shifting from conventional, negative marketing concepts as a result of a consumer push towards body positivity.
  • Successful emerging brands such as Herbivore and Saturday Skin whose target markets are younger women who do not find anti-aging language interesting focus on using messaging that is authentic and fresh.
  • Another case in point is Glossier, a company which was founded in 2014. Instead of focusing on aging and wrinkles, Glossier used words such as "even" and "tired" skin tone. As it stands, the company is one of the top beauty brands among millennials.

Anti-aging Hand Treatments

  • Brands are now focusing on anti-aging treatments for the hands as they present a new revenue stream.
  • According to Dr. Zeichner, a dermatologist based in New York City, as people age, the fat on the back of the hands is lost. This results in veins becoming prominent. Today, there are injectable fillers that can plump the hands and make the veins less visible.
  • An example of a company that is focusing on anti-aging hand treatments is Restylane Lyft, which got approved by the FDA. Another example of a product is Supergoop! Forever Young Hand Cream.
  • Other brands focusing on anti-aging hand treatment include Karuna Age-Defying+ Hand Mask, Chantecaille Retinol Hand Cream, and Lavido Nurturing Hand Cream.
Part
03
of three
Part
03

Insights and Trends - Skincare and Anti-Aging: Part Three

Two additional trends that are shaping the skincare industry, more specifically anti-aging, are injectables and preventative anti-aging. Details regarding these trends have been provided below.

Injectables

  • In 2017, there were 15.7 million minimally invasive cosmetic procedures. The two most popular injectables are fillers and Botox. The primary reason why people are turning to injectables is that they provide a cheap way to look younger.
  • There has been a shift in the messaging of minimally invasive injectables such as Botox. Despite the treatment being potentially dangerous, it is now marketed as a beauty product and targeted towards younger customers.
  • The usage of Botox has grown by over 800% since 2002. In addition, minimally invasive treatments such as fillers increased by 2% in 2017.
  • Because of the constant growth in this segment, companies such as Allergant are venturing into this space. The company launched Spotlyte, a brand that focuses on both beauty and medical aesthetics.
  • Similarly, Alchemist 43, focuses on making its clients look younger using injectables.

Preventative Anti-Aging

  • The number of younger consumers in their twenties and thirties who are purchasing preventative anti-aging products is gradually increasing.
  • Approximately one-third of people who are under 35 use "anti-wrinkle" products.
  • Injectables are used to prevent aging. Neuromodulators, such as Dysport, Botox, and Xeomin are examples of popular brands. They prevent wrinkling.


Sources
Sources

From Part 01