The beauty market industry is highly competitive. Well-established brands like L’Oreal and Estée Lauder have huge market shares, while new brands like Fenty and numerous indie brands are slowly grabbing more interest in the industry. It can be tough for a new beauty brand to grab attention in a noisy industry like this.
That is where tailored marketing strategies come in. A solid marketing strategy can be the difference between success and failure in such a highly competitive industry like the beauty market industry.
Keep reading to learn more about the competition within the beauty industry and the techniques you can use to get your brand in front of the right people to see success.
The Beauty Market Industry Landscape
The size of the global beauty market has been steadily increasing for decades and is expected to continue to garner more profits in the coming years.
Global beauty and personal care sales are expected to reach $625.70 billion in 2023. From 2023 to 2030, the beauty market is projected to develop at a compound annual growth rate of 4.2%. The widespread increase in the use of skincare and personal care products along with the rise in the aging population worldwide is one of the major reasons driving the increase in market share.
Online sales of beauty products are also starting to rise consistently. By 2023, it is anticipated that 17.7% of the total revenue in the beauty market industry will come from e-commerce.
The beauty and personal care market includes all consumer items for cosmetics and body care and can be segmented into the following categories:
- Cosmetics
- Skincare items
- Colognes
- Deodorants
- Shaving supplies
- Hair care items
One emerging niche that is taking hold globally is the demand for organic cosmetics. This trend is predicted to create a large potential for the industry in the near future. Growing awareness of organic cosmetics and their positive skin-benefitting effects by beauty consumers is the reason people are choosing them over chemical-based products, driving future market development.
The biggest market for cosmetics and personal hygiene products is North Asia. North Asia, specifically China, has accounted for over one-third of the market. North America follows with about 26% of the market, and Europe sits at 22%.
In 2022, the skincare market garnered a bigger market share, increasing to over 38% of the total market share. While the skincare industry does have the dominance of big businesses (think Estée Lauder with $7.4 billion in sales annually), niche products are finding a ready market.
Revenue growth in the hair care industry is also anticipated, with a notable compound annual growth rate of 3.9% from 2023 to 2030.
Competition in the Beauty Market Industry
The global conglomerates that control most of the beauty market include Estée Lauder Companies, Inc., L’Oréal, Unilever, and Procter & Gamble. These three beauty brands accounted for an astounding 81.7% of the beauty market industry’s global sales.
Several other notable entities in the worldwide cosmetics industry include:
- Coty Inc.
- Revlon, Inc.
- Avon Products Inc.
- Unilever PLC
- Shiseido Company, Limited
- Godrej
- Beiersdorf AG
- Henkel AG & Co. KGaA
- Kao Corp.
- Hoyu Co., Ltd.
Fenty and Glossier are two recent examples of significant new market participants capitalizing on emerging trends like diversity and organic ingredients. These major corporations are significantly altering the competitive environment and pressuring all businesses, large and small, to remain abreast of market developments to satisfy consumer demand.
The beauty market industry always evolves due to shifting consumer preferences and manufacturers’ willingness to adjust. Beauty brands frequently introduce new tactics into the market to obtain a competitive advantage.
The growth rate of beauty advertising is around 2.2% a year. Television continues to be the most popular medium for advertising, but digital advertising is gaining ground. Major brands are concentrating on expanding their expenditure on social media ads to raise more brand awareness of their cosmetics in the market.
According to a Google survey, women between 18 and 54 most frequently accessed beauty videos on YouTube. Every year, the number of people watching “makeup transformation” videos more than doubles. Videos that highlight environmentally friendly and sustainable items are popular in terms of uploads and views.
Innovative Approaches By New Beauty Industry Entrants to Capture Market Attention
While the tried and true marketing methods are always a good foundation, with so much competition, beauty companies looking to enter the market must get creative with their marketing techniques to gain market share.
Beauty Influencers
Influencers, ranging in size from micro to big-name players, are quite influential in the beauty market. Because they are more accessible to consumers than other companies, a positive review can have a huge impact, which is why newer companies tend to enlist their services.
Direct to Consumer Brands
The advent of direct-to-consumer (D2C) brands is one of the major innovations in the cosmetics sector. These companies provide beauty subscriptions that allow regular people to get high-end skincare and makeup products straight out of labs at steep savings.
Augmented and Virtual Reality
Several well-known cosmetic businesses are using augmented reality technology to show customers what cosmetics look like before they buy them. Well-known companies experimenting with various technologies include Maybelline, Makeup Revolution, Gucci, Rihanna’s Fenty Beauty, Glossier, and NYX.
Customer Loyalty and Brand Advocacy in the Beauty Market Industry
Customer advocacy aims to convert happy consumers into brand advocates who will actively spread the word about a beauty company to others. These brand ambassadors are consumers so pleased with a specific beauty and cosmetic product that they make a special effort to recommend them to their friends, relatives, and coworkers.
Why is consumer advocacy so crucial to growth marketing in the beauty industry? To begin with, it’s a potent method of establishing credibility and trust with prospective consumers. People are more inclined to believe in a brand and try a product when they hear good testimonials from customers who have tried and appreciated it.
Customer advocacy can also distinguish a brand from other beauty businesses. Having a devoted following that will promote a beauty brand can offer a big advantage in a congested market.
Beauty companies can use the influence of their current clientele to promote themselves through brand advocacy instead of devoting all of their resources to advertising and other forms of marketing.
The Power of Marketing in the Beauty Sector
The beauty market industry has a variety of already established marketing techniques it has used for decades that have seen results. These include television ads, billboards in places like NY Times Square, and product placements at large events like fashion shows. But recently, with digital marketing becoming more mainstream and necessary for brands’ success, they have begun adopting a more digital approach.
Beauty brands have begun using digital mediums such as video advertising and social media platforms as larger parts of their marketing strategies. Some of the most notable unique marketing strategies beauty brands are trying include the following:
- Glossier highlights their own customers’ content around their brand on their social media sites, turning all their customers into beauty influencers.
- L’Oreal uses augmented reality to offer try-on mirrors so customers can try products before purchasing them.
- Fenty Beauty was the first brand to bring inclusivity to the forefront of its marketing strategy, ensuring everyone has a product for their skin type, and it saw them immense success.
- Birchbox used content creation not for promotion but for education. Their rich library of written beauty content engages their target audience.
Performance Video Ads: Their Impact and Effectiveness in the Beauty Market Industry
According to Instagram, it was expected that 75% of the info we consume this year would be visual. Beauty firms must include video content in their marketing strategies to remain competitive.
Beauty businesses can employ a variety of performance video ad formats in their marketing campaigns, including:
- Product Reviews: When purchasing beauty goods online, almost all active buyers in the beauty market industry check ratings and reviews. Product reviews are crucial for beauty brands since many customers in the sector create videos about their purchases and post them on social media.
- Product Spotlight: To raise awareness, beauty brands can use product spotlight videos to highlight certain product features and advantages in depth. This can be used to bring a spotlight on well-known items or to promote lesser-known ones.
- Tutorial/How-To: Tutorials can draw attention to a product’s distinctive qualities that make it stand out from the competitors. These videos are an excellent way for brands to instruct viewers on the usage of their products and advise customers on how to get the most out of them.
Advertising relevant to the videos viewers watch is preferred by over half (56%) of US consumers over advertising related to their surfing habits or mental states. Consumers want to see products and ads related to their interests, which is an area beauty brands can take advantage of.
Brand Strategies are a Cornerstone For Success in the Beauty Market Industry
The necessity of a solid brand strategy is obvious in a market full of competitors: stand out or get lost. Effective differentiation is essential to separate a beauty brand from its industry competitors and create a unique value proposition in the eyes of consumers.
In a highly competitive industry, a beauty brand can establish enduring connections and prosper by clearly defining its goal, comprehending its target audience, setting itself apart, upholding a consistent brand identity, and placing a premium on the customer experience. Understanding and implementing these pillars is essential to a brand’s long-term significance and effect.
Leveraging Branded Video Production for Storytelling and Engagement
Beauty brands can separate themselves from their competition and get recognition in the beauty market industry by using storytelling videos. These videos will help build an emotional bond between consumers and beauty brands and also help showcase the essence of a beauty brand aside from its products.
For example, many beauty businesses advocate for more moral beauty procedures to attract more clients. Many brands employ narrative films to discuss their cruelty-free or vegan goods or other ethical beauty practices.
Beauty Brands Can Take Advantage of AI Photos for A/B Testing in Digital Advertising
Ad campaign optimization requires A/B testing, which can be resource-intensive. Generative AI can make A/B testing easier for beauty marketers by producing several ad versions for testing. Because the process is streamlined with AI, marketers are better equipped to determine which components are most successful in achieving their goals rapidly.
Beauty brands’ creative teams can extend their campaigns and operations dramatically by spending less time producing ad variations when they can automate with AI tools.
How Dillie’s Services Elevate Beauty Brands
If you are a beauty brand that wants to launch a new product or learn how AI can play a role in your beauty business, then Dillie is the company you have been looking for.
Dillie has worked with all types of beauty companies, from small indie brands to large companies like Revlon. We are a full-service creative production company that understands what is needed to turn a $1 million beauty brand into a $100 million powerhouse.
We don’t use cookie-cutter templates for your content. We want your brand to stand out among the other beauty brands out there, so we work with you to create innovative, custom visual assets that show the world why they should pick your brand!
Our in-house team means we can dedicate all our efforts to ensuring the content we produce for your beauty brand meets your standards. And because we have a team always available, you have access to communicate your ideas and needs to experts who intimately understand the beauty market industry.
If you have ever wondered how big brands can meet the endless demand for content from their consumers, we have the answer for you. They delegate without losing their creative control, which is exactly what Dillie can do for your beauty brand. Using a specialized agency in the beauty industry like Dillie means you get access to a whole team of production experts while retaining the creative control to ensure your brand is portrayed the way you want.
Simplifying Marketing Challenges for Beauty Brands
Marketing teams within the beauty market industry have many tasks they must be experts at to remain competitive against rival brands. Brand strategies, video advertising, social media strategies, customer engagement, and much more all fall on these teams to not only handle but be extremely successful at. There is little room for error in marketing campaigns in the beauty industry, and the wrong color or font choice can be the difference in millions for a beauty campaign.
Marketing teams for beauty companies can simplify their marketing workload by outsourcing certain tasks to agencies like Dillie, which can help alleviate their workload. By having companies like Dillie handle all the fine details of creating AI-generated campaigns, beauty marketing teams won’t have to spend time learning new software and can instead focus on other marketing tasks.
Quality is something that beauty consumers have an eye for, and this goes for all aspects of a beauty brand, not just the products. Quality advertising helps beauty brands stand out from their competitors and show their consumers they listen to what they want and understand who they are. Dillie has worked with brands ranging in size, types of products, and types of customers. From UGC videos to Instagram Ads, we have the expertise to take your beauty brand to the next level.
Beauty Brands Need Innovative Marketing Strategies For Success
It is no secret that the beauty market industry is highly competitive, with many long-established brands and up-and-coming beauty companies shaking up the industry. The best way to get ahead of all the noise is to build a solid marketing strategy for your beauty brand’s success. Innovative marketing solutions, like AI-generated marketing campaigns, are the way forward for beauty brands looking to get ahead in an already saturated market.
Explore Dillie’s tailored marketing strategy offerings, or contact us today to discuss what you need to get your beauty brand in front of more people who will love your products!