The beauty industry has been on a tear for years. There are some submarkets that are exceptions, like the mass beauty markets, but overall the business of beauty continues to defy gravity. Even multibrand stores, which in other consumer sectors have a questionable future, are performing. Stefano Curti, global president of Markwins Beauty Brands, pointed out to me that half the growth in beauty is online. But that implies that half the growth is in stores. It’s hard to find another market segment where that’s true.
There are three unique circumstances that continue to prop up the beauty industry:
- Consumers, mostly women, are on a journey of exploration. They are enjoying new products and finding new brands. This is part of a larger generational shift of younger consumers rejecting the large brands their parents preferred and seeking out locally-made, artisanal, natural products in all consumer categories. The need to be Instagrammable at all times also helps.
- Young, independent brands (great examples are listed below) are supporting a surge in creativity. It seems like every day there is a new brand with a new idea about how to become or remain beautiful. Entrepreneurship is boiling over in the beauty industry. These young brands are supported by the physical retail beauty channel.
- Acquisitions by the major beauty companies of ever-smaller companies at very high values are drawing in more founders and driving more creativity every day. The acquisitions are taking place because the big beauty brands are threatened by the young, independent brands that consumers want now.
This set of circumstances, or something close to it, has happened before in other consumer sectors. It never goes on forever. It’s been running for a long time in the beauty industry and while it is certain to end at some point, there’s no telling what will make the bottom fall out or when that will happen.