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27 October 2020 | GSAM Connect

Love and Beauty – Part 1

Representing more than 2.4bn people, there is no generation that has led to as much focus and specialized research as the millennials. For this generation, instant access and transparency are expectations, not luxuries. They move seamlessly across platforms – from smartphone to laptop to tablet, connected every waking minute of every day. In this two-part series, we look at how companies grapple with disruptions across all industries from housing to groceries, and napkins to motorcycles, understanding the role that millennials play in forcing innovation.
 

The Eyes Have It

As with so many industries during lockdown, beauty brands have been forced to adapt to a world where most of our time is spent at home, spaces in which glamour is not entirely forgotten but certainly is less relevant than before. Even though the economic magnitude of the COVID-19 pandemic may have varied impacts on beauty brands and retailers, there is little debate when it comes to the long-term attractiveness of the global beauty industry.

One example of a product that has been able to weather every disruption over the last few decades has been lipstick, selling consistently through recessions and even being deemed a necessity by the US government during World War II. While the world may have forsaken the lipstick in this new mask-clad reality, the eyes, however, have taken on a whole new meaning. Amazon sales for eye make-up grew by 204% YOY in the three-month period ending June 28th, as consumers started looking for newer ways to express their creativity and individuality.

 

Global beauty industry retail sales ($bn)

Source: Euromonitor

A Digital Makeover

The beauty industry is undergoing a digital transformation as social media and e-commerce have revolutionized the way brands can connect with their customers. In a world of influencers, online reviews and beauty tutorials, brands have realized that providing best-in-class digital experiences has become crucial in holding on to the attention span of the millennial and Gen Z populations. While consumers have shown a preference for the brick and mortar experience when it comes to buying beauty, the importance of a strong digital presence can by no means be discounted when catering to the younger generations that spend an average of four hours every day on their smartphones – a habit that has only increased during the pandemic.

Beauty and tech are becoming increasingly intertwined giving birth to a whole new world of “skin-tech”. The world’s largest beauty brands and retailers are all embracing the latest emerging technologies, from artificial intelligence (AI) to augmented reality (AR), to give customers a more personalized, tailor-made approach to beauty. The beauty industry is going beyond just digital, to actually become “smart”. Brands are no longer just providing standalone apps; they are building connected beauty systems to personalize skin treatments, treat individual skin disorders and the impacts of hormonal imbalances on the skin.

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