NEW YORK, United States — With venture capitalists and private equity partners now debating — in surprising detail — the merits of cult-y creams and hero ingredients, monitoring lip gloss launches, influencer followings and Instagram comments with eagle eyes, one thing is increasingly clear: this is beauty's moment.

The indies, apps and bold new initiatives that are broadening the boundaries of a once fairly predictable trade are what many in the business world are very literally banking on.

And culturally, that’s right-on. Beauty is what we talk about now when we talk about inclusion, diversity and body positivity. Not to mention innovation and entrepreneurship. It’s a global landscape of #SelfCareSundays and #LiveYourLook Thursdays (if you’re a Milk Makeup fan), where the lingua franca is transformation, empowerment, self-expression, experimentation and fun.

In an often cold and isolating digital world, beauty’s shared experience offers connection and community. One YouTuber at a time, it helped birth the influencer landscape. It encapsulates the legacy brand-versus-indie stand-off permeating so many areas of business today. It’s the perfect playground in which to examine the potential (and perhaps the limitations) of transparency, the promise of authenticity and to experiment with modern-day brand building.

It’s an industry, and a universe, that, in its best light, sells confidence and freedom. According to the NPD Group, in 2017, prestige beauty was the second-fastest growing industry in the United States — second only to video games. What an incredible time to be in this business.

Here we examine the beauty revolution.

1. Hyper-Personalisation

As concierge-like services continue to evolve, the emboldened (Insta-happy) new Me Generation continues to swell and brands jockey to give their customers more, the burgeoning trend towards greater customisation has kicked into hyper-drive.

Image: Peter Langer for BoF

Personalisation has always been available — for a price. (The latest status cream, Dr Barbara Sturm’s reparative MC1, blended with patients’ own plasma, runs a cool $1,400 — if you can get an appointment with the jet-setting doctor.)

What’s new in beauty couture is a more democratic, open-to-all approach, with hair care brands like Function of Beauty and Prose and skincare start-ups like Proven Beauty and Geneu, a favourite in Selfridges bespoke beauty section. Eyeko’s Bespoke Mascara invites consumers to select their preferred wand, formula and finish. For between $55 (“Custom”) and $150 (“Bespoke”), shoppers can create their ultimate lipstick at Bite Beauty’s Lip Labs.

“All brands need to consider how to compete in an increasingly personalised world,” says Larissa Jensen, NPD Group’s beauty industry analyst. “Technology has made creating products to consumers’ wishes and wants much easier, and smaller, agile brands are able to accomplish this easily. Larger brands need to react at a faster pace to remain in the consideration set.”

In some cases — Care/Of’s curated daily vitamin packs, for example — customised services remove the guesswork from selecting the right products. In others, like individually blended foundation, brands like Lancôme, BareMinerals and Sephora provide something the consumer may feel she is sorely missing.

Even if it’s just adding a monogram to a lipstick tube, the customer is in charge. So if she wants to be reminded of how uniquely special she is, go ahead and remind her.

2. Radical Transparency

What have we learned about transparency since the internet took over our lives and our livelihoods? It can create dialogue, trust and community.

Share too much — let's call it the recklessly unfiltered route — and a company can (temporarily) go off the rails (see: Canadian beauty company Deciem's recent TMI debacle, and ongoing real-time struggle to handle internal affairs gracefully and finesse their social media presence).

Use it as a means to create a platform (Beautycounter and Goop’s “clean” manifestos), to get in front of the issues (Target’s non-toxic promise), and to show that your company is in touch with societal movements (CVS’s disclosures about digital manipulation in advertising) and the goodwill flows. Transparency, radical or not, can be a tremendous catalyst for positive change.

Being open, rather than elusive, counts for a lot, and a lot is at stake. If you’re not transparent, then by simple definition, you are opaque.

If you're not transparent, then by simple definition, you are opaque.

In today’s socially connected world, the notion of transparency has become a sort of shorthand for the (noble, honest) companies — where the leadership values their customers’ opinions enough to write back, their feedback enough to implement it; where there is a sense of accountability — versus the (detached, less accessible) typically corporate establishment which, by so tightly controlling its messaging from an ivory tower, clearly must have something to hide.

While these characterisations aren’t necessarily fair, they are indicative of the new moment in which beauty (and fashion, and food, and virtually every business) now finds itself: consumers want to be part of the conversation. Enlightened brands will let them in. They don’t just want to poke around and make demands; they want to help you create your best products, and smart companies — like Glossier, Drunk Elephant, and IT Cosmetics — are listening.

With all of the choices out there, how incredible to have a fanbase that invested, that loyal and that cares that much.

3. The Skincare Renaissance

Skin is in. According to NPD Group, skincare is growing more swiftly than cosmetics — 9 percent versus makeup’s 6 percent last year — for the first time in three years. In fact, it was the fastest growing category for all of prestige beauty in the US in 2017, contributing 45 percent of the industry’s total gains.

To what do we owe this renaissance? Buzzy, internet-born brands such as Drunk Elephant certainly help, as has the K-Beauty tidal wave (and the hours of figuring out not only the zillion steps involved, but what exactly you’re using and why), not to mention the “clean” movement’s spotlight on ingredient safety and education. And don’t forget the Instagrammable “skinterntainment” masking brought to previously banal beauty maintenance.

Skincare’s surge is being surfed by the newly minted “skintellectuals”: hyper-educated, skin-obsessed consumers who relish debating this-acid-versus-that-acid, who breeze through the most complicated ingredient lists with the ease of a PhD and to whom NIOD’s Copper Amino Isolate Serum and Superoxide Dismutase Saccharide Mist makes total sense.

They’re self-curating performance-driven, no-nonsense regimens across every price point — cue The Ordinary, Avène, Orveda, Augustinus Bader, Biologique Recherche — where the science (and the results it brings) is what’s sexy. They collect skin creams like lipsticks and view the latest product launch like a must-have handbag.

These engaged enthusiasts want information and innovation, not vague promises, and they’re pushing the best companies to give it to them.

4. Inclusivity: It’s Just the Beginning

The long-overdue push for authentic inclusivity in fashion and beauty has had a breakthrough year, with companies large and small expanding the notion of not only what is aspirational and beautiful (and real), but who they define as their customer.

At this point, brands that are not making genuine strides to be more thoughtful in terms of product mix, advertising imagery and messaging just look out of touch. They’re also limiting their own growth potential.

Where is the next frontier? Take a page out of CoverGirl’s book. The brand, which recently changed its tagline from the girly and light “Easy Breezy Beautiful” to the more politically charged, empowering “I Am What I Make Up,” has adopted a policy of regularly rotating its roster of ambassadors to include as many different people, from as many walks of life, as possible.

Brands that are not making genuine strides to be more thoughtful in terms of product mix and messaging [are] limiting their own growth potential.

In 2016, they added male teenage beauty influencer James Charles and Muslim vlogger Nura Afia to their mix. This year, in addition to ethnic and age diversity, they’re focused on vocational diversity, signing fitness trainer Massy Arias, chef and cookbook author Ayesha Curry, motorcycle road racer Shelina Moreda and silver-haired Maye Musk, the 69-year-old dietician, model and mother of Elon Musk. “We’re always asking ourselves, ‘Who participates in the category but has never been celebrated?’” says Ukonwa Ojo, CoverGirl’s senior vice president.

The brand’s new TruBlend foundation campaign features Amy Deanna, a model with vitiligo. The tagline: “Why try to blend in when you can choose how to stand out?” Isn’t inspiring confidence the real point of beauty, anyway?

 5. The Doctor Is In: Authority Makes a Comeback 

For all of the money doled out to influencers large and small, the people tirelessly wooing (and paying) them sure do have a lot of complaints. “How long will this last” and “when will this go away” are frequent commiserations made by PR and marketing executives, accompanied by long sighs and resigned eye rolls. And though influencers seem to be here to stay, for now (and will stay as long as ROI keeps rolling in), an old-school version of star power is making a comeback.

Image: Peter Langer for BoF

It’s a question of authority. According to NPD Group, US sales for prestige skin care classified as “clinical/cosmeceutical” reached $1.3 billion in 2017 (a 10 percent increase from the previous year), and continue to grow year over year.

While “it-worked-for-me” testimonials or simply “I-think-this-is-cool” endorsements may sometimes be enough coming from a social media star one has come to admire, true professional expertise is demonstrating that it has value — and marketing muscle — too.

Perhaps this is why the re-emergence of results-oriented brands from credible doctors — Augustinus Bader, Loretta Ciraldo’s Dr Loretta, Maryam Zamani’s MZ Skin and Dr Barbara Sturm among them — are currently so compelling. Who is more objectively qualified to talk about skin, and skincare, than an MD who regularly sees patients, conducts laboratory research and participates in clinical trials? Even if they, too, have something to sell, they’re bona fide pros.

Makeup-artist-led brands, which first exploded in the 1990s (as a refreshing alternative to the usual department store fare, even then) — Bobbi Brown, Laura Mercier, Nars, Stila, Vincent Longo, Trish McEvoy — have new firepower, too, with sophisticated colour brands from editorial wizards such as Pat McGrath, Charlotte Tilbury, Gucci Westman and Troy Surratt. Those are legends even the influencers can look up to.

6. A Beauty-Fashion Break-Up

With beauty brands cutting back (if not cutting off) their Fashion Week commitments, and the once steady stream of designer capsule collections turning into more of a trickle, is the beauty-fashion party ending, or just evolving?

It’s a symbiotic relationship that has given both sides a lot over the past 15 years: beauty’s big budgets helped fund many young designers’ dreams — by underwriting show expenses, and testing the lucrative beauty waters with limited editions — while fashion’s energy and inherent glamour gave beauty brands (from the cool to the not-so-cool) new credibility and a ticket to the party (because they paid for the party).

But with tightened budgets and a fatigued audience (it’s always Fashion Week somewhere), not to mention a shift to the influencer (be it model/celebrity/blogger) as chief rainmaker, does beauty need fashion the way it once did? It appears not, when even those with brand identity and authority built around backstage dominance, like M.A.C, are downsizing their fashion partnerships divisions, and others are quietly allowing contracts to run their course.

The special collections — once so novel, now fairly predictable — continue, with M.A.C x Jeremy Scott, Nars x Erdem and Estée Lauder x Victoria Beckham being recent examples of creative collaborations with great synergy. Fans still want something to covet and collect, for which limited-edition drops are tailor-made, but influencer partnerships (as opposed to those with insider fashion brands that few, relatively speaking, have heard of) may attract a broader audience.

Beauty brands will always need newness, excitement and magic moments to liven up the rest of their portfolio and create an ongoing cascade of buzz — the question is, where is that coming from now?

7. The Need for Speed

It’s got to be more than a little frustrating for the old guard to see its lunch eaten — repeatedly — by gritty little start-ups (even the well-funded ones), which offer newness at the speed of Instagram. But if ever-flowing product news and speed-to-market is how a brand keeps its audience’s attention today, beauty’s establishment needs to step on the gas.

The way in which nimble, social-first brands such as Kylie Cosmetics, Pat McGrath Labs and The Ordinary drop new collections seemingly out of the blue has thrown everything askew. Beauty has become fast; the industry incumbents remain slow.

But it’s not necessarily a question of the establishment being behind the times. As Elizabeth Otero, MAC’s senior vice president of global product marketing, explains, smaller brands “have limited SKUs, limited channels, limited geography. It removes the barrier to entry.” Legacy players have complicated supply chain protocols and many more cogs in the wheel.

The Gen-Z customer is loyal to products, not brands. She wants theatre, animation and innovation: new, new, new. Now, now, now.

But that’s their problem, not the consumer’s. And, as Otero points out, the Gen-Z customer is loyal to products, not brands. She wants theatre, animation and innovation: new, new, new. Now, now, now.

So what are the megabrands doing about it? In M.A.C’s case, they’re regularly interspersing limited-edition drops — capsules with Patrick Starrr, Nicopanda and Nicki Minaj, an Aaliyah tribute, the latest Viva Glam with Sia; all still planned well in advance — around big category launches (Retro Matte lipsticks, Next to Nothing foundation), which anchor the permanent collection.

They’re also “pressure-testing the supply chain” with small experiments, like a collection of three lip shades inspired by red-carpet trends, which they turned around in five weeks, between the Golden Globes and Oscars, this past winter. While that achievement might be business as usual for an agile little dynamo like ColourPop, “It’s record-breaking for a brand this size and complex,” says Otero.

8. The Serious Business of Insta-Beauty

Behold Glamglow’s star-speckled #Glittermask Gravitymud — like KiraKira in a jar, only firming — and ask yourself, as you are almost unconsciously reaching for your phone and reflexively tapping on Stories, wasn’t this just made for social? Chances are, actually, it was.

Image: Peter Langer for BoF

The internet-born brands, many of which are direct-to-consumer, never had to look good on a store shelf — but they do have to look good on your shelf. While creating products — from packaging to formula to application technique — designed to dazzle in a selfie, shelfie, flat lay, tutorial or unboxing video is now second nature to many, it’s pushing everyone to adapt.

Think about it: with social feeds the new magazines, and anyone with a phone the new art directors/models/photographers/publishers, how a brand’s news gets out there is in the hands of its customers. Might as well give them something to work with.

For her Rainforest of the Sea Water Foundation, Tarte founder and chief executive Maureen Kelly strategically used a dropper dispenser with social media in mind: "The foundation can run down your cheek like a teardrop, and then you can use Rewind mode to pull it back up, which looks cool on social," she says. "Back in the day we might have just put it in a pump, but with the dropper, when you see it on Instagram, it's 'Oh my God, what's that?'"

Chanel recently launched @welovecoco as a platform entirely dedicated to showing off the brand's beauty products — and what its community of chicsters do with them. It appears to be working, with everyone from real girls to the It-Girl elite dutifully crafting their Insta-odes, with the hopes that Chanel will repost them. It's (gratis) crowd-sourced content. It's also sort of genius.

A product’s name should be hashtag-able, too. It needs to quickly say what the product is, and draw you to it, says Kelly. Of Tarte’s 10-second brush-on brow pigment, she says, “Who doesn’t want #BusyGalBrows?”

9. The Blurring of Beauty and Wellness

If there is any question in your mind about the continuing intersection — or, shall we say, convergence — of beauty, health and wellness, look no further than the beauty aisles of many stores, where dietary supplements — once relegated to the vitamin section, or the pharmacy — are now merchandised nearby skin creams and serums.

Free People is expanding upon its Movement concept stores by opening five more dedicated stores and rolling out 10 shop-in-shops across the United States this year, where they accent sporty athleisurewear with RMS cosmetics, Tonik designer supplements, Sakara Life probiotic chocolates and superfood-infused skincare from Youth to the People. “Beauty and wellbeing go hand in hand,” explains Jessica Richards, the company’s head of beauty and wellness. “People want to work out, drink a green juice, and have their skin glow.”

Whereas the concept of “beauty” may have once denoted not much more than a skin and hair care regimen, it is now being viewed (and sold) as a holistic lifestyle. Euromonitor has identified “healthy living” as one of its overarching “megatrends,” and, indeed, consumers who want to look, and feel, good — and who understand the two are intimately linked — are investing in themselves and the companies that help them achieve these goals.

The current blurring of beauty, health, fitness and wellbeing is no trend, it's cultural evolution.

While Goop treats beauty and wellness as separate verticals on their website, they sell traditional beauty products, vitamins and ingestibles as one presentation at their brick and mortar Goop Lab Stores because, “we find that’s how people are shopping,” says Blair Lawson, the company’s chief merchandising officer. With its own launches, the brand is increasingly developing new products, like Goop Glow Morning Skin Superpowder, with an eye on both beauty and health.

Good health, good vibes and the good skin that hopefully follows, is turning out to be very good business. At Goop, the penetration of the wellness category has doubled since last year, increasing from 7 percent to 14 percent, and in terms of dollar sales, it has quintupled, says Lawson. Beauty and wellness combined accounts for 64 percent of Goop's overall business
(up from 40 percent last year), and has quadrupled in dollar terms.

The current blurring of beauty, health, fitness and wellbeing is no trend, says Lawson, it’s cultural evolution.

BoF's latest special print edition — including our special report on The Business of Beauty — is available for purchase at shop.businessoffashion.com and at select retailers around the world. If you sign up to BoF Professional before June 29, 2018, you'll receive this issue as part of your annual membership, which also includes unlimited access to articles, exclusive analysis, invitations to networking events and the members-only app. Subscribe here today.

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