Between the sustained growth of dupe culture, skincare’s surprise sales swell — and the category’s latest Gen Alpha proponents — and the rise in U.S. social commerce and AI-driven personalization, the inner workings of the wonder industry are evolving rapidly.

On Thursday, CEW’s 2024 State of Beauty Report saw experts from Iced Media, CreatorIQ, Spate, Google, Mintel, NIQ and Circana present key themes and insights pertaining to the state of the wonder industry.

Here, the highest themes and takeaways.

From social commerce to AI, early adoption is vital

With social commerce forecasted to rake in $70 billion within the U.S. this yr alone, Iced Media founder and chief executive officer Leslie Hall dove into the TikTok Shop juggernaut. Beauty reigns because the top-selling category on the platform, which has helped catalyze sales for certain early adopters reminiscent of The Beachwaver Co., which Hall said has sold greater than 300,000 units of its rotating curling iron since debuting on the platform last summer.

Prestige brands each within the U.S. and abroad can implement “exclusives and bundle [offerings], which won’t require them to discount their products,” said Hall, as a method to thrive on TikTok Shop without being discount-driven.

AI programs reminiscent of Meta’s Advantage+, TikTok’s AI avatar and Snapchat’s recently launched AI Chatbot, meanwhile, can function effective means toward consumer acquisition and personalization.

“The AI revolution is here and you wish not fear it; check out and experiment with different tools, and discover what works best for your online business,” Hall said.

Engagement over impressions

CreatorIQ spotlighted five brands which were acquired in 2023 — K18, Naturium, Dr. Dennis Gross, Mielle Organics and Creed — and the unique aspects behind their respective social media success.

K18, which was snapped up by Unilever in December, was the fastest-growing hair care brand by earned media value in 2023, seeing 409 percent year-over-year growth within the metric. An efficient TikTok strategy drove most of this growth, with the platform accounting for a high 43 percent of the brand’s total EMV.

“TikTok is growing across the board, nevertheless it’s generally driving possibly 20 percent to 30 percent of most brand’s EMV on average; Instagram remains to be the dominant platform and driving around 70 percent to 80 percent of the everyday brand’s EMV,” said Alexander Rawitz, director of research and insights at CreatorIQ.

E.l.f. Beauty-owned Naturium, meanwhile, saw 170 percent year-over-year growth in engagement, namely driven by high-profile figures within the skincare community, reminiscent of Hyram Yarbro.

Though Dr. Dennis Gross was mentioned in fewer posts in 2023 than years prior, the brand still saw 135 percent growth in TikTok EMV because “the TikTok content the brand did appear in was just that rather more effective,” Rawitz said.

Mielle Organics saw a large social growth due to latest creators — 50 percent of users who mentioned the brand in 2023 hadn’t posted about it in 2022, with the brand’s Black Friday activations particularly driving buzz.

Creed’s growth was largely driven by Instagram, where the Kering-owned fragrance brand saw 87 percent growth in EMV and 55 percent engagement growth, despite only growing 2 percent in impressions.

Other brands gaining steam on social include Patrick Starr’s One/Size, Saie Beauty, Hailey Bieber’s Rhode, Tower 21 and Refy, said Rawitz, adding that “we’re seeing engagement being more determinative than impressions for growth.”

Education, mind-body beauty and inclusivity through AI

Mintel forecasts three key trends will come heavily into play in 2024. The primary, it has coined “sophisticated simplicity,” referring to a growing crop of value-driven consumers’ deal with “how quality and efficacy play into purchase equations,” said Sarah Jindal, senior director of beauty products and consumer health.

The mind-body beauty connection will even proceed to extend in importance as mental health becomes a growing concern, and wellness-forward ingredients like adaptogens are increasingly harnessed in topical products. Psycho-dermatology, too, is gaining prominence as one other aspect of this phenomenon. “We’re seeing more research on this intersection of dermatology and psychiatry, and getting a greater understanding of how our brain has an influence on our skin, whether it’s psoriasis, eczema, pimples — things like that each one have psychological link,” Jindal said.

Lastly, AI’s growing influence in beauty will allow brands to more easily discover nascent, eco-friendly formulations and packaging options whilst making a more inclusive beauty landscape “through different algorithms which are trained to take a look at these diverse data sets and determine easy methods to cater to a wide selection of beauty needs throughout the consumer groups.”

Gen Z wants good products and higher vibes

Not only is the skincare category swelling, but interest in makeup has exceeded pre-pandemic levels and hair care has, too, growing due to hair density and growth products, Google Search data indicates.

Fragrance, meanwhile, was the fastest-growing subcategory in beauty in 2023 by search interest, increasing by greater than 35 percent. “Gen Z, specifically, is associating fragrance with their energy and vibe; they’ve different fragrances for various moods, energies and emotions — we expect to proceed to see that in 2024,” said Sam Mintz, head of sales strategy and insights at Google.

Gourmand fragrance ingredients like vanilla and strawberry are more popular, while K-beauty can also be seeing a comeback due to brands like Medicube and Skin1004.

In hair care, Amika and Kérastase dominated searches; Rare Beauty, Laura Geller and E.l.f. Cosmetics topped makeup; Valentino, Paco Rabanne and Jean-Paul Gaultier led fragrance searches. By/Rosie Jane and Ffern, meanwhile, were among the many top up-and-coming fragrance brands by search growth.

Interest in mini-size products is on the uptick, particularly alongside lipstick, Beauty Blenders and perfume, with discovery fragrance sets seeing seen 29.1 percent year-over-year search growth.

Maximize omnichannel strategies — and don’t fear the dupe

Beauty saw double-digit sales growth in Africa, Europe, North America and Latin America in 2023, though growth softened in parts of Asia as a consequence of ongoing strain in the true estate market.

Dollar sales growth was partially bolstered by inflation — NIQ reports it costs $132 today to purchase what cost $100 in 2019 — but additionally, consumers are, normally, spending extra money on beauty, and markets like India are seeing standout growth due to the country’s growing middle class.

Within the U.S., TikTok Shop claimed its spot because the Twelfth-largest e-commerce destination for beauty and private care in 2023; Amazon maintained its position as number-one. NIQ’s Tara James Taylor said that “while online is amazingly essential, it’s also essential for for brands to contemplate the experience of the shop — don’t lose sight of that while managing your online and omnichannel strategies.”

Hispanic consumers within the U.S. take six more in-store beauty shopping trips per yr than non-Hispanic U.S. consumers, she added.

Interestingly, wellness and wonder/personal care went head-to-head by way of overall sales growth, netting 11.8 percent and 11.7 percent growth in 2023, respectively.

Celebrity beauty brands, which proceed to be a relevant them within the U.S. due to brands like Selena Gomez’s Rare Beauty and Tracee Ellis Ross’ Pattern Beauty, surpassed $1 billion in sales within the U.S.

“Over 60 percent [of celebrity beauty brands] are still growing, while 37 percent should not growing,” Taylor said.

NIQ also found that the five most-duped beauty brands have sustained a mean 54 percent sales growth, indicating dupe products should not chipping away at their performance.

The unique “dupes,” or private-label lines, have seen 12 percent growth, with the strongest increases in hair care and bath and body specifically.

Masstige beauty’s growing market share

Data from Circana indicates U.S. beauty sales grew 11 percent to $108.2 billion in 2023.

Prestige sales grew 14 percent, while mass market sales grew 11 percent. Masstige brands — though they only represent 11 percent of total dollar beauty sales — are growing faster than the opposite segments, increasing 16 percent.

Masstige brands make up close to twenty percent of total hair care sales, though they’re seeing the softest growth within the category (masstige brands logged 10 percent growth in hair care; 12 percent in makeup; 18 percent in fragrance and 28 percent in skincare).

“Masstige brands are capturing greater dollar share on the expense of each traditional prestige and mass brands, which makes competition broader and more complex in case you’re a conventional player in the wonder space,” said Larissa Jensen, vp of beauty and industry adviser of Circana.

“Prejuvenation” emerged as a trend with younger consumers, who’re increasingly “using minimal or noninvasive cosmetic procedures to reverse signs of aging reminiscent of drained looking eyes and expression lines,” said Jensen, adding that it’s unclear whether the trend will negatively impact sales of traditional beauty products amongst Gen Z.