The beauty industry can change fast. Trends pop up, consumer demands shift, and if you blink, you might miss a great opportunity. It's a fast-paced environment where smart strategy is a must and reports like "State of Fashion: Beauty Volume 2" done by The Business of Fashion and McKinsey & Company can give you the roadmap for solving the growth puzzle.

For brands to stay ahead, it’s important to understand the fundamental shifts that redefine how consumers connect with products and what truly drives growth. As stated in the report, it outlines “how beauty leaders should navigate evolving consumer expectations, market deceleration and regional volatility in the years ahead.”

It’s packed with the kind of insights that cut through the clutter. In this article, you’ll find the TL;DR version with the main takeaways, translating complex data into actionable strategies for your beauty brand's growth. After all, we're talking about a $441 billion global beauty market, projected to grow a solid 5% annually through 2030. And this is how you can get your slice of that pie.

What builds true value in customers eyes

Ever felt like some products are all hype? Your customers feel it too. This report highlights that consumers are increasingly value-conscious, skeptical of hype, and laser-focused on whether products truly deliver. The era of effortless growth is cooling, demanding more from every product.

75% of executives surveyed expect this scrutiny on perceived value to be the biggest theme shaping our industry. It's a clear signal that brands must justify their price tag with tangible performance. And, what I find most interesting, is that a surprising 63% of consumers do not think premium beauty products are higher-performing than mass beauty ones.

Your takeaway: For private label beauty brands, this means prioritizing efficacy and transparency. Your products simply must perform! Focus on delivering visible results and aligning your products with clean beauty standards, that's how you build trust and capture "true value" in your customers' eyes.

Marketing's evolving balancing act

The digital marketing space is getting crowded, and some of the old tricks just aren't cutting it. The report shows that the importance of influencers in inspiring beauty purchases has declined by 8 percentage points in the US, China, and Europe between 2023 and 2025. And what is even more interesting in the age of AI - 58% of consumers don't trust AI-generated content for beauty. But AI-powered personalised experiences have 40% potential to increase conversions.

So, what works? Real user reviews remain the most trusted source of discovery for 51% of surveyed consumers. Experts like dermatologists and makeup artists also play a vital role in fostering trust.

Your takeaway: Focus on authentic storytelling. Don't just chase trends or rely solely on paid ads. Invest in products that naturally inspire genuine reviews (UGC is gold!). Consider collaborating with credible experts and build your brand's voice through high-quality, differentiated content that builds genuine trust better than just relying on paid reach alone. Use AI smarter - personalized experiances,

Channels at a crossroads

How and where people shop for beauty is changing. The report predicts that global beauty sales made online will jump from 26% in 2024 to over 30% by 2030, with online marketplaces leading the charge.

This shift extends to socials, too. Social media sales are on the rise, with social commerce being a core sales channel for 31% of beauty executives. Platforms like TikTok Shop are reshaping virality, helping even smaller brands quickly reach critical mass.

Beyond acquisition, loyalty programs are becoming more and more important for sustainable growth. These programs attract and retain customers, building enduring relationships even when competitors offer lower prices or faster delivery.

Your takeaway: Don't limit your reach. Strategically expand into online marketplaces and social commerce platforms. Develop loyalty programs to build long-term relationships. Be where your customers are, and make it easy for them to find you.

Product packaging now a part of the experience

With product efficacy now being almost a baseline expectation, how can you differentiate your beauty brand? The report highlights that sensory appeal and design drive consumer attachment, directly linking how a product looks, feels, and smells to emotional connection.

Elevated packaging and design can help sell products in self-service environments. For brands using private label skincare products, this is especially important.

Your takeaway: Your product's packaging and sensory profile are just as vital as its ingredients. Invest in unique and aesthetically pleasing design that tells your brand's story. It's how you create a memorable experience and differentiate your brand.

Product category dynamics & trends

The report also highlights changes in specific beauty product categories. Here’s a look at what’s driving growth and consumer choices:

Skincare: This remains a leading category, with its consumer base continuing to expand moderately across age and gender. There's a strong focus on the connection between skincare products and wellness routines. Consumers are seeking products that are "clean," "natural," and "scientifically tested / clinically proven results".

Hair care: This segment shows an ongoing appetite for sophistication and innovation. Customers are willing to invest in better products and more detailed routines.

Bath and shower: This category sees new opportunities and potential for disruption. There is an increased focus on not just cleansing, but skincare-infused formulas or support of the skin's microbiome.

Sun care: Sunscreen and sun aftercare products (excluding skincare and makeup with SPF) are expected to continue to grow in appeal, especially in the US. Innovation can act as a significant growth driver globally.

Makeup (color cosmetics): This category is seeing disruption led by masstige brands. Masstige products offer the perceived quality and aspirational appeal of prestige brands, but at more accessible, mass-market prices. Innovation like skincare-infused makeup and playful textures can give even prestige brands a boost. To drive repeat purchases, brands can explore smaller formats, limited editions, and loyalty programs.

Men's skincare: Report shows that men's skincare segment's annual growth rate has also seen a significant increase over the last three years compared to pre-pandemic levels. This indicates an opportunity for premium, specialized men's offerings.

Beauty supplements: This category has grown in popularity, connecting beauty to longevity and appearing in newer formats like drinks and gummies. 41% of consumers currently use beauty supplements, and almost half of those who don't are interested.

Price tiers: Products that solve specific problems are encouraging consumers to spend more. And if a product truly stands out with unique performance, shoppers are more willing to splurge.

Shape your brand’s future

The beauty market demands adaptability, sharp insight, and a cohesive strategy across what products you choose for your lineup, your marketing efforts, and sales channels.

Focus on the efficacy of your private label products, make sure they are aligned with clean beauty standards. Build genuine relationships with your customers and leverage their reviews to build trust and loyalty to your brand. And, don't forget about your identity, because for brands using private label products, great design will set you apart.

The insights from this report provide a powerful compass. By embracing these strategic shifts, you're actively building your brand’s future. I hope this summary will help you make smart decisions to adjust to changes.

If you’re interested in the full report, download it below.

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State of Beauty: What Brands Must Know