The trends that will define the beauty industry in 2023

Beauty has proven to be a resilient industry over the past year, holding its ground amid a challenging cost-of-living crisis that has heavily impacted other sectors. Moving into next year, beauty is looking stronger than ever, as rapid digitalisation and loyal consumers back its annual growth rate of 4.64 percent as predicted by Statista, with the market already amounting to 528.6 billion dollars in 2022.

FashionUnited has scoured through multiple reports to bring the most definitive of industry trends to light, each of which come with the goals of pushing consumer engagement, building trust and completing satisfactory transactions.

Hyper-personalisation

Personalisation has become a highly important factor throughout beauty, as more and more consumers expect to experience personalised interactions from related companies. In fact, according to a study by McKinsey & Company, 71 percent of consumers expect such a service, while 75 percent are more likely to make a purchase if provided with personalised recommendations.

As part of its own report, Shopify highlighted various methods that have proved effective in personalisation, including Sephora’s app, which allows shoppers to submit options like hair and skin type and take part in quizzes to define recommendations.

According to Revieve, a provider of digital-first solutions, however, this trend will be driven by the use of selfies, which when optimised can offer shoppers personalised product recommendations prior to a purchase. In its report, the firm said it found evidence that users who engaged with its self analysis made 53 percent more purchase-related actions than those who didn’t, resulting in a completion rate that was 60 percent higher than other shoppers.

Brand loyalty

Loyalty programmes and initiatives represent a huge opportunity for beauty brands, Shopify noted, allowing them to personalise their offering and retain more long-term customers. In the coming year, the firm added that consumers will still be looking to purchase from brands that offer rewards, as it found that 56 percent of consumers said they were more likely to buy from a brand with such a programme in place. Many further cited that automatically applied rewards and personalised rewards as the top reason for using them.

Revieve also confirmed that relationship-building with customers was one of the most important factors, despite the industry often leaning towards facilitating transactions. In its own report, the company said building loyalty will be “the key to the future success” of the industry, highlighting its own efforts of consumer goal-setting initiatives and routine recommendations.

AI, AR and VR

Almost every industry has been faced with the need to rapidly digitalise this year, a trend that will undoubtedly only be enhanced in 2023. More beauty brands will be looking to increase their efforts in utilising artificial intelligence (AI), augmented reality (AR) and virtual reality (VR) particularly, with each one providing a variety of benefits for those that optimise them. AI is useful for helping online shoppers identify the right products for them, and can be adopted as a way to create consumer-specific formulas and push individualisation. Shopify highlighted Proven’s AI tech, which allows users to receive matching products for their own skin type and lifestyle on a seasonal basis.

Additionally, a vast amount of shoppers have already come into contact with AR or VR features while shopping, as a wider number of social media platforms begin to implement such elements into their offer. Beauty retailers can use these features to demonstrate their products, allow customers to virtually try items on and connect with audiences in their own home. According to Shopify’s research, products featuring 3D/AR content had a 94 percent higher conversion rate than those without.

It is these features that Revieve helps brands to build on, with the company already having launched an AI Skincare Advisor and further AR-powered solutions that help brands in establishing a loyal customer base. The firm found that, on average, users are two to three times more likely to become returning customers when they come across such programmes.