Rethinking skincare: Strategies for a changing market

The skincare market is becoming increasingly saturated with a multitude of new products emerging daily. This makes it challenging to differentiate your brand and justify premium pricing. Today’s repertoire-based consumers seek more than just product efficacy; they desire a connection with brands that align to their personal values and aspirations.

To help brands navigate this landscape, SKIM’s TrendsLab has conducted extensive qualitative and quantitative research to gain a deeper understanding of consumer motivations and the factors that ultimately drive their skincare purchasing decisions.

In this article, we explore these insights and highlight how your skincare brand can leverage them for growth.

Unlock the power of brand value

Our research shows that a remarkable 50-60% of skincare consumers remain loyal to their favorite brands. This highlights the importance of building strong brand value and fostering emotional connections. Interestingly, loyalty was even higher among Gen Z (60%) than older generations (50%), emphasizing the importance of resonating with younger audiences. Building a brand that consumers trust and identify with can lead to repeat purchases, positive word-of-mouth, and a willingness to pay a premium for your products.

The dynamic duo: Brand momentum and innovation

Brand momentum, or the ability to stay relevant and set the agenda in the industry, heavily influences purchase decisions. Our research shows that the interplay between brand momentum and innovation significantly impacts consumers’ willingness to pay a premium, even more so than brand prestige alone. A 10% advantage in innovation can drive almost double the willingness to pay more compared to a 10% advantage in brand ‘premiumness’ (3.2%).

However, striking the right balance is crucial. While momentum is important, consumers still seek products they can trust. This makes it important to also clearly communicate the benefits your innovations deliver.

The indie brand disruption

The tension between trust and excitement fuels two key trends we’re observing in the skincare market:

• The rise of indie brands: These brands are changing the category rules. They spark excitement while quickly building trust and disrupting established players. Their success often stems from a combination of factors, including a strong digital presence, authentic brand storytelling, and a focus on specific niches or concerns.
• The enduring power of social media: Social media continues to shape consumer opinions and drive choices. It’s a powerful platform for brands to connect with their audience, build community, showcase their values and personality, and leverage social proof (such as the number of likes) to reinforce people’s existing beliefs.

Younger indie brands are rapidly gaining market share. These brands are characterized by:

• Digital-first approach: Founded by and for digital natives, their e-commerce experience and marketing strategies are seamlessly integrated with online platforms.
• Niche focus: They often target specific needs or concerns with specialized hero products, establishing themselves as experts in their chosen area.
• Authenticity and community: They value genuine connections and actively engage their communities, fostering a sense of belonging and loyalty.

Critical strategies for a changing market

1. Communicate a consistent brand story: Communicating a consistent brand story is a long-standing principle that remains as crucial as ever. Define a clear brand position, story, and tone of voice that resonates with your audience. Then, ensure consistent delivery of this brand identity across all customer touchpoints.
2. Drive momentum through innovation and reliability: A robust innovation pipeline is essential for growth. However, continuous innovation must be balanced with a commitment to product quality and reliability.
3. Identify and embrace authenticity: Learn from the indie brands’ success by adapting to the new category rules and leveraging the brand within your portfolio that has the greatest credibility to deliver a more authentic human connection.

Remember, today’s consumers seek more than just products; they seek connections. By understanding and leveraging these insights, your skincare brand can thrive and grow in this continually evolving market.

Ready to unlock the true value of your skincare brand?

Explore the TrendsLab skincare insights further directly with Stephen by arranging a live walkthrough of a use case example with a brand value simulator that shows how a deeper understanding of consumer motivations can provide the information you need to maximize conversions and drive sustainable growth.