Personal care – beauty 2022: Skincare gets a premium makeover

Cut out the middleman and pay less for high-end beauty products. This is the pitch from Beauty Pie, the subscription-based retailer that officially launched in 2016.

But 2022 has arguably been its most momentous year. Thanks to some savvy marketing, Beauty Pie reports a 40% uptick in subscribers to its service, which offers discounted premium products for a flat fee of £59 per year, or £10 a month.

“We’re seeing a demand for high-quality, science-led skincare, in particular serums such as YouthBomb,” says a spokeswoman for the brand. She’s referring to its serum created in partnership with consultant dermatologist Andrew Markey, which contains 15 active ingredients including hexapeptides and exopolysaccharides. It costs £185 for non-subscribers and £44 for subscribers.

Given its core aim is to “cut out the middleman”, Beauty Pie may seem entirely at odds with the big retailers and brands. But its lineup is indicative of what’s working on supermarket shelves. Skincare giants are increasingly turning to science-based ingredients to add value to the category, in which prices have risen by an average of 4.2%.

Our Top Launch (see below) from Simple is a prime example of this tactic. Using the kind of ingredients that would tempt Beauty Pie subscribers – hyaluronic acid and niacinamide – it’s been able to charge nearly £8 for a 30ml bottle of serum. It’s one factor behind the £6.3m gain for the Unilever brand, which was largely driven by an 8.9% rise in average price per pack.

Olay – whose value has similarly benefited from a 8.7% rise in average price – is also going down this route. It began the year with the launch of its Vitamin C collection, which puts the ingredient front and centre.

“The supercharged Vitamin C + AHA formula promises visibly brighter skin in just one day and has demonstrated strong value sales,” says Katharine Newby Grant, vice president of beauty at brand owner P&G Northern Europe.

This emphasis on premium cues has been noted by market research firm The NPD Group. The value of the prestige skincare market stood at £926m in the first half of 2022, it says – up 23% on the same period in 2021.

“This dynamism is attributed to premiumisation, whereby consumers upgrade their beauty purchases to include larger sizes and more potent formulas,” says Emma Fishwick, account manager at NPD UK Beauty.

This explains the rise of more premium skincare challengers such as Emma Hardie, whose retail sales have more than doubled to nearly £200k. Or Skin Saints, up 335% to just shy of £700k. Dr David Jack’s eponymous brand is another example – and one that leans heavily on science. It reports “significant” sales growth following its relaunch and a three-year reformulation project.

For Jack, the brand’s success is down to a shift in consumer attitudes. “There is so much misinformation created by brands in order to oversell products and I personally believe that consumers are becoming increasingly aware of this,” he says.

Posh cosmetics

This shift goes beyond the realms of skincare, too. Premiumisation is also key to successful innovation in cosmetics, says NielsenIQ analyst Sara Timms.

In the case of mascara, she points to successful NPD such as Maybelline’s Colossal Bounce and Rimmel’s Thrill Seeker. Together, the brands have amassed an extra £40m.

Timms also highlights the rise of “plant-based ‘clean’ beauty”. That is evident in the launch of Rimmel’s self-described “clean” and “100% vegan” Kind & Free range in February, and Sally Hansen’s Good, Kind, Pure plant-based nail colours.

Such innovation is vital to attracting the younger crowd. “The beauty category is rapidly evolving. Brands need to change cues to appeal to the younger generation – the generation driving trending beauty looks,” says Kimberley Howard, trends expert at consumer insight firm Verve.

She points to big brands like Max Factor, up £10.8m, and smaller ones like Morphe, which collaborates with stars such as singer Madison Beer on make-up looks.

Those smaller brands are set only to gain further sales as online marketplaces take off. In November, Superdrug launched a marketplace with 300 health & beauty brands, including several challengers that aren’t in stores. Boots is set to go live with its own version in spring 2023.

Simon Dale, strategist at digital specialist Organic, believes this will not only offer brands access to new audiences, but could also offer “a little more room to get messages across to their audiences”.

These marketplaces span all areas of beauty, from skincare to shaving. Superdrug’s offer, for example, includes women’s razor brand FFS Beauty – a challenger to market leader Gillette’s Venus.

Not that Gillette will be fearing the competition. The masterbrand is up £21m to over £200m on the back of innovation such as Venus for Pubic Hair & Skin and Gillette Labs Exfoliating Razor.

So, it seems innovation is the name of the game this year. And those who nail it can get a bigger slice of the (beauty) pie.