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The Impact of Analytics on the Beauty Industry

The Impact of Analytics in the Beauty Industry

We, humans, are social beings, and physical beauty plays an essential role in our lives. The impetus to look good is not a few hundred years old but has been so since time immemorial.

Being judgmental about how we look physically is the first thing that someone does upon meeting us. Most people think that the beauty industry caters only to those who are in the limelight. We won’t deny it, but would just add the fact that it does so for the rest of us too.

It is not just about the makeup, the perfume, or the fake eyelashes; it also has something or other to do with our everyday use items such as toothbrushes, hair clips, and everything that’s around us. If you still have any confusion, look at the way face masks are fast evolving as a fashion accessory all over the world.

Beauty Industry

If we look around, most businesses in the beauty industry are revamping their strategies and bringing in ideas to revamp their digital outlook, which is not merely a challenge but also gives them a unique proposition to excel. The benefits of using analytics are multidimensional, and it is not surprising to see so many organizations eager to adopt it ASAP.

When you are the CMO or CEO of a corporation and you are given two options—either to make constructive decisions based on facts and figures or to decide it all on guesswork—it is easy to construe your choice. That is why we are raving so much about the use of analytics in the business industry.

The market size of the beauty industry

The beauty industry has been booming for the last few decades, and a Business Insider report values it at $532 billion and expects it to cross $800 billion by the year 2025. In terms of market share, the USA is the current leader with about 20 percent of the market share, followed by China and Japan at 13 percent and 8 percent, respectively.

Trends in the beauty industry

Here are the trends that will sweep over the beauty industry in the coming years:

Increased reliance on Big Data

In today’s time, you will hardly find any industry that has no involvement in tech. If you look around, you will find the big names in beauty, such as Shiseido, Ulta, L’Oréal, and others, acquiring the latest technology to stay ahead of the rest. Not only that, but even the e-commerce giants are trying to have a piece of the cake by indulging in collaborations, consumer insights, and offering lucrative deals to the honchos of the beauty world.

The word “premium” has a new meaning.

Gone are the days when the word “premium” symbolized vanity and luxury. And health and ethical claims are quickly becoming the new premiums, and the marketing strategies are experiencing a shift toward consumer wellness instead of focusing primarily on brand names as they did in the past.

Beauty Industry

Development of hotspots

Like with most other products, we will soon experience a move towards country-branded beauty products. People are getting more and more inclined towards verifying the “made in” tags and associating themselves with cultural values. The pandemic will further encourage people to buy local products, and it should lead to the development of several beauty hotspots shortly.

Increased focus on the male segment

A few years back, most beauty products revolved around women. Even though companies have started focusing on their male counterparts too, the focus is minute even today. In the coming days, we expect parity between both genders. We do not say a 1:1 ratio, but at least a 7:3 ratio can be expected. Men prefer mental well-being, prevention, and self-care over anything else.

Not to forget, the repercussions that we are suffering due to COVID-19 should also force brands to ignite some interest in developing products that cater to human health and wellbeing.

Male Beauty Influencers

Emphasis on business analytics

Businesses in the beauty industry are increasingly realizing the multiple benefits of employing “big data” in their day-to-day business operations. The inculcation of business analytics as a part of their business will open new avenues for them. With its introduction, companies can establish the right mix of humans and machines to achieve their goals more effectively and efficiently.

Types of analytics

Descriptive, Predictive, and Prescriptive Analytics: Marketing Examples – Data DemystifiedDescriptive, Predictive, and Prescriptive Analytics: Marketing Examples – Data DemystifiedDescriptive, Predictive, and Prescriptive Analytics: Marketing Examples – Data DemystifiedDescriptive, Predictive, and Prescriptive Analytics: Marketing Examples – Data Demystified


Descriptive analytics is the answer to the question, “What has happened?” Every single day, multiple events need analysis to understand what should be the next move of the brand and how to approach the next day. It tries to take cues from the past to ensure that there are no loopholes in future strategies.


Forecasting is the process of predicting future outcomes based on past data. Data managers can analyze several trends to forecast sales in the upcoming months, or they can figure out demographics to concentrate more on or ignore in the future.


A significant component of data analytics is to predict the behavior of a consumer or a particular element, such as machinery or credit scores. It allows organizations to be proactive and take steps to mitigate possible risks and benefit from upcoming trends.

Analytics has led to a surge in alternate advertising mediums

One of the most significant benefits of utilizing analytics is that brands get a proper insight into consumer behavior, i.e., who they are and what they are up to. Once you know the answer to the first question, you can then figure out the right way to woo them.

The answer to the latter question will inform you of the right medium to use. The beauty industry generally revolves around how one looks, and platforms like Instagram and Pinterest are giving them the right impetus to channel their ideas.

The inculcation of social listening has opened a new avenue for brands to explore. They can be more confident in using not only the billboards and TV advertisements but also other options to generate more interest among the consumers.

Beauty Industry

Social listening is allowing brands to develop consumer-friendly products

Social listening has been a boon for both consumers as well as organizations. With analytics at the fore, companies are making sure that customers’ voices never go unheard. When social media first came into the picture, most of us assumed that it could only be useful in spotting trends and improving engagement. But it has been far more valuable than we anticipated.

Brands are keeping a constant check on what people are saying about them and tweaking their products to remove any consumer apprehensions that may become a hurdle in the future. Social listening is a huge leap forward from traditional campaigning. It allows brands to gain a competitive advantage by generating insights that are far more meaningful and consumer-worthy.

Happy Customers

The effects of analytics on the beauty industry

Analytics has redefined the way organizations operate, and we see a significant overhaul in their strategies. Be it development, marketing, or packaging, it has made sure that businesses find an improved way to conduct it all.

Here are some ways in which analytics have affected the beauty industry:

Market & competitor research

With the help of analytics, beauty conglomerates can build a coherent and digestible marketing report that not only maps their competition but also gives them an idea of the trends in the market. A well-drawn out competitor metrics coupled with the share of voice will let you keep track of the number of messages you receive, your engagement level on various posts and the chatter around the brand, and how these stack up against the competition.

market research

These reports contain technical datasheets, pricing documents, marketing strategies, and a lot of other highly-specialized information. These leverage your ability to look into your competitors and act as an eye-opener to give you an exact idea of how people are interacting with your brands and the reason why your competition is performing better at specific places. It will allow you to refine and adapt them to the changing market needs.

“Data and artificial intelligence allow us to move faster to create cosmetic products that meet the infinite diversity of beauty needs and desires of consumers around the world,” said Philippe Benivay, IS Experimental Data Intelligence at L’Oréal.

Development of new products and services

Research and development of a new product is generally an unpredictable affair. You have no idea how long it will take, what the cost would be, and if you will get a viable final product or not. Most beauty brands employ social listening techniques such as share of the market, sentiment analysis, and others to understand what customers are seeking.

One of the chief reasons for uncertainty is that intuition is linear, whereas it is the exact opposite in the real world. It has forced brands to employ predictive analytics, which gives businesses a lot of data to play with and they are no longer dependent on assumptions.

New Product Development

The development of products and services has started to rely on advanced analytics, machine learning, AI, and other methodologies that are far more reliable and capable of churning out realistic results.

Beiersdorf, an international skincare company, was seeking help to develop a new body lotion made from natural ingredients. Their initial formula failed within a few months. The team recognized the need to accelerate their development process and make it error-free.

When they couldn’t find any way out, they employed a predictive analytics model and combined it with a virtual formulation development process. It allowed them to achieve the new formula within a fraction of the time they had first assessed.

Traditional retailers are embarking on an experimental journey

The availability of concise and assured information due to the usage of analytics has led to brands taking on an experimental journey and rampaging into new territories. Big Data is enabling entrepreneurs to depend less on guesswork. It is helping them in creating a brand story and understanding the market segments better, thereby improving their targeting abilities.

Brands like H&M now have a full-fledged app that lets you style yourself your way. Asos has now started showing photographs of their products on plus-sized models too, and it is a welcome change.

Retail Stores

Take a look at Rihanna’s Fenty Beauty range. It aims to provide more choices for women with darker skin tones. With the help of data analytics and machine learning, it curated a dedicated line of products catering to these women.

It came as a surprise when its Pro Filter Foundation line, consisting of around 40 different hues, had the darkest one selling out faster than the rest. The brand value was estimated to spike up to $72m within a month of its release, announcing the success of the experiment.

Fenty Beauty - Rihanna

The attempt to develop sustainable alternatives that work the same

With the clean beauty movement gaining more traction with time, it has forced developers to find sustainable alternatives to their popular products that are not only toxin-free but work the same too.

Also, several governments all over the world are asking beauty brands to focus more on developing environmentally friendly products. It has made brands far more conscious of the ingredients that they choose and their effects.

The indulgence of social media has had a massive impact on brands and the lofty claims that they once made. Analytics has made it possible for them to gauge the repercussions of every step they take, and it has ensured that they are far more responsible and shell out products that are meaningful in every sense.

clean beauty

Unless you are a well-established brand with an unfathomable amount of free cash, it won’t be feasible for you to test thousands of raw materials to figure out what works and what doesn’t. It is the reason innovation in the old days was limited to only a few cosmetic brands.

In the analytics world, you get a library of real-life compounds and structures, as well as databases for hypothetical compounds and their characteristics. It allows brands to ascertain the right ingredients for their products without having to research them for days, or months, at a time.

Brands either use these models and simulations of actual processes or use statistics and other analytics to understand the feasibility of the end products that they have in mind. It has allowed the smaller players to be at the forefront of innovation too.

Discovery of market influencers

Gone are the days when you would see brand representatives coming over to your place and requesting you to answer some of their questions. The world is going Digital and brands are shifting to social listening to ascertain the right medium for themselves.

The beauty industry was one of the first to discover the art of influencer marketing. A survey by Econsultancy states that around 65 percent of those surveyed relied on social media to identify and select beauty products for themselves. In the day and age of social media, seeing is very close to believing, and it makes choosing the right influencers a crucial decision.

Beauty Influencer

There are several influencer communities and search tools that can help you find the right leverage for your niche. You can look into the level of engagement that their recent posts have garnered to make sure that you are making more informed decisions.

Traditional marketing revolved around what the eye saw. Big data has brought about a massive change. Today, marketing is more about evidence. It allows you to draw contextual insights about the outcome of your decisions and draw benchmarks to allocate and ascertain the right marketing partners for your product.

Improved sales and marketing 

Big data allows marketers to fiddle with a lot of data. From analyzing the impact of their strategies to bifurcating the consumers based on demography, analytics plays a vital role in deciding what marketing strategy to employ and how to improve sales. A study by SpencerStuart points out that 58 percent of CMOs point to SEO as one of the primary beneficiaries of data analytics. The more information that is available, the better it is for the leaders to advertise their products.

Beauty Industry

Social listening helps you in keeping a tab of the brand awareness that your campaigns have been generating and when you combine it with the share of voice and market, it will help you figure out the possible reasons for your lagging. With its help, you can not only perform competitive analysis but also bifurcate your target audience into segments, evaluate the results of your existing marketing campaigns, and improve the upcoming ones accordingly.

All of it will help you in improving your marketing tactics, thereby giving a boost to the sales figure too.

Bottom line

The world spends billions on finding the perfect beauty products for themselves. Unfortunately, much of it goes to waste due to incompatibility or ineffectiveness of the product. It gives data analytics a unique proposition to rectify the situation and bring its A-game to everyone involved in this sector.

The preferences of consumers are changing rapidly, and we see an overhaul in the way they shop. Instead of looking at the packaging, people are becoming cautious about the ingredients and the way brands position their products. It has forced brands to seek the help of social listening and other metrics to keep track of what consumers need.

Most brands think big data will give them a competitive edge or help speed up their growth. It is much more than that. It can help you address your internal issues, combine projects to provide synergy benefits, let you ask the right questions to the right person, and ultimately manage your brand and its success better. For all that to happen, you need to make the right inroads first.

We now have to accept that utilizing the prowess of data analytics and its tools is not a one-time affair, but it has become a persistent part of the industry. More and more brands are looking forward to acquiring tech companies to leverage their offerings and improve their customer satisfaction quotient. It will not be wrong to conclude that wherever there is business, you will find data analytics around!