What Beauty Brands Need to Know Going Into 2023
It’s that time of year again when all eyes are on 2023 strategies. Driving beauty brand growth through innovation, investment and partnerships is the focus for brands like Rare Beauty, Too Faced, Versed, e.l.f cosmetics, Smashbox, Estée Lauder and more at Beauty Connect LA 2022. Here are our top takeaways from the conference for the latest beauty trends and expert advice going into the new year.
Transparency in Ingredients, Communications and Reporting
From ingredient listing to reporting, beauty brands plan to double down on transparency. Here are some factors to take into account:
- Share useful information about ingredients so customers can make fully-informed decisions.
- Clear language is crucial. Avoid overarching terms that are not well-defined.
- Be honest with your customers about what you do and don’t know.
- Communicate your sustainability goals and ESG reports openly to stakeholders, customers and investors.
Demand More From Vendors and Partners
If brands want to label their products as safe, green or eco-friendly, they need data to back those claims. When working with third-party vendors like manufacturing partners – always push for more information. Now more than ever, we’re seeing more packaging options, availability for high-quality ingredients and information on ingredient safety hazards. Traceability matters, so brands must drill down on data to succeed.
Profitability Over Growth
For brands engaging in the world of private equity or venture capital, this is what you need to know to attract investors or buyers:
- Brands should be diligent with their cash spending. With inflation rising and consumption slowing down, it’s becoming more challenging to raise capital.
- For those raising capital too early for VC, look at your strategic partners and distributors/operation partners as potential resources.
- ROAS is not in Vogue anymore – it’s all about CAC (customer acquisition cost) and traction. Consider having a gross margin basis over 70% (DTC brands should look at the contribution margin), look at velocity (prove consumer adoption, loyalty and multiple SKUs), and assess panel data and customer demographics (identify your customer, who the brand resonates with, repeat purchasers, etc.).
If you’re a beauty brand looking for full-funnel expertise in 2023 – you’ve come to the right place. Power Digital’s beauty division specializes in growing beauty, wellness and grooming businesses with results-driven marketing and communications campaigns for a 360-approach that moves the needle at every touchpoint. With decades of combined industry experience working with global beauty brands, we know what it takes for your brand to rise to the top. Get in touch with us today.