long history of beauty industry

People have been using cosmetics since ancient times: the Egyptians used dark eyeliner that appeared in everyone's mind through their paintings and idols, while most people know that Victorian women often fainted, not because of their modesty, but because of the widespread use of lead-based creams to "improve their complexion", coupled with a girdle of bondage.

For the most part, these rituals were performed by women and in relative secrecy: one must cling to the idea that beauty is natural and effortless beauty, not an artifice.

So how did the beauty industry, which is as old as the concept of beauty itself, become not only mainstream beauty, but lauded as one of the best industries to launch a company? This is especially noteworthy at a time when traditional industries are struggling, and at a time when retail is facing great challenges.

In this article, we attempt to answer this question. We begin by defining the industry and its key players, both traditional and existing, and we briefly touch on industry size and trends, as well as the counter-cyclical nature of the beauty industry. We then go through two companies, Glossier and Deciem's The Ordinary, to understand how they have tackled (and solved) the problems of engaging consumers, building brand loyalty and creating unique experiences, and draw some relevant lessons for all direct-to-consumer (DTC) companies.

In fact, the beauty industry is quite broad: it includes both services (e.g., hairdressers, barbers, etc.) and products. In the U.S. alone, the beauty services industry employs more than 670,000 people, and according to the BLS, its employment growth outlook is "faster than average" with a 13% growth rate (2016-2026). It was valued at $532.43 billion in 2017 and is expected to reach a market value of $805.61 billion by 2023, according to a study.

U.S. beauty industry segmentation by revenue.
It remains an extremely concentrated industry, with the 20th largest manufacturer in the world still generating only 5.5% of the revenue of the largest manufacturer. The French giant, L'Oréal, has an eye-popping 20.2% market share in Western Europe.

Traditionally, the industry has been divided into high-end and mass-market segments. According to a 2017 study, the premium segment accounted for 28% of total global sales, while the mass market accounted for 72%.

Traditional distribution channels focused on brick-and-mortar stores, particularly through supermarkets, specialty stores, pharmacies, and beauty salons. However, direct sales and e-commerce have become increasingly prominent, with online sales for beauty companies growing much faster than general internet sales: according to Internet Retailer, the category grew at a rate of 23.6% in 2017, reaching over $5 billion in online sales. It surpassed the 15.6% growth rate of the U.S. e-commerce market in 2017 and the 18.5% growth rate of the entire Internet Retailer 1000. The company in question is Glossier, which we will describe in more detail later in this article.

For the purposes of this analysis, we will focus on the product side rather than the services, and on young companies that are using product and other innovations as growth engines (not entirely coincidentally, they fall between the premium and mass markets).

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