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Why Cosmetics and Personal Care Innovation is Key to Creating Tomorrow’s Beauty Trends Today

3 MIN READ
A jar of white cream is opened on a light blue background. Water splashes around and partially over the jar, creating a dynamic and fresh appearance. Circular blue lines are faintly overlaid on the background, mirroring how sustainability is integrated seamlessly into innovative product development for 2025.

Innovation is one of the biggest challenges for cosmetics and personal care businesses. There is constant pressure to keep up with changing consumer trends driven by social media, remain competitive, get new, seasonal products out on time, all while ensuring products meet compliance regulations. It can be difficult to ensure that the risk of investing in new product development, expanding to a new market or testing new technology will create the best possible assortments for each target market, appeal to consumers and maximize return on investment.  

Take 5 minutes to read this blog to understand the benefits of innovation for the cosmetics and personal care industry and discover the game-changing technology that supercharges ideation, collaboration and go-to-market execution.  

What is the Current State of Innovation in the Cosmetics and Personal Care Industry?

It may come as no surprise to those working in the cosmetics and personal care industry that investing in innovation has slumped since the pandemic. It’s no wonder considering the last five years have seen labor shortages and supply chain challenges, the rising cost of raw materials, higher consumer scrutiny of ingredients and efficacy and also global inflation hitting consumer wallets and businesses’ bottom lines. Keeping up with the overwhelming daily challenges of developing products and bringing them to market steals focus away from invention. 

According to market research firm Mintel’s Global New Product Database (GNPD), in the first five months of 2024, just 35% of global CPG launches (i.e. across food, drink, household, health, beauty, personal care and pet care) are genuinely new products. This is the lowest proportion of innovation Mintel has recorded since it began tracking new products in 1996. It means that so far in 2024, 65% of launches are ‘renovation’ i.e. line extensions, reformulations, new packaging or relaunches. 

The same study shows that after the shock of the 2008-09 global financial crisis, larger CPG companies may have consciously decided to innovate less because of concerns about return on investment. However, a lack of R&D investment from bigger brands post-financial crisis created the environment for startups such as Harry’s razors, OLIPOP, Documents and Glossier, to tap into the rise of digital technology and gain a foothold in their respective categories. 

This lack of investment in innovation has hit the established cosmetics and personal care brands the hardest and has made them more likely to focus on reformulations and extending existing successful product ranges that already have bestselling products. Cosmetics and personal care innovation hasn’t bounced back since the COVID-19 pandemic either. In 2019, 54% of cosmetics and personal care products were new but that dropped to 46% in 2024.  

These stats don’t mean that cosmetics and personal care innovation is impossible. It’s the exact opposite, actually. The declining number of companies investing in innovation means there is great opportunity awaiting those companies that do.  

Brands that are innovating are rewarded

Brand Finance in its Annual Cosmetics 50 2024 report, found that L’Oréaltopped the most valuable cosmetics brand list again this year and earned the highest Sustainability Perceptions Value (SPV) based on its environmental initiatives that focus on innovative solutions for carbon capture, reforestation and ecosystem restoration. L’Oréal is also seeing success this year fuelled by strong product innovations. Haircare was the fastest growing category, led by L’Oréal Paris Elvive as the success of newly launched Glycolic Gloss. 

According to the same study, Garnier saw the biggest value growth, up 15% with the success of the brand’s Vitamin C Brightening Serum that helped drive success in the skincare market. 

The current state of innovation in the cosmetics and personal care industry shows both challenges and untapped potential. While pressures like supply chain issues, geopolitical uncertainty, rising costs and inflation have caused many companies to deprioritize innovation, the industry leaders who do invest are seeing measurable rewards. Now, let’s explore how embracing innovation offers benefits from meeting consumer demands to driving growth, improving operations and boosting employee engagement. 

A clear liquid droplet falls from a pipette into a glass petri dish against a blue background, symbolizing the innovative spirit needed to tackle product development challenges sustainably in 2025.

The Benefits of Cosmetics and Personal Care Innovation

As consumer demands shift toward sustainable, effective and clean beauty products, companies that embrace innovation, rapidly adapt and meet trends head-on build stronger brand loyalty and a larger market share. Brands like L’Oréal and Garnier demonstrate how a commitment to innovation fuels growth, strengthens brand value and drives success in a competitive, ever-changing cosmetics and personal care landscape.

Brands that prioritize innovation, capture emerging consumer trends and diversify product lines, boost their brand loyalty and sales potential across more markets. Companies like L’Oréal, with inventive product lines that respond to both trends and consumer needs and strong Corporate Social Responsibility (CSR) strategies, show that innovation creates space for expanded product offerings and cross-category growth supporting their position in both mature and new markets. For cosmetics and personal care companies, expanding through innovative products opens the door to untapped opportunities, increasing market reach while building a stronger, future-proofed brand. 

Innovation isn’t just limited to products. Innovation can come from streamlining product development processes and putting technology and collaboration tools in place to connect teams vital to ideation like marketing, R&D and planning and more. Advances in Artificial Intelligence (AI) also give the most innovative companies fast and accurate trend and product insights to empower development teams to focus on creating successful products that will resonate with the market. Technology also creates a central space to capture and assess ideas. Optimizing operations empowers cosmetics and personal care companies to respond faster to market challenges and adapt to shifts in consumer trends, regulatory changes and ingredient availability with agility.  

A focus on innovation and optimized processes doesn’t just improve response time to market challenges and trends, it also enhances employee satisfaction and retention. Implementing intuitive, user-friendly and innovative technology empowers teams to work more efficiently, freeing them from time-consuming tasks like hunting for or entering data, managing outdated spreadsheets or waiting on colleagues for updates. Employees focus on value-added tasks like market research, formula development and packaging innovation which leads to greater creativity and innovation. With centralized, real-time data, teams gain full visibility into each phase of product development, improve collaboration and reduce stress. Plus, centralized product development systems give teams the visibility they need to make decisions faster. Investment in modern technology supports a culture of innovation and keeps valued team talent engaged. 

A row of vibrant lipsticks in various shades, including pink, red, and peach, are displayed on a shelf. Reflecting innovative solutions to 3 Product Development Challenges You Must Solve in 2025—And How to Overcome Them Sustainably, the backdrop glows with colorful lights.

Discover the Freedom to Innovate with Next Generation Technology

To free teams to ideate, collaborate and innovate, many cosmetics and personal care companies turn to technology like market intelligence software and Product Lifecycle Management (PLM) solutions.  

Market intelligence software takes the guesswork out of trend forecasting and it massively reduces the time spent on manually gathering data. Game-changing market intelligence solutions are AI-driven pricing intelligence, competitor benchmarking and trend forecasting technology that empowers cosmetics and personal care companies to drive product decisions and grasp market trends and consumer preferences.   

Once teams home-in on the right product innovation to target, PLM takes over ideation, project management and launch to market. PLM is a product development platform that centralizes the actionable data of every phase of development from planning and formula creation to sourcing, costing, packaging, labeling and compliance.  

A modern PLM is at its core a platform for cross-departmental collaboration, improving communication and reducing silos – all with the aim of super powering innovation. PLM connects internal and external teams so they can take advantage of unique inputs, knowledge and skillsets, bringing them together to make actionable product-related decisions. By empowering teams with technology that gives them the edge, cosmetics and personal care businesses set the foundation for innovation, optimized product development and stay one step ahead of the competition. 

The benefits of investing in an innovative PLM solution are vast and include: 

  • Increased sales by up to 10% 
  • Products to market up to 60% faster 
  • Reduced COGS by up to 15% 
  • Improved team productivity by up to 50%  

In today’s competitive market, innovation isn’t a choice but a necessity for cosmetics and personal care companies aiming to stay ahead of the game, satisfy consumer expectations and boost market share. From meeting consumer trends and expanding markets to improving operations and employee satisfaction, innovation creates opportunities for growth at every level.  

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