Beauty Product Launches Have Plunged. Is That Bad?

Based on a prediction by cosmetic chemist Kelly Dobos, we published a No Stupid Questions story in June speculating about the possibility of a R&D and product launch correction in the beauty industry. Now, there’s evidence that a product launch correction is occurring. According to market research firm Mintel, product innovation in the global consumer packaged goods industry is at an all-time low.

While product innovation in beauty and personal care has declined less than it has in other categories—46% of beauty and personal product innovation from January to May this year was new releases versus renovations like reformulations or line extensions compared to 37% in health, 33% in household and 26% in food and drink—Clotilde Drapé, global beauty and personal care analyst at Mintel, points out elevated raw material costs, consumer scrutiny of ingredients and income squeezes have caused beauty brands to rethink their product launch strategies, and product renovations are considered less risky investments than wholly new products.

To understand the beauty and personal care product launch slump, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked 22 beauty entrepreneurs, executives, consultants, cosmetic chemists, manufacturers and more the following: What impact has it had or will it have on the industry? Do you believe innovation will continue to slide? Should the industry work to turn this trend around? If so, how, and what areas do you think could use innovation?

Kelly Dobos Cosmetic Chemist and Adjunct Professor, The University of Toledo

There's a confluence of factors impacting innovation. In addition to increasing costs of inputs and macroeconomic headwinds, some brands have had to divert resources to meet regulatory compliance deadlines for MOCRA in the U.S.

If a manufacturer or brand did not already have enough regulatory support staff, robust quality systems, sufficient manufacturing hygiene practices or safety assessment processes in place before, the new regulatory environment in the US requires considerable time and investment in building out those capabilities or outsourcing them. Cosmetic GMPs (good manufacturing practices), which will lay out expectations for quality systems and plant hygiene are not final yet and that is going to be a significant change for the industry.

All of those areas ultimately should be a priority over NPD at this time because compliance with regulations is not negotiable. While many large multinationals have long-held commitments to those aspects of the business, it’s becoming apparent that there are some operations, in the U.S. and abroad, that haven't.

Necessary, sustaining innovations, not disruptive technologies, will be more prevalent for some time as brands take time to examine existing innovation strategy and recalibrate. It isn’t a bad thing to spend time on research and focus on creating fewer, better products.

It also aligns with sustainability goals. Does the market need another bronzing drop, lip oil, whole body deo, whatever it is in a package that can’t be recycled? Product development could be more deliberate.

Twenty years ago, when I was in business school studying innovation and technology management, we read Clayton Christensen’s book “The Innovator’s Dilemma,” which was based on his doctoral thesis at Harvard Business School. He took great care to examine very different industries and product categories to demonstrate the core principles of successful innovation strategy are universal.

I reread the book a few years ago, and despite the fact that it was published in the late 90s, it’s still incredibly relevant, and I highly recommend that anyone interested in innovation strategy give it a read.

Identifying unique technologies to target hyperpigmentation, adjuncts to existing sun and pollution protection, and methods that reduce waste and energy consumption in production of ingredients and finished goods are areas I see as ripe for innovation. It's not as easy as just dropping the latest trendy ingredient into a lotion or serum. Disruptive innovation takes genuine commitment to basic research.

Racing to get in on the latest viral trend, making dupes, that just leads to competing on price as a differentiator. Some brands are great at it and that's their positioning, but fighting for that cost position can be a tough place to be because outside forces like increased tariffs on componentry sourced abroad or an unforeseen supply chain disruption could impact business quickly and substantially.

Research takes time and the industry has become so focused on speed that product innovation has really suffered. There's often not enough time to think deeply about challenges and devise new approaches to solve them. And if you’re relying solely on a raw material supplier or CMO to bring you innovation, it’s safe to assume some of your competitors have seen that “innovation” too.

So, maybe you get that first-mover advantage in adopting that ingredient, but that could dissipate pretty quickly without exclusivity. Basic research deserves its own time and space and importantly permission to fail and gain learnings from those failures.

Many technological breakthroughs and innovations have their roots in basic research conducted years earlier. That longer term perspective on research may not yield immediate practical results, but it provides the scientific capital from which future practical applications are drawn.

Rachel Johnson Founder and Cosmetic Chemist, The Charismatic Chemist

The trend around product launches is creating a false narrative that business is bad and it's the wrong time to enter the market, when in actuality it's an adjustment from the impact of COVID and inflation. I believe this drop in product innovation is directly correlated to more informed consumers making purchase decisions based on the science behind beauty and brands not being well equipped to offer that scientific knowledge and explanation.

Consumers will continue to demand more from brands when creating new products or marketing reformulations of their existing products. Beauty brands have to be ready to proactively respond to the demand for information by taking the leap to launch or repositioning their current products to meet consumer expectations and concerns.

Product developers and suppliers will need to find new ways to repurpose existing concepts and maximize stocked/itemized raw materials, which is innovation within itself.

Innovation is always happening behind the scenes, and I don't see a decline in my world. Determining if brands and consumers will see or benefit from the manifestations of innovation depends solely on the risks involved in launching the concepts.

We will see new approaches to offering and finding innovative products that are lower risk and investment like my newly launched Product Development Discovery Box that offers beauty brand owners the opportunity to find new product concepts and packaging options with a low-risk opportunity for market entry.

The beauty industry should absolutely turn this around. Success is at stake here. There are so many mutual benefits for all when innovation is the center of product launches. We can start with ending the hyper-fixation on one specific ingredient across brands and products like niacinamide.

Product differentiation must be a priority when creating products. You can easily differentiate your brand and products with intentional ingredient selection, unique yet sustainable packaging and formula delivery systems. All these things require innovation in thought and process that can change the trajectory of the industry and how products are created.

Fred Khoury President, Above Rinaldi Labs

The beauty and personal care market is facing significant challenges, including market saturation, economic pressures and a shift in consumer preferences towards minimalism and sustainability. These factors, combined with increasingly stringent regulatory requirements, have contributed to a slowdown in new product launches.

As brands grapple with finding unique selling points and navigating economic uncertainty, many are focusing on enhancing existing products rather than introducing new ones. This trend may lead to industry consolidation, with larger brands absorbing smaller players, potentially reducing diversity and innovation.

However, technological advancements such as AI and biotechnologies, a growing emphasis on sustainability and ethical practices and consumer demand for personalization are expected to drive future innovation. Despite the current slowdown, the industry is likely to adapt, finding new ways to innovate and meet evolving consumer needs.

Carolina Reis Oliveira Co-Founder, OneSkin

In line with consumer fatigue, we’re seeing routines turn back away from a 10-step to a more refined ritual, driven by meaningful impact on the skin. Customers ultimately want products that deliver, and with the economic conditions, are searching for multi-benefit steps, though, as we’ve found, when the product solves a real pain point, they’re eager to invest and are ever more educated in what they want.

This trend of fewer launches is already something we embrace at OneSkin, and we lean on consumer insights to guide us on what to focus next. We only launch products that have an unmet skin need, where our core community expects us to bring something that they haven’t found yet in the market.

I think we’ll continue to see a refinement of offerings, where brands that have a massive assortment of products pull back. Discontinuations are likely in my opinion, and, in turn, a recognition that launching new products en masse would be unsettling to shifted consumer behavior.

Instead, I can see a future where reformulating core products is the best approach, consistently optimizing the offering on shelf rather than proliferating. A returned focus on key hero products instead of launching an adjacent one that wouldn't significantly impact the business and only bring more confusion to the customer.

With fewer products, the challenges becomes repurchase and retention, and in this scenario, a product needs to outperform in order to prevent the customer from looking for something new every three or six months.

The issue isn’t innovation, at least for us at OneSkin. We have this philosophy of keeping our line minimalist, and while we are still working to meet needs from our customers that we feel are yet to be met. we have the advantage of being laser-focused on one key problem—aging. As an emerging leader in the space, we’re not sitting on ample inventory of an abundance of SKUs. Yet, we envision launching versions 2.0 of our hero products in the future, just like Apple does with the iPhone.

An acknowledgment that research progresses and to never stay stagnant. So, rather than a decrease in innovation, we are always pushing the industry forward to offer the most advanced approach and effective products to market. For us, it’s to address skin aging but other brands may benefit too from niching down.

Evelyn Wang Founder, Silverist

I liken what’s happening in beauty right now to what’s happening in the film industry. There’s less capital available, making companies more risk-averse when it comes to decision-making around innovation. The challenge is that true product innovation, which looks forward rather than backward, can't always be justified by current data since data is inherently reflective of the past. This drives the industry to focus on fewer, bigger, better and hero SKU or hero franchise strategies, including product renovations.

While these strategies aren't inherently wrong, they tend to reinforce conventional wisdom, leading to conventional outcomes. This is the beauty industry's equivalent of Hollywood's reliance on franchise movies with endless sequels, betting on known IPs rather than taking risks on new, innovative indie films with different perspectives. The pendulum will shift back, as always, but it remains to be seen by how much.

Krupa Koestline Founder and Cosmetic Chemist, KKT Innovation Labs

While it may seem like R&D and product innovation have slowed, the reality is that product development timelines are longer and launches have been more calculated. Brands are taking more time to think through what they are launching.

With a more educated consumer base and an oversaturated market, there’s a greater need to be deliberate and innovative. Product development hasn’t decreased, but brands are more focused on creating meaningful innovations that will stand out.

In terms of innovation moving forward, I don’t believe it will continue to slide. As brands adapt to these extended timelines, we’ll likely see a resurgence of product development focused on sustainability, multifunctional products and ingredient transparency, areas that are increasingly important to consumers. These thoughtful innovations could spark the next wave of growth in beauty.

Vanessa Kuykendall Chief Engagement Officer, Market Defense

If product innovation is at an all-time low and consumer spending is down, this could be an opportunity to assess the value we are bringing to consumers: Do they really need something new, or do they need something that truly works?

The beauty industry has come a long way from when we, as executives and retailers, were directing consumers on where to shop and what to buy. The “trusted authority” has shifted from companies to influencers, and the customer journey is no longer a single path to purchase, but rather a combination of many smaller journeys that can take place across multiple channels.

Social media plays a significant role in discovery and awareness, and consumers have been inundated with information in recent years, making them more knowledgeable and engaged, but also more discerning and skeptical. The “deinfluencing” trend that emerged in 2023 is a direct response to the deluge of products that have become must-haves.

This trend may be impacting consumer spending, which has started to slow in recent months, and economists expect this to continue throughout the remainder of the year. Continuous product launches may not be what consumers truly need, and they may be starting to realize this.

There will always be ebbs and flows. It is how we pivot in lean times that positions us well for periods of prosperity. My team is guiding our clients through Amazon and Walmart content and storytelling refreshes driven by data that clarify their points of difference, features and benefits. Their ingredients and results may not have changed, but surely their audience has diversified, and they should look at all their IP with fresh eyes, even legacy products can feel new if they reach a new consumer.

We are aggressively protecting our clients from conquesting competitors, including direct-from-manufacturer brands not sold at Sephora or Ulta to ensure we’re reaching the engaged, branded customer. We’re focused on using our proprietary tech stack to provide real data on how consumers are searching and spending so we can continue to acquire new customers for existing products.

Lastly, we’re identifying emerging subcategories where new product innovation could align with customer interest. We want to help our clients meet the customer where they are today. And, perhaps, in a world where less truly is more, the slowing down of product innovation might be exactly what we need to focus on what really matters.

Andrea Buratovich Brand Consultant, Indigo Private Label

I don’t think the product launch drop will have a much of a negative impact on the beauty or personal care industry. Consumers are still excited about renovations, reformulations and line extensions. There are so many amazing brands coming out with exciting new things, even if they are not considered especially innovative, they are still perceived as fresh.

I think innovation may continue to slide going forward due to how heavily saturated the beauty industry has become. Nevertheless, the beauty industry doesn’t necessarily need to work to turn this around. It will turn around on its own as creative entrepreneurs paired with the right resources enter the market.

I don’t think it’s any harder now than it’s ever been to come out with something truly innovative. When we got started almost a decade ago, it was all about cosmetics. Now, we are doing more haircare, men’s products, all kinds of personal care and categories we never thought we’d be in. There is an abundance of opportunity in the personal care space. I think what the beauty industry needs to prioritize right now is sustainability over formula innovation.

Laura Lam-Phaure Founder and Cosmetic Chemist, Lam Phaure Beauty

2020 was undeniably a transformative year for nearly everyone globally. Its impact was felt across various aspects of life, including the beauty industry. The pandemic shifted our routines and behaviors, with a surge in interest for at-home beauty treatments and an explosion in social media engagement, particularly on TikTok.

As people spent more time at home, TikTok became a major platform for discovering and discussing beauty trends, leading some brands to thrive through viral content while others struggled to gain visibility.

As we exited from the pandemic and live in the aftermath, the world began to reconnect with offline experiences, and people started to prioritize financial caution. Many had faced job losses and depleting savings, leading to a shift in spending habits. Rather than experimenting with new products, consumers are now leaning towards proven solutions that offer reliability and value.

This shift has posed a challenge for established beauty brands, which often struggle to adapt quickly to ever-changing TikTok trends. Consequently, these brands may stick to launching tried-and-true products or extending existing lines rather than pursuing novel innovations.

The beauty industry's focus on trends versus true innovation is another key issue. While there are many groundbreaking products with innovative formulas and unique delivery systems, real innovation shouldn't be about following fleeting trends.

Instead, it should address genuine needs and solve problems. Trend-driven products might achieve momentary success but lack long-term growth potential. In contrast, problem-solving innovations foster stable consumer loyalty and can drive sustained brand growth, benefiting the industry as a whole.

JENNIFER RITTER

Founder, JSRANDCO Development Studio

The new product launch drop presents a vital opportunity to assess a brand’s growth strategy. While launching a new product is inherently exciting and a great way to infuse newness into a brand, it’s crucial to evaluate more than just the new product itself.

Brands are doing the right thing if they are reviewing product assortment, sell-through rates and the overall brand approach at retail. That’s essential for long-term success, not matter how small or larger the brand.

Given the current state of new launches, brands must continue to reconsider their entire business strategy to identify where to play and how to win. This means exploring marketing promotion opportunities and determining where newness is truly needed.

At JSRANDCO, we advocate for a holistic approach to product marketing/development that involves various departments. We believe in planning with a minimum 18-month calendar to ensure robust support for both current and new assortments. With tighter budgets, it's crucial that every launch is strategically supported and not just a one-off event. Our philosophy is "launch and leverage," not "launch and leave."

Brands that adopt a comprehensive business mindset and integrate their strategies will be the ones to thrive. In the short term, due to raw material demands and a crowded marketing place, we may still be in a slump.

However, long term, meaning past 2025, we are positive about an innovation upturn.  Knowing the constraints we are experiencing, now is the time to redefine what innovation means for both an individual brand and for the industry to grow at large. We’re witnessing a trend where new brands are revitalizing forgotten ingredients and concepts, breathing new life into what was once considered old-fashioned.

At JSRANDCO, we recognize the value in learning from history. This approach allows us to foster both incremental and transformative innovations. By understanding and reinterpreting past trends, we can drive meaningful advancements and create a dynamic future for our brands.

It is also important that suppliers push past the immediate demands and invest in greater research in how to process materials in new ways as well as creating new materials which can move the industry forward in a sustainable way.

Of course, we should work to correct this [product launch drop].  Fostering innovation at both the brand and industry levels is crucial. We should look beyond immediate consumer demands focused solely on sales. Instead, we should draw inspiration from a broader spectrum of categories and disciplines. This applies to suppliers as well as brands.

By leaving our online workspaces and going out in the work to exploring diverse fields, ranging from cultural sectors like live art and music to tangible areas such as technical engineering and tasting true gastronomy, we can uncover fresh insights and applications. It’s easy to become complacent, relying solely on consumer data to dictate what’s next. However, true innovation arises from blending data with creativity and intuition.

A balanced approach that integrates consumer data, technical research, cross-category inspiration, and intuitive insight creates a powerful formula for growth. We at JSRANDCO find this four-part equation is key to how the most successful small brands have scaled to become major players and continue to thrive.

Julie Pefferman Founder and Cosmetic Chemist, Cosmeta

Course correction on the insatiable drive for newness and consumer demand is bound to happen. I don't mind a good course correction for indie brands at all because this is the time a niche problem-solving hero SKU can take off. Larger brands will double down the fresh versions of the oldies but goodies while smaller less risk-adverse newbies could potentially show off by making good on their niche beauty claims.

I don't think innovation ever truly stops, but product launches do because demand can slow. However, I am a creative chemist always thinking about what is next, so I may be biased. Today, the word "innovation" is being used willy-nilly all over the place, and as consumer's budgets tighten, there need to be more compelling reasons to try something new.

I think we have been seeing a lot of micro-innovation where the tiniest new thing is used disproportionally by marketing to create beauty buzz. Today, in order to reach the threshold of worthiness of a product launch, brands will want to pull all the levers they can on innovation—formula, science, clinical efficacy, packaging, sustainability, uniqueness of story, etc., before they even consider adding SKUs.

Lately, the beauty industry as a whole has been consistently sacrificing innovation for quick product launches. I believe this is the time to be more thoughtful of a product in the marketplace and evolve innovation internally more than ever. Overall, this will give the illusion of no innovation in the marketplace when in fact I believe this short period will be followed by exciting innovations on a grander scale.

Lipika Hegde Product Innovation and Development Consultant, Vanity Country Club

Breakthrough innovations in the beauty industry require time, investment and significant resources, which can be challenging for emerging brands operating on tight budgets. In today’s competitive landscape, where maintaining brand visibility is crucial, many brands feel the need to launch new products frequently, whether through line or shade extensions or by tweaking existing products based on customer feedback.

While these products can help keep a brand relevant, they still require safety and stability testing, which demands time and financial resources. True innovation, involving novel ingredients or unique formats, may take two years or longer to develop, leading many brands to hesitate, fearing they might lose relevance while needing to keep revenue coming in.

To navigate this pressure, some independent brands innovate quietly in the background while bringing faster-to-market products to maintain their presence. Larger companies with more resources and established legacies can afford to focus on longer-term innovation.

Although innovation in the beauty sector has slowed, brands that effectively manage consumer expectations can find a balance between launching low-risk products to maintain visibility and dedicating time to develop breakthrough offerings that set them apart. I believe we are currently experiencing a slump as brands work on innovation behind the scenes, and we may see new disruptive products in the coming months.

Cynthia Sakai Founder and CEO, Evolvetogether

I don’t think [beauty and personal care launches] are dropping, but rather brands are inherently becoming more thoughtful and conscious in their launch process. That’s the way we have always approached it at Evolvetogether.

I'm not going to debut something new simply because the industry is saying we need to each month. We’re not “fast beauty” and therefore will only put products into the world that truly meet our high standards with effective formulas that work, beautiful design and uncompromising care for the planet.

I believe the impact is largely positive and will continue to trickle down to the consumer. It pushes brands to really listen to what their core customer base is looking for, allowing them to thoughtfully curate products with their brand mission in mind rather than looking to the latest fad or trend as the driving force of innovation.

For us, scaling as a business means constantly improving and providing more value as we grow. We’re always looking to innovate and create daily essentials better. We are empowered by the mindset of wanting to do all the hard work for our customers so they have a great, seamless experience with our products, from the minimal packaging design to the memories evoked through our fine fragrances. That, to me, is where true innovation shines.

Jeremy Triefenbach Founder and CFO, DFN Ventures and Crème Collective

There are a couple of trends driving the decline in innovation. First, the venture capital and private equity funding market for consumer brands has significantly declined over the past 24 months, with some estimates seeing overall funding down nearly 95% from its heights.

This reduction of funding into new brands has direct implications into the amount of funding brands have for product development, inventory for new product launches and marketing support related to new launches.

Second, a large amount of innovation in the past decade has been driven by the “clean beauty” movement. As most area of the beauty market have seen clean products launched in all key product categories, the next wave of innovation will be driven more by science, which is a much harder lift to achieve innovation in mass.

With anything, there are booms and busts.  We are coming off one of the greatest periods of brand and product innovation in beauty and personal care, and now the consumer is rethinking their purchasing behaviors.

Forerunner Ventures 2024 Consumer Trend Report had an interesting point: “Consumers have embraced the world at their fingertips — information, products, services, and experiences from across the globe. But Access has reached a stressful tipping point and, looking forward, consumers will be more discerning.”  This coincides with “underconsumption” movement on we’re hearing about from TikTok generation.

All of these factors are making it much harder for beauty and personal care brands to innovate, launch and scale. This is now leading to a reduction in the number of brands and products. That said, this is a very good process for those great brands with great products to gain market share.

Anushka Nadkarni Product Development and Innovation Lead, Bentley Labs

The foremost impact of the product launch drop has been the focus on existing products and reinventing them to deliver more relevant results. That also means ingredient innovation is on the rise since a major part of the reinvention is switching active ingredients for their enhanced versions.

There may be innovation drops that continue in specific categories or products, but innovation overall won’t continue to slide. It will grow in aspects like packaging, product positioning, ingredient story, sustainability, etc. These categories will continue to push the innovation envelope.

I don't necessarily see what’s happening as a problem, so I don't think we need to work toward turning it around. What we as an industry can do is evolve, diversifying product categories, enhancing existing product lines, focusing on ingredients and sustainability, and accentuating brand stories are ways to evolve.

Madhu Natarajan Owner and CEO, Merit Manufacturing

Big shifts in an industry always start with the customer. There are three key factors driving changes in customer behavior, and brands are adjusting their innovation strategies to align with these evolving demands.

Customers have felt the financial squeeze in recent years, becoming more cost-conscious, which has compounded the ongoing erosion of brand loyalty across industries.

Established markets like Amazon are maturing, while new platforms like TikTok are introducing emerging brands to consumers more rapidly. Viral brands, often created by first-time entrepreneurs, are launching new products and finding quick success on these platforms, causing a ripple effect throughout traditional distribution models.

Customers are also becoming more informed. Through social media, they’re learning about the beauty and personal care industry by following high-profile chemists and product developers on platforms like TikTok, Instagram and YouTube. This not only expands their product knowledge, but also broadens their expectations and demands from brands. They look at a product holistically now. It’s not just about the ingredient list, it’s about the packaging, the label, how it’s sealed, the product claims or even the sustainability of the void-fill when it’s shipped to them.

These major shifts in customer expectations are not leading brands to innovate less. They’re driving them to innovate differently. Innovation today isn’t just about launching new products or expanding into new categories. It now includes redesigning packaging to address growing sustainability concerns from both customers and retailers. It means customizing existing formulas to meet the specific needs of different customer demographics. Even improving supply chain efficiencies to offer better pricing without sacrificing quality or efficacy is product innovation that matters.

There’s also significant innovation happening among emerging brands on TikTok, where consumer behavior is creating opportunities for new voices and ideas to flourish.

As customers’ priorities have expanded, our understanding of innovation must evolve accordingly. Larger brands are observing these changes in the market and the success of emerging brands, and they’re turning to us for the agility they often struggle to achieve.

At Merit, we provide that agility by operating as an extension of a brand. Our innovation pipeline offers a concierge, turn-key approach, allowing us to bring in experts from procurement, vendor relations, formulation, marketing and sales to help craft the right solutions for a brand’s customers.

Where brands are hesitant to invest in traditional product formulation or line extensions, we work to subsidize these costs. We’ve invested in additional chemistry staff and created new training pipelines for formulation chemists because we believe that having skilled, informed chemists is crucial to success in this market.

As the market evolves, contract manufacturers like Merit must adapt as well. We’re prepared to shoulder some of the burden and risk alongside our customers—that’s what partnership looks like today.

We take a long-term view of our relationships with brands and innovation. We’re committed to testing new ideas and betting on people and concepts because we believe this approach is the right one to help brands thrive in today’s market.

Things won’t go back to how they were. Just as no one shops at Tower Records anymore, brands are no longer willing to spend years speculating on new product formulations. We need to listen to what customers are telling us and let that guide our innovation efforts. Brands and manufacturers must become smarter, faster and more strategic.

Ultimately, some leaders will be able to see where the puck is going, and some won’t.

Zoe Ehrlich Director of Product Development, Concept Laboratories

Implying that innovation is synonymous with the quantity of new item launches gives an incomplete picture. Innovation happens at every level, not just new item development. It can be innovative to reformat a product or even discontinue numerous items in an effort to establish a more minimalistic product offering.

Innovation is about creating something novel, but it is always contextual. So, if consumer spending drops and the only way to compete is to sell products at a lower price, then finding a way to execute PD at a reduced budget with limited resources in innovative. If long lead times are creating stagnation, then using tried and true commodity ingredients and lean formulations while maintaining a compelling marketing story is innovative.

Right now, the context we are innovating within is deeply affected by MOCRA, supply chain issues and an oversaturated market. It makes sense that there would be more of an emphasis on fine-tuning existing launches, decluttering SKU assortments and streamlining formulas for supply chain purposes. It makes sense that brands would launch fewer items but perhaps invest more in consumer and clinical testing.

To me, this does not suggest the absence of innovation, but rather an evolving creative landscape based on the current state of affairs. It could be that we actually see an increase in innovation because brands are investing more testing, time and effort in fewer items. Yes, there may be fewer items, but, in the long run, perhaps they will be higher quality, more original and more thoughtfully curated.

Dominique Gagnon President, Deinde

There is a distinction between innovation and new product launches. Too many discuss them as interchangeable. Not all new product launches are innovative, e.g., dupe, stock formula with a twist, packaging update.

Innovation in beauty requires breakthrough technology that delivers a product experience that is either category-creating or category-disruptive. It elevates the standards that future products in the category must deliver and, in the process, changes the face of consumer expectations and demand.

The wealth of stock formulas and new ingredients with trademarked names that belie their limited improvements to skin health performance at a clinical level have created a low bar to entry for new product launches. Combine that with a robust competitive market, lowering brand loyalty among consumers and major distribution players incentivizing large SKU portfolios, and there has been a ripe dynamic historically for SKU proliferation without a real product portfolio strategy, with prioritization of innovation.

I am actually heartened by the market data that has indicated a recent decline in new product releases in beauty as I think about the future of our industry. Those without innovation have created a lot of communication noise in the marketing landscape while delivering limited value to consumers and have encouraged the beauty industry to evolve closer to the fast fashion industry, with all of its waste, human rights and low quality issues.

I read the data as a significant market shift that will demand from brands more focus on and investment in true innovation and higher quality products, a positive shift for our industry. I believe brands that will survive with this shift will be those that alter their NPD resource model, replacing fast fad trend scouting with technology scouting, strategic R&D partnerships and investments in proprietary novel ingredient IP.

 At Deinde, we are focused on true innovation, launching a category-creating brand innovation (inflammaging management) with product innovations powered by novel and breakthrough technology (starting with our first patented biotech ingredient technology, Naringenin, that quenches inflammaging by 96% and is 15X more powerful than niacinamide).

Latest scientific studies have shown that inflammaging—chronic, low-level inflammation that accelerates aging—is at the core of a cascade effect that results in what we experience as signs of visible aging. We see inflammaging as the next big scientific breakthrough in the clinical skincare category since skin barrier repair and leverage our in-house AI-based ingredient screening and commercialization technology to deliver on innovative solutions for inflammaging.

With the force of the biotech industry entering beauty and other advances in science and technology e.g., AI, handheld technology, I see us at an exciting time for innovation in beauty, where the rate of innovative product releases will increase.

Dina Rosenbloom CEO, Hairstory

At Hairstory, we believe in fewer, better products. The category is crowded and sometimes brands are just launching to anniversary a number. We don't follow that rule. We have been ramping up our innovation with intent.

As pioneers in scalp care, with our star product New Wash dating back to 2015, we feel that the scalp care category in haircare is hot, and we plan to play hard in this category in the near and far future.

I feel that [the product launch drop] will allow indie brands such as Hairstory, to have a lane to compete. I also think that we have such a strong retention with New Wash that the potential drop in product launches in the category will allow us to have a stronger voice with a product that is tried and true.

I don't believe that innovation will continue to slide. There are some amazing labs out there that are playing in the sustainability and clean space, and I believe that brands will be forced to look at their assortments and begin to innovate to what the customer needs.

Tara Cohen Founder and CEO, Mixst

The beauty and personal care industry is currently facing a conservative approach to launching new innovations within brand portfolios. In my experience, this is largely due to limited resources, cash flow and support. Many startups and established brands are now focused on maximizing the potential of their existing products through storytelling and offering fresh perspectives rather than introducing new items.

There's a shift toward reanimating existing products for new consumer acquisition rather than launching multiple new products at once. The strategy of frequent releases is unsustainable in today’s competitive market. Maybe it works in fashion, but not in personal care at this moment in time.

For the brands I’m working with, we've adjusted to launching just one or two products a year. A significant hurdle is the lag on the vendor side. It’s become increasingly difficult to get timely submissions or customize formulas, and everything seems to come with a steep price tag.

Recently, I reviewed products for a new brand and found the offerings basic and uninspiring. The white-label and off-the-shelf development options feel outdated, while the rising cost of ingredients, especially natural ones, is further complicating the market. Consumers continue to demand new, natural ingredients, but balancing quality and affordability has become increasingly difficult.

We’re moving toward a less-is-more approach because the market feels oversaturated, leaving some brands with slow-moving inventory, which prevents the introduction of new products. There’s a growing emphasis on evaluating current offerings and buying only what’s truly necessary.

Innovation, however, seems poised to come from adjacent industries. I’m noticing a blending of ideas from different fields for inspiration. In my view, the startups are the ones driving newness, not the traditional brands, which are weighed down by infrastructure and layers that prevent them from moving quickly.

There will need to be incentives for innovation as influencers, brands and consumers hunger for fresh ideas to generate content and maintain interest. However, infrastructure, logistics and operations across the industry will need to adapt to support this demand for constant newness.

One solution could be to offer more customizable ready-made options with a menu of ingredient options similar to pizza or ice cream parlors, where brands could pick ingredients to add into base formula. This would allow for greater customization at a more efficient cost for both manufacturers and customers.

Designating an area for small-batch fills and package solutions in smaller quantities could also help, offering cost-effective production solutions while keeping inventory manageable. Additionally, bringing more packaging development back to the U.S. and warehousing could help reduce delays, especially if manufacturers could provide guaranteed timing and delivery, taking the overseas shipping out of the cost.

To foster newness, larger companies could consider collaborating with startups, using their manufacturing lines and development teams as resources. This business partnership could benefit both parties by providing startups with the tools to innovate while allowing established companies to tap into fresh ideas.

Cierra Sherwin Founder, First Production Beauty

With the rise of social media and TikTok virality, brands are seeing growth through viral moments more than customer loyalty and consistent repurchasing. This virality can be a double-edged sword for brands. Many can't catch the moment fast enough, and it can have a dramatic impact on inventory and demand planning.

It is worth mentioning that brands need constant newness to survive in retail. Brands are being more strategic about their launches and contemplating how to deliver more of what the customer loves, with less risk. This can take the form of franchise expansion, shade extensions and reformulations.

It has also become extremely expensive for brands to launch newness. Not only are there sunk costs on physical product, but marketing spend has exploded. Influencer events, pop ups/ experiential retail and thousands of gift boxes have become the norm. Many brands don't have the marketing budgets to support these initiatives more than a few times per year.

Mary Berry Founder and CEO, Cosmos Labs

The drop in product launches can have both immediate and long-term effects on the beauty and personal care industry. In the short term, it can make things feel a bit dull, with less excitement to keep consumers engaged. Brands rely on fresh products to keep people interested, and without that, shoppers might lose motivation to try new things or buy more. Over time, this can erode brand loyalty as customers look for alternatives that give them that excitement.

I do not think that innovation will continue to slide. Innovation is too crucial for brands to differentiate themselves in such a crowded market! While there has been a slowdown because of factors like market saturation and rising production costs, the need for fresh ideas remains strong. Consumers are always looking for the next big thing, and brands that fail to innovate risk losing their competitive edge.

The beauty industry definitely needs to focus on reversing the trend of declining innovation to keep consumers excited and ensure long-term growth. Innovation is crucial for staying competitive and maintaining consumer interest.

To turn things around, brands should invest more in research and development, exploring new ingredients, technologies and formulations to create products that offer unique benefits. Inclusivity is also key, with more focus on developing products that cater to a wider range of skin tones, hair types and beauty needs.

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