Season 6, Post 43: Beauty and the ballot box
In case you weren’t aware, there’s quite an important election happening today. Sadly, many people – both in the States and elsewhere – won’t care, even if its outcome will impact them, albeit only indirectly. For the non-politically engaged, beauty perhaps may rank as a higher priority. As a way of diverting attention from worrying about who might next inhabit the White House, we spent some time recently reading “Beauty Industry Insights 2024: A Consumer Spending Pulse Check”, published by GXO Logistics. Our key findings follow.
Beauty is big business. The industry, globally, is expected to double in revenues over the next decade. By 2035, the market could be worth more than $750bn. It’s no surprise, then, that when respondents – in not only the US, but also the UK, Ireland, France and Germany – are polled, 66% of them say that beauty and related products were “essential” or “very important” to them. Politicians can only dream of such elevated approbation.
Just as the Presidential candidates care about trust and loyalty, so do consumers when it comes to buying their beauty products. A majority consider brand reputation and previous experience as important factors in their buying decisions, even if brand loyalty currently sits at just 38% important. In other words, there’s an untapped opportunity from brands to exploit. Not that your author can comment, but the survey also suggests that consumers are leaning towards more minimalistic and clean beauty items. 41% of those polled endorse the #nomakeup trend.
When asked how they would like their beauty products delivered, respondents were emphatic. 64% said they would rather wait for all items to be delivered in one package instead of separately, while 55% voted to wait longer for an environmentally friendly delivery option. We are sympathetic to this sustainability mindset, but there are also logistics implications. Warehouses, we have argued previously, are the unsung heroes of the modern world. They are integral to how modern supply chains work. The logistics infrastructureinside them also matters, ensuring that products – beauty and beyond – are delivered both efficiently and sustainably.
5 November 2024
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in GXO Logistics. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
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Alex Gunz, Fund Manager
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