Professional Documents
Culture Documents
Democratising Personalisation in Health and Beauty
Democratising Personalisation in Health and Beauty
Beauty
July 2021
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© Euromonitor International 2021. All rights reserved.
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Introduction
Examining Democratising Personalisation in Health and Beauty
Meeting Consumer Needs
Conclusion
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Introduction
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INTRODUCTION 5
Scope
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INTRODUCTION 6
Key findings
After years as a niche premium product, personalised health and beauty is closer
Personalisation in health and beauty is than ever to extending its offer towards the mass marketplace by taking advantage
on the cusp of mainstream interest of iterative improvements to technology and wider consumer willingness to engage
with such products.
This broader consumer movement towards interest in personalisation derives from
COVID-19 demands are pushing the demands brought about by COVID-19, especially around the centralising focus
broader interest in personalisation on health outcomes, lifestyles and nutrition. In this way, the COVID-19 era has
provided the foundation for a more mainstream version of personalisation.
Transparency and suitability offer Mass-orientated products are deepening segmentations by age, gender,
consumers varied entry points to race/ethnicity and hair and skin types, and personalisation only deepens the range
personalisation of possibilities, with ample opportunities to attract consumers across a range of
traits and ethical considerations.
As personalisation moves closer to the mainstream, greater distance will be placed
Segmented offerings will stretch across the spectrum of these products, with basic segmentation and simple
personalisation from mass to premium diagnostics available to most, with more innovative and sophisticated
personalisation approaches such as biologics/genetics in the premium offer.
Acquisitions and investments in Recent acquisitions by companies like Bayer and Nestlé and investments by
personalisation push movement to companies like Beiersdorf, L’Oréal and Sanofi allow personalised products to sit
massification closer to mass-orientated portfolios and provide them with greater access to the
scale, marketing and R&D that will likely sustain a wider audience moving forward.
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INTRODUCTION 7
2021 growth in beauty and personal care/consumer health expected; personalisation looming
The COVID-19 pandemic has made its mark on beauty and personal
Retail Sales Growth, Beauty and Personal Care and
care and consumer health in drastically different ways. The beauty
Consumer Health, 2018-2025, Baseline and
marketplace was battered in 2020 by macroeconomic uncertainty,
Optimistic Scenarios
social distancing and home seclusion, and the resulting cutback in
5
beauty and self-care regimens. For consumer health, aggregate growth
4 in 2020 was consistent with growth across the review period, although
3 COVID-19 scrambled the categories that performed well, with those
2
promoting prevention, immunity, active nutrition and wellness
Y-on-y growth %
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EXAMINING DEMOCRATISING PERSONALISATION IN HEALTH AND BEAUTY 9
Only in the review period did the interest in personalised I only buy from companies and brands
approaches penetrate into the marketplace for health and beauty. that I trust completely
There are supply- and demand-side factors for this evolution. On I want products and services that are
the supply-side, improvements in technology and data collection in uniquely tailored to me
the form of wearables, monitors and artificial intelligence and
I like to be distinct from others
digital learning-based tools have offered consumers more data
about their body, health and lifestyles, and at the same time, more I want to engage with brands to
concrete solutions to address concerns that arise from this influence product innovation
information. In addition, enterprising companies in health and I prefer branded goods to non-branded
beauty have iterated their approaches for personalised products, alternatives
allowing prices to come down enough for these products not to
serve only the most niche luxury consumers. These dynamics open I like to be actively engaged with brands
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EXAMINING DEMOCRATISING PERSONALISATION IN HEALTH AND BEAUTY 12
Access to data
Personalisation is downstream from data. The proliferation of sources of
data in recent years, from health trackers to diagnostic tests to artificial Attitudes Towards Technology, % Respondents
intelligence-driven skin care analysis, have allowed for innovations in Comfortable with Health Tech Options, 2020/2021
personalisation. Health and beauty products designed for a unique user
Use an online or app-based health
require detailed information on their demographics, behaviours, goals service to book a face-to-face…
and diet, among other indicators, and newer tools access these data in a
more frictionless and integrated way than previously possible. Use a fitness/personal training app
Increasingly, understanding these factors is just table stakes in designing
Personalised nutrition
a credible personalised tool in these industries. recommendations
The pace of innovation in personalisation is being met by a more Receive medical advice online or via
accepting public, especially in the wake of COVID-19 and the focus on app
health outcomes. Euromonitor’s 2021 Health and Nutrition Survey saw a DNA testing or other technology to get
jump in respondents’ comfort in a suite of technology-based services bespoke health and fitness products
around health, including using health-based apps, engaging with Consult with a therapist online or via
personalised nutrition recommendations, and even integrating genomic app
testing or similar technologies (like microbiome mapping) to inform
Use the internet to self-diagnose
bespoke health and fitness products.
Although these demands are still outside the mainstream, they have 0 10 20 30 40 50 60 70
gained steam since the onset of COVID-19, as many consumers see the % global respondents
benefit of services designed to be efficacious and tailored, with the goal 2021 2020
to keep them fit, healthy and vibrant for longer. Source: Euromonitor International Health and Nutrition Survey 2021, n=21,740
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EXAMINING DEMOCRATISING PERSONALISATION IN HEALTH AND BEAUTY 13
% of respondents
biology. This is tied to the concept of biocompatibility, whereby
formulators are more able to cut out unnecessary ingredients, 15
provide efficacious and safe solutions, and thereby at once build
products which are both simplified and suitable.
10
The rising demand for transparency and suitability allows consumers
various entry points into personalised products, with mass-orientated
5
custom products already veering into offerings segmented by age,
gender, race/ethnicity and hair and skin type. Truly personalised
offerings deepen that perspective, with more opportunities to engage 0
with individual consumers across a range of traits, thereby building Suited to or positioned Suited to or positioned Suited to or positioned
for my hair/skin type for my gender for my race/ethnicity
trust. These concepts of transparency and suitability run hand-in-
hand, with transparent methods and sourcing underscoring the Skin Care Hair Care Colour Cosmetics
unique benefits and efficaciousness of personalised approaches. Source: Euromonitor International’s Beauty Survey 2020, n=19,563
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EXAMINING DEMOCRATISING PERSONALISATION IN HEALTH AND BEAUTY 14
Spectrum of solutions
Personalised offerings in health and beauty are quickly massifying, both
through economies of scale and through segmented solutions that vary
dramatically in approach, aims and ambition. Mass-orientated consumers
Mass Simple
now have segmented offerings across vitamins and dietary supplements, segmentation diagnostics
hair care, skin care and colour cosmetics, with older industry standards
based on general formulations increasingly irrelevant in a diversifying
world. At this point, basic segmentation by demographics is a middle-of-
the-road expectation for consumers of mass brands.
That said, democratised personalisation extends deeper from these basic
segmentation approaches, as the costs of more advanced diagnostics, Dispensers/ Custom
consultations and custom formulations begin to drop.
mixes formulations
Lower prices in this space are likely due to greater investment from mass-
orientated companies which have recently entered personalised health
and beauty, with Bayer, Nestlé and L’Oréal early adopters or investors in
personalised solutions. As a result, the price range of potential options in
personalisation stands to increase considerably over the near-term.
Economies of scale are most likely to come from matching simple
diagnostics with a standard menu of personalised solutions (e.g., 3D printing/ Biologics/
personalised pill packs with a set amount of ingredients), which will
benefit from network effects that produce actionable, quality data once
small batch genetics
more consumers engage with these brands.
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EXAMINING DEMOCRATISING PERSONALISATION IN HEALTH AND BEAUTY 15
personalised approaches include other service elements to provide further Use an app to help coach/manage activities, exercise, etc.
customer support and improve the possibility of successful outcomes. Natural or traditional solutions
Work with a fitness coach/trainer
As a result, more personalised offerings are incorporating virtual
consultations/recommendations with professionals, whether in the form Use a device to monitor my condition
of a beauty coach, a nutritionist, a fitness trainer or an AI-led support tool. Rest/avoid activity
Some companies, like Shiseido, are merging personalisation into their Use a device to manage my condition
store design through digital advice and assistance to curate and enliven the Use cannabis
consumer’s retail experience. Some smaller services, like Vous Vitamins, Alternative medicine/therapies
are partnering with health insurance and telehealth operators to integrate See a therapist/counselor
their products into the broader wellness experience of their users.
See a doctor/healthcare provider
These solutions are currently viewed as value-added to existing premium Take over-the-counter medicine
offerings to support higher per-unit product prices and differentiate from Take prescription/Rx medicine
competitors. However, these offerings will likely succumb to the pressures
0 20 40 60 80
that will likely result in lower prices in personalisation, again with
% global respondents
economies of scale and network effects allowing for broader access to
these services, especially through AI- and data-generated offerings. Source: Euromonitor International Health and Nutrition Survey 2021, n=14,173
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EXAMINING DEMOCRATISING PERSONALISATION IN HEALTH AND BEAUTY 16
% global respondents
60
% global respondents
60 30
50
40 40 20
30 10
20 20
10 0 0
0 Colour Skin Care Hair Care Colour Skin Care Hair Care
Baby Generation X Millennials Generation Z
Personalised Personalised Personalised Cosmetics Cosmetics
Boomers
consultation products based products based
services on detailed on DNA testing Have used in the past Ingredient transparency
Sustainably sourced
hair/skin Have not used in the past, but would use in the future ingredients
diagnosis Source: Euromonitor International Health and Nutrition 2018 2019 2020
Source: Euromonitor International Beauty Survey 2020, Survey 2021, n=20,166 Source: Euromonitor International Beauty Survey 2020, n=19,563
n=16,418
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Meeting Consumer Needs
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MEETING CONSUMER NEEDS 18
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MEETING CONSUMER NEEDS 19
40% of beauty consumers associate proven efficacy/benefits with premium beauty products, as per the 2020 Voice of the Consumer: Beauty Survey
Source: https://www.ownskincare.eu/
In early 2021, Beiersdorf, the second-largest skin care company in Europe, launched the Our take:
personalised brand O.W.N in selected European markets. The brand’s name refers to Personalisation in health and beauty will
“Only What’s Needed”, as the brand offers specific formulations to address individualised become more sophisticated (and more cost-
skin care needs. The brand intends to provide such personalised support in part through efficient) through more robust data collection.
data collected from a study of 10,000 Asian and European women who measured several O.W.N has leapfrogged this issue by
skin parameters daily, resulting in over 2.5 million skin measurements, and growing. By administering its own studies, and the
fusing this data with the company’s artificial intelligence-led algorithms, Beiersdorf resulting network effects allow for both
promotes the ability to build 380,000 unique formula combinations tailored directly to narrower, more individualised solutions and
consumers’ skin attributes, with the consumer required to fill out a simple skin test to likely cheaper offerings in the long-run.
orient the algorithms.
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MEETING CONSUMER NEEDS 20
65% of consumers are worried about climate change and 46% use sustainable packaging, as per Euromonitor’s 2021 Voice of the Consumer: Lifestyles Survey
Source: https://www.livvit.com/
Livvit is Sanofi’s personalised supplement option for the Australian market, launched in Our take:
March 2021. Like other personalised pill packs, Livvit provides questionnaires on health As with Vedix’s success in integrating
goals and behaviours and builds daily multivitamins based on the responses. What is Ayurvedic concepts, Livvit’s emphasis on
unique about Livvit’s offer is its commitment to sustainability, with all its products sustainability is an important signal that it
packaged in at least 80% reusable, recyclable or compostable packaging, and with a identifies with consumers’ principles and
commitment for all Livvit products to come in such packaging by 2023. The brand also beliefs. It also demonstrates that sustainability
commits to be 100% carbon offset by 2023 and be certified as a 100% carbon neutral is a key differentiator in personalisation, where
business by 2025. These goals are in line with Sanofi’s broader commitment to consumers are more likely to stick with a
sustainability goals, with recycling efforts across many of the company’s OTC and personal company that meets their ethics rather than
care lines in selected markets. one that just sells them a product.
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MEETING CONSUMER NEEDS 23
Acquisitions to create scale and appeal to mass audiences: Persona and Care/Of
Scale is the largest impediment to lower prices and mainstream adoption
of personalised health and beauty offerings, with many players in this
space including detailed diagnostics and/or sophisticated technologies
that necessitate extremely high per-unit prices. Some of the leaders in this
nascent industry, though, have been acquired by industry stalwarts with
an eye towards the broader mass marketplace. In particular, Nestlé Health
Science acquired one of the best-known pill pack companies in the US,
Persona, in August 2019, while Bayer purchased a majority stake in
another US pill pack leader, Care/Of, in November 2020. Underlying both
acquisitions is the expectation that the new owners can build from
existing customer experiences with these brands and develop the scale to
extend the proposition to mainstream consumers through access to
greater marketing and R&D. It helps that both brands have
survey/questionnaire-based methodologies that are simpler and less
input-heavy than products based on biologics/genetics or advanced AIs.
Our take:
Increased investment in personalisation in recent years signifies that
global leaders in these areas are betting heavily on expanding interest in
more customised approaches to health and beauty. As technologies and
Mergers & acquisitions in consumer health involved brands with sales of
USD2.5 billion in 2020 manufacturing processes for these products improve, the higher the
Source: https://www.personanutrition.com/; https://takecareof.com/ likelihood that they attract a broader base of consumers moving forwards.
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Conclusion
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CONCLUSION 26
54%
OF MILLENNIALS AND GENERATION Z WANT
PRODUCTS AND SERVICES UNIQUELY TAILORED
TO THEM
46%
OF GLOBAL CONSUMERS TAKE A VITAMIN OR
SUPPLEMENT AT LEAST WEEKLY
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CONCLUSION 27
Challenges to overcome
Scale is inherently difficult in the marketplace for personalisation but the industry will
have to evolve away from the truly bespoke to capture consumers’ attention
Bets are being made that consumers will support some of the more aggressive designs,
when customers have yet to warm up to simpler forms of personalisation
Differentiation from competitors is tricky, but simplicity and transparency are the best
options for engaging with consumers new to the concept
For consumers to engage with personalisation at a mass level, companies must develop
strong outreach and marketing to explain how the process works and why it is beneficial
More rigorous regulations may risk the opportunity to scale, especially if companies are
restricted in the consumer data they can use to develop formulations
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CONCLUSION 29
Personalisation remains for the moment a niche premium offering in health and beauty,
Get in front of the mainstreaming of but the movement to democratise this industry is afoot, especially as many processes
personalisation (e.g., surveys and questionnaires) will see lower costs with more consumer engagement.
Companies caught flat-footed when that happens will falter.
In a wider-open marketplace with lower prices, competitive advantage will stem from
Give the consumer a reason to choose consumers understanding and believing a company’s value proposition, whether through
you more credible analytics, more transparent methods, or more sustainable operations. To
succeed, companies will need to develop a unique angle unmet by competitors.
There will remain a healthy marketplace for purely premium personalised offerings, but
Perceptions of premium will have to consumers will become more sophisticated in supporting such products in the future.
be earned Methods will have to further innovations in biologics and genetics while at the same time
demonstrate efficacy and results. We’re reaching the “prove it” stage of personalisation.
Matthew Oster
Head of Consumer Health
Matthew.Oster@Euromonitor.com
Linkedin.com/in/matthew-oster
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