Innovation, customisation and sustainability are the challenges for beauty retail

Again, the increasing focus on sustainability is influencing every aspect of beauty, from packaging to production processes. Retailers are focusing on: recyclable and reusable materials such as glass and bio-based plastics; natural and cruelty-free products in response to the demand of more conscious consumers; smart packaging: with digital labels offering in-depth product information, traceability and brand stories.

The president of Cosmetica Italia, Benedetto Lavino, explains that the Italian cosmetics market is characterised by two trends: e-commerce and eco-sustainability. Eco-sustainable products are the fastest growing and in eco-sustainability itself there has to be innovation. People, especially Gen Z and Millennials, want to buy products that are good for the planet.

Particularly attentive to the raw materials used for its products is Mulac, a company founded in 2014 by Cindy Sold and Andrea Lodigiani, co-founder and chief marketing officer. With her videos, Cindy has reached millions of views, always pursuing her philosophy of creating a cosmetics company that knows how to bring together the high quality of raw materials with the high demands of make-up professionals. All of Mulac's products are vegan and most of its skincare and hairlab products have a percentage of more than 90% ingredients of natural origin.

Despite the rise of e-commerce, physical shops remain fundamental in the beauty segment, but with a renewed role: beauty bars and experiential spaces for testing products in a relaxed and personalised environment; digital signage with intelligent mirrors and interactive screens that amplify customer interaction; community hubs, meeting places for exclusive events and workshops.

Artificial intelligence is also transforming the back-end of the industry: from predictive analytics to anticipate consumer trends and behaviour, to optimised warehouse management enabling more efficient logistics and reduced waste; to personalised marketing with tailor-made campaigns based on data collected in real time.

Marco Di Dio Roccazzella, shareholder and general manager of Jakala - an international digital transformation company focused on data, artificial intelligence (AI) and experiences - emphasises the importance of using AI to increase and optimise sales. Thanks to AI, it is possible to geo-localise a company's target audience in great detail. In this regard, Jakala has calculated that in many companies, 30 per cent of the money is used incorrectly precisely because there is not yet complete knowledge of how to use the technology to its advantage. Furthermore, when used correctly, AI creates targeted and personalised communication for consumers who will recognise themselves in that product and that company and return to shop.

The beauty retail sector confirms itself as one of the most dynamic and innovative areas, capable of embracing the challenges and opportunities offered by technology and new consumption models. "In the space of 20 years, the value of the Italian cosmetics industry's cosmetic exports has quadrupled fourfold; exports that have more than doubled their weight on the sector's total turnover, from 23% in 2004 to an estimated 48% in 2024," says Lavino. "Looking at the next four years, estimates of average annual growth in the global cosmetics market are 6%. The beauty industry is growing on several parameters, especially in the luxury and prestige categories".

Lavino also talks about the many challenges to be faced in the next three years: drivers of Made in Italy, internationalisation and the essentiality of cosmetics. Hence, Italian beauty companies must export Italian know-how beyond national borders, they must have a global and multidisciplinary approach, and they must have competitive leverage to redefine paradigms in international markets.