Jessica Matlin, director of beauty at luxury fashion e-tailer Moda Operandi, forecasts retailers will be conservative with their beauty purchase orders in 2024.
After launching its beauty vertical with some 55 skincare, fragrance, makeup, haircare and body care brands in early 2023, Moda Operandi is reducing the number of new brands it’s bringing into its beauty assortment next year. “People are not really feeling like spending, so how much are they going to spend, and are they going to be using beauty as a treat product, but maybe pulling back on other things?” said Matlin, who co-hosts beauty podcast “Fat Mascara.”
Last week, she participated in Beauty Independent’s In Conversation webinar along with Nicole Clay, co-founder and CMO of Hue, a platform that assists beauty shoppers with finding the right products for them, and AJ Addae, cosmetic chemist and founder of Sula Labs, a personal care formulation company that specializes in products for dark skin. The three beauty insiders struck notes of caution as the industry heads into 2024, suggesting that both brands and retailers aren’t taking wild swings out of the gate next year, but instead depending on proven products and marketing strategies to secure their businesses.
Only beauty brands determined to be truly unique capture the attention of Moda Operandi now. Matlin highlighted facialist Iván Pol’s brand The Beauty Sandwich and makeup artist Violette Serrat’s brand Violette_FR as in that distinguished group. The professional authority of their founders and their significant social media followings set them apart, and they’ve become bestsellers at Moda Operandi this year. It doesn’t hurt that they were Moda Operandi exclusives.
Matlin previews that collaborations between Moda Operandi’s fashion and beauty brands are on deck for 2024. As an example of such a collaboration this year that moved the needle, she pointed to Proenza Schouler’s collaboration with Merit Beauty encompassing a reversible vegan leather makeup bag and five beauty products. It sold out during the two weeks it was exclusive to Moda Operandi’s website in September.
Single-product brands Fara Hamidi and Reome have been gaining sales momentum at Moda Operandi, and to the extent that the e-tailer will add new beauty brands, Matlin identified single-product brands as a strong theme. “It’s not so much about a line being a hot line, but having a status item,” she said. “We’re seeing lines that are one SKU get a buzz.”
The Beauty Buzz In 2023
Artificial intelligence, product claim substantiation and alternatives to legacy ingredients (think bakuchiol for retinol) were huge in 2023—and Addae and Clay don’t think they’re fading in 2024. Clay said, “AI isn’t going anywhere, and the beauty industry is just at the starting line when it comes to knowing and learning how to utilize this technology to add personalization to the shopping experience.”
Speaking of product testing, Addae said, “Evidence has been traditionally qualitative, but I think where brands are starting to move toward and seeking inspiration [is] more quantitative evidence. They really focused on making sure that they were showing the proof in the pudding.”
At Moda Operandi, Matlin noticed that customers gravitated to luxury beauty this year, but the demand for what she referred to as “super, super luxury” has lagged. “The definition of luxury and the definition of treating yourself is different depending on the person,” she said. “It’s wider, and people are looking for luxury at different price points. They’re aware that they can get skincare products that perform really well at different price points.”
To satisfy demand for affordable luxury skincare products, Matlin onboarded skincare brands that were under $200 and under $150. Although skincare is Moda Operandi’s largest and top-performing category, makeup items priced under $100 flew off its virtual shelves this year, with Hermes Beauty leading the charge. The fragrance category has been slower to build as Moda drills down on storytelling and sampling.
“I do believe that you can sell beautiful luxury fragrance online,” said Matlin. “If you can explain the story well online and then if you can sample it…There’s so many layers. So, as an online retailer, we have to start employing all of those layers.”
Managing customer acquisition costs was top of mind for Hue’s brand clients at the start of 2023. TikTok was a key strategy. Clay said, “When we started the year, there was a lot of optimism and excitement around TikTok and for brands of all sizes to use that platform to acquire new customers, which is great because there really hadn’t been a new platform for customer acquisition in quite some time.”
However, TikTok isn’t without challenges. Clay emphasized that the level of content production required to propel growth on the social media network is burdensome for brands, particularly small brands, and brands of various sizes often struggle with how best to deploy TikTok content across a range of sales channels.
Clay mentioned that luxury brands leaned into user-generated content this year. She explained, “Before there were tight reigns on the brand aesthetic, how they were presenting themselves, what content they put on social media. We saw an interest and willingness to generate some user-generated content to put on their channels.”
Dream Product Launches For 2024
During the webinar, Addae, Clay and Matlin were asked what their dream product launch for 2024 would be if they were a brand founder. Here’s what they conjured up:
Addae: “An alpha-hydroxy/beta-hydroxy sort of cream or lotion that’s very exfoliant for your feet. I would launch it at a price point of maybe $20 so that folks across all categories could buy it and put it in mass markets to sit next to the CeraVe’s of the world. I would definitely say it would be targeted for folks that are skin intellectuals and that understand the value in using these ‘skinification’ sort of ingredients in other areas of their body. It’s an easy buy for them.”
Clay: “I would love to see a brand come in and disrupt the legacy Dove, Nivea or Vaselines of the world to become that household core body care brand. I don’t see anyone right now playing in that space.”
Matlin: “There’s just so many of the same kind of very minimal, clean five-SKU skincare range with a short name. If I were to do a new one or if I want to bring on a new one, I want to see a little surprise.”
