India’s Beauty and Personal Care (BPC) market is the 8th largest in the world, with a total value of $15 billion, as per Euromonitor International. With an annual growth rate of nearly 10 percent, the industry is expected to double in size by 2030. Skincare and cosmetics are currently the key growth drivers in the segment, which explains the rise of organic, vegan, homegrown skincare, and beauty brands. The shift towards e-commerce and direct-to-consumer (DTC) brands is another significant factor that will impact this growth. And, the BPC market is no longer focused on the big cities - the love for beauty and skincare is growing among consumers in tier II and tier III cities.

In this era, when Indian consumers are deeply invested in personal care and beauty, product innovation is the key. It is important to analyze your target audience and keep up with the trends in consumer behavior. Why is it important? According to a McKinsey survey, 25 percent of total revenue profits come from the launch of new products. New or improved services certainly add to consumer engagement and profits consistently.

Brands can approach product innovation in three significant ways. The first is straightforward: come up with new products that solve consumer needs or create new demand for them. Secondly, constantly improve existing core products that consumers already love and make incremental innovations in them - for instance, add a new feature to the product, make it more inclusive or accessible. And finally, take your products to new channels or markets. It’s important to focus on all three aspects of product innovation to achieve holistic, sustainable growth.

New Trends and Products

In the BPC market, trends keep emerging and shifting. Vegan, organic, homegrown, inclusive, and ‘clean’ skincare and beauty are currently trending. As per a Nielsen report, natural beauty and personal care are 40 percent of the total BPC market, with a growth rate of 1.5x. Due to increased global awareness, Indian consumers are more conscious than ever before. They seek products that are qualitative and meaningful. Developing new products that cater to such specific needs of consumers is one way to lead product innovation. However, idea management is crucial before developing a new product because only one out of seven new product ideas is likely to be viable and work out.

The ability to test, learn and implement ideas efficiently is what drives successful idea management. Brands must collect, manage and develop a lot of different ideas before narrowing down on one. The more ideas you’re able to test, the more you learn. Then, it makes sense to evaluate and prioritize. Weigh the strengths and weaknesses, the pros and cons. Involve all levels of the organization that you need to develop a product. This helps you understand timelines and take a cumulative approach toward product innovation.

Omnichannel Approach

India's internet population is 700 million and is estimated to hit the 900 million mark by 2025. As a result, the D2C sector is expected to cross $100 billion. While Covid-19 accelerated online reliance, we are witnessing a strong pickup in offline sales, ever since restrictions were lifted. Hence, brands that are able to operate successfully offline along with a strong online presence, are strongly positioned to achieve success.

The Tools

Old methods such as feedback forms and suggestion boxes aren't necessarily the best ones to manage the ideation process. There are many more active options now available, which include online search trends, social media analytics, marketplace reviews, surveys, and influencer trends In this context, new technology helps direct the process and encourages people to participate more actively. So, it makes sense for brands to invest in technology. The right tools are flexible, process-driven, and support multiple different processes at once. It’s the execution that matters; the right tools help make the idea management process more efficient and effective but no tool automatically makes you more innovative.

Engagement

Gather insights from your organization and customers but don’t be limited by them. You’ll be surprised by the number of ideas you’ll get outside the organization. To make your products and services truly innovative, it’s important to engage the right people at each stage of the process. Besides the end-users of the product, look for people who are genuinely interested in the topic or who have experience with the subject.

Ultimately, it is important to balance out all the factors that aid product innovation. In the beauty and personal care sector, the more personalized, meaningful, and effective products and services you offer, the better. With the modern consumer becoming more and more conscious about what they put on their skin, it is imperative for brands to create and innovate, and put across the brand story well.