What do you think are the biggest challenges facing beauty brands right now?

I think trying to figure out what will resonate with their demographic and stand out in an endless sea of product releases. The number retailers and brands that are running sales in the last couple of years has drastically increased, which I’m not wholly surprised at due to the pandemic, but I also feel like we were seeing a lot of limited edition products get reduced to 50% off shortly after releasing in the year prior as well. I don’t know if it’s people losing interest, brands over-producing, or what… but merchandise wasn’t moving fast enough it seemed.

— Christine
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The biggest challenge is that consumers are harder to please now, especially with many makeup brands popping up almost everyday. However, I believe the international market is still open for more makeup brands to occupy and grow in. Unfortunately, international buyers and enthusiasts don’t get the same special sales, products, and PR like those in the American continent. That’s why makeup brands will be forever stuck trying to create unique products in a difficult market for them, which can backfire on them.

Generally: the past year-plus hasn’t been makeup-centric, at least for those of us keeping our cameras off in virtual meetings. I stopped buying a lot of stuff: dressy clothes, makeup, gasoline.

Limted Editions: Personally, I feel like the past several years had too many brands pulling a “Limited Release False Scarcity” trick. Maybe they wanted to boost their profiles or create a sales channel that sidesteps reviews and customer try-ons. They left me feeling “why bother” about limited edition products, and skeptical about the brands that leaned heavily on them. *cough*BITE*cough*

Then there’s the quality curve I’ve watched over and over again. Step 1: New/Relaunched Brands releases amazing thing to create a defining moment; Step 2: Spin amazing thing into good variations to establish brand value; Step 3: Use hype to release similar things of variable quality to monetize brand value; Step 4: Turn over process to bean-counters so that every release is an EBITDA quotient, while brand declines. The first thing I do is place any new release hype on that timeline.

It’s all left me more cynical overall about branding, trends and wish fulfillment shopping. The marketing static got stripped away at some point. Now, a product has to demonstrate value based on its own merits to me, because I’m just out of the energy to play games with this stuff. I don’t know if that applies to anyone else, but that’s where I’m at.

This is such an insightful post! I’ve had a really similar reaction to the false scarcity thing. I’m not an influencer, per se, but I am someone who has friends and followers who ask her for makeup suggestions. Because I’m not receiving brand PR, I don’t have a constant new supply of things to try and recommend. It’s really frustrating to, for instance, have a friend say “Oh I loved that lipstick you were wearing last week, and I think it would look good on me. Where can I get it?” and then I have to tell them it’s some limited-edition thing and try to help them find a dupe at a good price point. So I try to stick with things that are gonna stick around, so I can recommend them to people or buy them as gifts later in the year.

Thanks! That’s a good strategy.

I’m not an influencer either, just a regular non-influental person trying to control her budget, who’s worked around marketing too long. I never get to purchase LE stuff, because I like to consider everything before I purchase. By the time I decide, it’s sold out. The short availability windows preclude an rational process. I assume that’s the point: to make purchasing completely reactionary by eliminating any capacity for reason. Instead of pressuring me into quicker decisions, I’ve stopped altogether. (With only one exception, Christine’s palates.)

Lots of companies are entering new countries which is a huge challenge. Brands want the massive Chinese market, but it’s difficult to avoid compulsory animal testing or post-market animal testing there. More international makeup could reach African countries, too, once they get more access to reliable online payment providers. Even Europe is too different from America to jump straight in without reconsidering marketing and pricing.

While they probably can’t test individual products that much given the many releases, most brands use stock components and formulas which should have been thoroughly tested.
But I do agree that with so many releases, they most likely don’t care about shelf life or quality. They somehow assume and hope people will buy the next thing before noticing something wrong.

One challenge I think some brands are facing is trying to be all things to all people. Instead of finding a niche and doing their niche really well, they go chasing trends.

Two examples of brands that have recently disappointed me with their trend-chasing.

Bite Beauty (big surprise I know). Their niche was highly pigmented, comfortable-to-wear lipsticks in a wide range of colors, and their gimmick was that they were made with food-grade ingredients. They had a nice creamy satin-y finish in an era when almost everything was either matte or glitter with no in-betweens. They were popular and successful! Then they decided to chase the vegan and clean beauty trends, discontinued their popular line, and released very underwhelming products that had none of the elements that had made them stand out in the past.

Melt Cosmetics: Melt felt like they were poised to take over where Urban Decay and KVD had lost people. That sort of edgy alt-girl market (and people of all genders with similar tastes). Colorful eyeshadow palettes with irreverent names. No, I wasn’t too into all the weed-themed branding, but I liked their color stories and they were doing things other brands weren’t, like doing all-green palettes, or creating a beautiful Dia de los Muertos collection that drew on their own heritage rather than being culturally appropriative. But their last few releases have been very neutral and boring, and they’ve been plagued by uneven quality for the past few years, too.

I think there are at least two other factors at play here – the number of cosmetic brands has increased dramatically, and bricks and mortar establishments (at least here in NJ) are reaching oversaturation. Sephora is opening outlets in Kohl’s and free standing locations in shopping centers. In the super regional mall that in the past two years lost anchors Lord & Taylor and Nordstrom, there is a free standing Sephora and one inside the JCP. And a new one opened in a strip center (eight – ten miles away from the mall) and directly across the highway from an Ulta in another strip center.

Retail is cyclical; there was a time that department store cosmetic brands NEVER went on sale, then it was 1x per year, and it’s snowballed from there. I call it the “Macy’s effect.” It encourages more shoppers to wait for the sale, which encourages the retailer to mark items down sooner to make the same level of profit as in the past. And eventually brands unable to meet their debts will succumb, like Becca. Which is sad, because their undereye brightener is my HG.

I hate the Macy’s effect… Moving from Europe to US the constant cycle of sales was a cultural shock. And it’s not just makeup… it’s food as well, which was the biggest shock for me. Can’t you just sell the yogurt at an average price instead of putting it on sale for 20-30% off every 2 weeks?

And it’s even worse for Macy’s in general… the way they price some products (cookware, bedware, etc.) 20-50% more than other retailers, just to match the price when sales go on… Do they actually think people are so stupid?

You may have heard of the concept of “loss leaders.” (Now I’m really dating myself 🙂 ) Retailers would put something on sale to get people in the door, even though they may be losing $ on that particular item, overall volume makes up for it. That is basically how grocery stores work, at least in the good old USA.

Macy’s took this concept to the extreme. I personally hate it too, and they’ve dug a big hole that retailers are now unable to extract themselves from. JCP tried to do away with the whole sale concept and offer reasonable prices all the time, and people hated it. They are so indoctrinated to buying “on sale” that JCP had to scrap it.

There are so many…

One big challenge I see for some brands is finding their identity. In this consumerist world brands try to do it all, try to jump to latest trends, while satisfying everyone, so they lose personality and identity. It’s a very personal opinion, but I see nothing wrong with a brand choosing an identity and a demographic and sticking to cater best for it, instead of trying to be mediocre at everything. There are so many brands out there that all market segments will be eventually filled.

Another big challenge I hope brands will have to face is being truly sustainable. Not green washing, not putting fancy words on labels or description. I mean investing of reusable packaging, on centers to return packaging for recycling, on reducing waste in their factories, etc.

A big challenge brands face is that they don’t really know the customers. They get their feedback from influencers, which have a totally different lifestyle and perspective than regular users. They try to make products for catchy Instagram posts, for people who review makeup mainly for camera and first impression; they don’t think of the real woman going to work, taking care of family, puting on makeup in 10 minutes, wearing makeup 10-12 hours without a chance to retouch and using the same foundation or mascara everyday.
Lately I have seen brands trying to bump reviews by sending free products in advance through platforms like Influencer, but those people sometimes don’t give a true review because they receive the product; I’m not saying they are lying, just that they are naturally biased because they receive the product for free.
Brands seem to care about reviews only if they can use the system to their advantage, they don’t want to listen, they don’t want the 2 or 3 stars reviews that might give them hint on how to improve the product.
And because they don’t know the customer, they launch products the customer doesn’t want either because price, quality, functionality or aesthetics. They make products for the reviewers… and reviewers don’t actually make purchases in most cases to the brand. There are many products on Sephora that have been on sale 50% for 1-2 years now; nobody buys them even so. Regular consumers never wanted or needed those products, some were hyped in first impression videos when they launched, but simply fell through because there’s no market for them.

*Oversaturation of the market — tons of competition and dupes for products. Today’s knowledgeable consumers can get the best products for them at the best price, and don’t have to be brand loyal.

*Lack of diversity — There’s no excuse for big brands, and they will continue to be called out. In the post-COVID lockdowns economy, they’re going to have to at least monetarily value all potential customers regardless of skin tones, both here in the US and abroad.

*Lack of creativity and innovation — Everything looks the same. People new to makeup have no reason to be brand loyal until they learn more about quality and what works for them. Mamy more experienced makeup users are getting bored. A lot of us beauty junkies have been bored for years.

Sales. I definitely believe that sales are way down across the aisles, both high end and drugstore due to the pandemic. It just seems like we collectively have so many more important/impactful things on our minds and lists of things that are of greater importance than makeup at this particular moment. This is what I also believe is driving many cosmetics companies to be offering major sales for brands that hardly ever used to run such large cuts in prices before. Most of us are also wearing less makeup. Either less often or less in way of certain items, like standard lipsticks or glosses because those get messy underneath masks, which with the Delta variant rising, many will resort to willingly wearing them yet again.

1. The business model has changed. Print magazines have become much fewer. Before, that was the main ad campaign for new makeup launches. Those were expensive. Now it is online.
2. The influencers. I’m not someone who watches Instagram or whatever to see what is new. Plus listen to people who are probably paid to talk about X product. Do they just test it out or wear the product for several hours per day to see how it really holds up?
3. Glowing reviews on store websites as part of some promotion. Too many five star reviews are a turnoff.
4. Brands competing for a significantly smaller slice of the beauty industry pie. Too many brands – sure there is something for everyone but people have the same sized face. How many products can you release? Weekly launches? C’mon.
5. The false marketing promos. Creating a false demand to make a buck when the going is hot. The average person may not be interested. The customer will not come to the website and order if the product is gone in two minutes. It will be a turnoff for the brand.
6. The ever-increasing price creep. A couple of dollars increase every year is expected. With the pandemic and shortages and the increasing gas and shipping costs, some items have had a significant price increase in the last year or so.
7. The price gouge for ‘luxury’ products. There is the well-off customer who will snap up an outrageously priced item. It has some perceived value for them. Tell me why a lipstick is worth $100 or an eyeshadow palette is $170.
8. Sales and clearance. Back in the day, there weren’t any sales except maybe 10% off a couple of times a year. You had X amount of product per year. When stuff isn’t moving, it’s discounted or shows up at Marshall’s/Winners/TJ Maxx.
9. Absorbing the cost of returns to places like Sephora or having people cheat and scam the store. Buying a high end foundation, switching it with a lower end one and returning it.
10. The push to more inclusivity and offering more colour choices. The push to more sustainability and less plastic use/waste.
11. Marketing the product to an age appropriate customer. No, a man or woman who is 40 plus will not see the same results as the 22 year old model.

I know you mentioned that you don’t follow beauty YouTubers but I wanted to mention 2 who review the products honestly and in details. Tyler Wynn for foundations especially if you are really pale. Emily Noel, she has never did a sponsorship and her recommendations are solid.

Standing out from the mediocre. Everybody and their frickin’ mother has a cosmetics/skincare line now and they’re all releasing the same things.

I think there are a lot of brands seriously struggling at the moment – and not just due to the pandemic either.
For a start – the market is oversaturated with sub standard products and a number of brands (UD for one) are losing their mojo in coming up with something new and different that is of good quality.
Secondly, so many brands have d/c their best products, only to put out something really poor in its place – eg Bite Beauty’s lipsticks, some MAC legends etc.
Other brands have made some truly bad leadership decisions that have overwhelmed the consumer base with their endless, similar looking products (CP).
Understanding your customer base and putting out a few excellent quality products per season would be a better alternative.

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