How to Conduct Skincare Market Research

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Imagine this: You’ve just launched your dream skincare line. After countless hours perfecting your formulas, designing beautiful packaging, and launching your eCommerce site, you’re thrilled to finally unveil your products. But the weeks drag on, and sales stay frustratingly stagnant. You’re left scratching your head, wondering, “Where did I go wrong?”

The likely culprit? Lack of skincare market research.

When introducing a new skincare brand, extensive consumer and market analysis is mandatory. With the global skincare industry topping $145 billion, standing out is enormously challenging. Simply concocting products you personally enjoy won’t cut it – you must develop products that effectively resonate with a clearly defined target demographic to have any shot at sustainable growth.

Follow this comprehensive step-by-step guide to uncover exactly who you should be targeting, what they want, and how to compelling deliver it across each touchpoint. While thorough skincare market research takes an investment on the front end, the long-term rewards in fueling sustainable marketplace success are truly invaluable. 

Now, let’s get started!

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Step-by-Step Guide

how-to-conduct-skincare-market-research-identify-target-audience

. Identify Your Target Audience

First, explicitly determine who your target audience is — their demographics, psychographics, needs, values, and more. Get extraordinarily specific about who you want to sell to. This will steer all subsequent research efforts.

To elaborate, understanding your audience’s demographics could include factors like age, gender, income, education level, and occupation. Psychographics, on the other hand, probe deeper into personality, perspectives, hobbies, lifestyle choices, and behaviors. These insights will unveil their needs and values, which can profoundly sway purchasing decisions.

This vital initial step forms the bedrock of your skincare market research, guiding your approach and focus through the entire process.

Related: How To Create User Personas for Skincare

Expert Tip
Harpal Singh

Build 2-3 comprehensive buyer personas with details like name, age, location, skin type, income, principles, lifestyle, and social media platforms used.

Take skincare brand The Ordinary. They pinpointed their target audience as informed skincare aficionados who craved high-quality, proven ingredients but balked at the excessive price tags of most offerings. Further research showed this group cared more about active ingredients vs. flashy packaging or marketing. In response, The Ordinary developed straight-forward products spotlighting high concentrations of active ingredients, transparent labeling, and reasonable prices. They stripped unnecessary packaging and marketing costs and instead delivered efficacy-focused skincare at affordable price points. This tactic resonated with their consumers, igniting immense growth.

how-to-conduct-skincare-market-research-analyze-competitive-landscape

. Analyze The Competitive Landscape

Study the major players in your skincare niche, analyzing their products, pricing, messaging, reviews, and more. Detect holes or differentiation opportunities.

This requires scrutinizing product portfolios, grasping unique selling propositions, and dissecting pricing approaches. Examine how competitors communicate with customers — is their messaging clear, compelling and consistent? What are real customers saying in candid reviews? Identify frequent compliments and complaints to learn from.

Finally, pinpoint where competitors fall short or where you could provide something fresh. This could be anything from a novel product formulation to a greener packaging solution.

Expert Tip
Harpal Singh

Leverage platforms like Reddit or BrandTotal to unearth authentic customer feedback less likely visible on official brand sites.

For example, ACME skincare (not a real brand) used social listening to monitor competitors’ online presence. By analyzing candid customer commentary and social media chatter, they discovered widespread frustration regarding sustainable packaging options. ACME introduced biodegradable packaging to stand out from rivals and appeal to eco-conscious consumers.

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. Conduct Secondary Market Research

Secondary skincare research utilizes existing data sources. These resources offer troves of intel on industry trends, market size, growth forecasts, consumer behaviors and preferences. Useful channels include:

  • Industry Reports: Provide comprehensive market overviews including developments, future projections, and key players. Purchase through market research firms or business intelligence platforms.
  • Academic Journals: Publications related to dermatology, cosmetology, and consumer behavior can share invaluable scientific and consumer insights.
  • News Articles: Pieces from reputable outlets provide up-to-the-minute industry updates.
  • Government & Trade Associations: Offer data on regulations, import/export stats, and niche information.
  • Company Websites & Annual Reports: Share performance, strategic direction, and product landscape info.
  • Social Media & Forums: Supply opinions, preferences, and trend data.
  • Market Databases: Robust data on market size, consumer behaviors, and trends via sources like Statista, Nielsen, and Euromonitor.

Analyzing these channels reveals resonant ingredients, attributes, and claims. This intelligence can tremendously inform product innovation and positioning. Essentially, secondary research expands your understanding of the greater skincare ecosystem, empowering informed decisions to drive success.

Expert Tip
Harpal Singh

Look beyond surface-level trends to identify emerging hero ingredients (like bakuchiol), and unmet consumer needs.

how-to-create-user-personas-for-skincare-gather-customer-data

. Perform Primary Market Research

While secondary research is invaluable, primary marketing research is crucial for truly grasping your audience’s needs, preferences and behaviors. This hands-on data gathering yields pivotal insights to guide your product lineup, pricing architecture, and messaging. Useful tactics include:

Surveys

Cost-effective for accumulating data from many respondents via online polls, phone interviews, or in-person questionnaires. This can unveil skincare routines, favorite products, purchase drivers, and market gaps. Sample questions:

  • What is your daily skincare ritual?
  • Which products do you use regularly?
  • What factors determine your skincare purchases?
  • Are any products missing from the current market?

Interviews 

Enable deeper dives into individual experiences and opinions via in-person, phone or video conversations. More time intensive than surveys but with added detail. Example questions:

  • Walk me through your daily skincare routine.
  • How do you select new skincare products?
  • What do you like or dislike about current items?

Focus Groups

Moderate discussions with 7-10 consumers. Interactive format sparks fresh perspectives. Explore brand sentiment, terminology distinctions, and topics like:

  • Thoughts on natural or organic skincare?
  • How do you feel about current skincare pricing?
  • What would make you switch brands?

The key is listening. Open-ended questions and encouraging sharing unveil precise needs and preferences.

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. Define Your Product Lineup

Now it’s time to decide on specific offerings, ingredients, pricing, packaging, claims and more based on steps 1-4. Ensure alignment with target consumer needs and preferences. This shapes your brand identity.

Innovation is mandatory – introduce novel ingredients and fresh improvements consistently. Consumer feedback here is invaluable, directly showing what people need and want then incorporating this into development.

Consider hero ingredients you’ll spotlight – natural? Organic? Scientifically-proven? Sustainability is also increasingly crucial, given growing eco-awareness. Seek sustainable sources and recyclable or biodegradable packaging. This benefits the planet while appealing to green consumers.

Pricing merits careful consideration. Will you target luxury, mass or budget positioning? Packaging must reflect brand values visually. All claims should have robust proof, clearly communicating benefits offered. Keep the end-user at heart to create resonant, differentiated offerings.

Related: Online Review Management for Skincare

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. Outline Your Positioning Strategy

Now determine how you’ll differentiate your branding, ingredients, price-points, benefits, visuals etc. relative to competitors. Craft precise messaging and aesthetics.

Pinpoint and amplify your unique selling proposition(s) to stand apart. Consider your origin story, ethics and mission too – these build meaningful perception.

Regarding pricing, deeply understand budget limitations and price sensitivity among users, willingness to pay premiums for organics/naturals etc. Benefits must have credible data and inspire purchase intent.

Consistent, alluring aesthetics also attract and retain customers. Ensure cohesive visuals, packaging and branding that reflects personality. Messaging should engage your specific target needs, pet peeves and problems. Remember, marketing builds relationships, not just sales.

how-to-conduct-skincare-market-research-create-distribution-plan

. Create A Distribution Plan

Decide which sales channels you’ll leverage to get products to customers. This may encompass dedicated eCommerce, retail partnerships, online marketplaces etc.

Consider each channel’s advantages and limitations. Online marketplaces like Amazon or eBay have enormous reach and convenience yet intense competition. Retail partnerships increase physical exposure and credibility through affiliation, but dilute margins via revenue sharing models. Your own website enables total control and higher profitability but demands major investments into design, UX, traffic and infrastructure.

Factor in resources, business models and users to determine optimal channels. Diverse distribution diversifies risk while expanding addressable market size.

Distribution ChannelProsCons
Online Marketplaces (e.g. Amazon, eBay)Wide reach and accessibility, 24/7 availability, detailed customer data and analyticsIntense competition, reliance on platform’s algorithm and policies, lower profit margins due to fees
Your eCommerce SiteFull control over branding and customer experience, higher profit margins, direct customer data collectionRequires investment in website development and maintenance, responsibility for driving traffic and marketing
Retail Partnerships (e.g., Sephora, Ulta)Physical product presence, immediate customer feedback, brand credibility through associationLower profit margins due to revenue sharing, less control over product presentation, complex agreements
Pop-Up ShopsDirect interaction with customers, opportunity for brand exposure and feedback, flexibility in location and timingHigh setup and operational costs, temporary, lacks long-term presence, limited reach compared to permanent stores
Salons & SpasTargeted audience with interest in skincare, opportunity for product demonstrations and expert endorsementsLimited audience reach, dependence on the salon’s client base and reputation, revenue sharing models
Subscription BoxesAccess to a dedicated customer base, opportunity for sampling and customer acquisitionLimited control over product selection and presentation, one-time exposure per subscription cycle, potential for low conversion to regular customers
Social Media & Influencer MarketingHigh engagement potential, ability to target specific demographics, viral marketing possibilitiesRequires continuous content creation and management, influencer partnerships can be costly, risk of brand message dilution
Wholesale DistributionLarge volume sales, broader market reach, reduced marketing responsibilitiesLower profit margins due to bulk pricing, less control over retail presentation, potential brand dilution in mass markets
how-to-create-user-personas-for-skincare-refine-user-persona

. Track and iterate

Post-launch, creating customer feedback loops is vital for continual optimization. This entails proactively seeking, collecting, assessing and implementing user input to refine offerings and marketing. Simply put, listen to your customers to fuel growth.

  • Encourage Feedback: Make reviewing seamless via website forms, surveys, and social media outreach.
  • Listen Actively: Don’t just aggregate data – truly digest insights to understand motivations. Allow user perspectives to inform decisions.
  • Analyze Input: Identify patterns in commentary to pinpoint improvement areas with tools.
  • Iterate Based on Findings: Apply intelligence uncovered to enhance products, messaging, service etc.
  • Communicate Changes: Inform users their voice was heard and acted upon to boost satisfaction and further responses.
  • Monitor and Adjust: Continually gauge impact of changes using benchmarks and tweak approaches as needed. Optimization is an ongoing process.

Related: Building Brand Community for Skincare

Expert Tip
Harpal Singh

Integrate a feedback collection feature directly on your website for frictionless opt-in reviews. Post-checkout follow-up surveys can also help to gauge customer satisfaction levels and feature requests.

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Tips

  • Clearly define your target customer avatar including demographics and psychographics before beginning research. This provides an informative filter for every subsequent activity.
  • Use both secondary market data as well as primary consumer research for a 360-degree view of opportunities.
  • Ask open-ended questions to uncover deeper motivations, beliefs and unmet needs consumers may have.
  • Incorporate video or images into surveys and interviews to bring concepts to life and spur reactions.
  • Spend time in stores observing real-world customer purchasing behavior and overhearing conversations.
  • Don’t ask basic yes/no questions that elicit one-word reactions rather than insights.
  • Don’t rely solely on ease-of-access channels like social media polls to guide decisions – ensure representative and unbiased consumer data sources.
  • Don’t ignore unexpected research learnings because they don’t fit what you aimed to learn or currently offer.
  • Don’t neglect to continuously gather customer usage feedback post-product launch to confirm marketing translates to real satisfaction.
  • Don’t pull competitors’ marketing claims, pricing or product ideas too closely without your own additional validated learning.

Case Study

Glowytics is an early-stage direct-to-consumer natural skincare startup targeting eco-conscious millennial women dedicated to clean ingredients, ethical sourcing and sustainable packaging. Though passionate as first-time founders, lacking prior CPG or skincare experience prompted extensive market research to mitigate risk in formulations, branding and messaging to appeal to intended consumers.

Research Approach

Glowytics creators Alicia and Jessica invested six months upfront speaking to over 100 women across America through in-depth surveys, video interviews and focus groups. Detailed customer personas were created using demographic and psychographic data to focus conversations on skincare purchasing criteria, ingredient priorities like organic and cruelty-free, preferred delivery formats, pricing thresholds and reactions to brand positioning statements. Secondary research on market trends, competitive landscape and industry reports were also continually referenced to spot white space opportunities.

Key Findings

The comprehensive research uncovered that while the target millennial woman indeed cared deeply about natural ingredients, she equally prioritized gentle but potent formulas that visibly demonstrated anti-aging efficacy quickly over only buzzworthy sustainably-sourced botanicals. Competitors were seen as authentic but slow-acting. Pricing testing showed room for ultra-premium positing. This shaped Glowytics hero product to a $120 antioxidant overnight serum with patented biotech that delivered real results seen when waking up. Complimentary rich creams and oils were then formulated to support. Branding also evolved to feel science-backed yet inviting.

Outcomes

Glowytics research-driven repositioning resulted in an overwhelmingly positive market response once launched with 80% of customers repurchasing within 3 months and user-generated content fueling new acquisition. The insights uncovered through intensive qualitative and quantitative consumer understanding were credited as the catalyst that enabled Glowytics to stand out in the natural skincare landscape. Research is now an ongoing pillar to engage customers for continuous optimization as expansion plans unfold into new territories.

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