Revenue of the cosmetic and beauty industry in the United States from 2002 to 2020(in billion U.S. dollars)

PREMIUM

Revenue of the cosmetic & beauty industry in the U.S. 2002-2020

Published by M. Ridder, Nov 24, 2020 This statistic depicts the total revenue of the cosmetic industry in the United States from 2002 to 2019 and provides a forecast for 2020. The revenue of the U.S. cosmetic industry is estimated to amount to about 49.2 billion U.S. dollars in 2019.

Cosmetics

Since the early twentieth century, the production of cosmetics has been controlled by a handful of multi-national corporations. The global cosmetics industry is broken down into six main categories; skin care being the largest one out of them all, accounting for 36.1 percent of the global market in 2016.

In recent years, consumers have been spending higher levels of disposable income on cosmetics than they had in the past. Unfortunately, the global financial crisis put a damper on the market for some years, making more affordably priced merchandise and do it yourself at home products key in the beauty market. In 2015, the average annual expenditure on cosmetics, perfume and other personal care products among U.S. consumers dropped slightly, to approximately 164 U.S. dollars. Eye makeup products such as mascara and eye liner were among the cosmetic products with the highest number of transactions per capita.

In the coming years, global cosmetic companies will continue to focus their efforts on product innovation in order to attract new consumers and keep existing consumers loyal to specific brands.

Skin care sales in the United States in 2019, by segment in million U.S. dollars

OVERVIEW

Luxury Revenue Share in percent

No matter your gender, age, or ethnic background, everyone can benefit from investing in a skin care routine. Skin care products are unique among cosmetic products in that they are often deemed necessary by medical professionals, particularly products that offer UV protection. While many people wear no makeup or use no hair styling products, nearly everyone has some form of skin care product, even if it’s just a bottle of lotion or a tube of sunscreen.

The United States has a thriving skin care market. The two best-selling skin care products in the U.S. are facial cleansers and acne treatments, selling 316 million and 13.85 million units respectively in 2019.

Every year new and innovative products come onto the market, so it should come as no surprise that anti-aging skin care market in the United States is projected to grow substantially between 2015 and 2021. The anti-aging facial products with the largest market shareare the Olay Regenerist Micro-Sculpting, the regular Olay Regenerist, and the Neutrogena Rapid Wrinkle Repair.

U.S. consumers, 52 percent reportedly use skin care products every day, 65 percent of women in the United States use skin care products every day, compared to 37 percent of men.

The U.S.’s millennial group is aging, the younger generations have a huge impact on the country’s care and beauty care industry. The young generation tends to spend a high amount on the skincare, color cosmetics, and other personal care products for ensuring their appearance matching with their social media presence.

The rise in social media, beauty specialist retailers and e-commerce have given the brands huge opportunities for success. Demand for personal care products is increasing due to the increasing purchasing power of millennials and significant players undertaking acquisitions and divestments to remain competitive.

 Also, increasing demand for anti-aging products is propelling the growth of this market.Owing to this factor, manufacturers are focusing on launching new and innovative products, in order to increase their offerings and customer base, which, in turn, would provide them an edge over their competitors.

Revenue in the Skin Care segment amounts to US$18,119.1m in 2020. The market is expected to grow annually by 5.4% (CAGR 2020-2023).By 2020, 71% of sales in the Skin Care segment will be attributable to Non-Luxury goods

Skin care sales in the United States in 2019, by segment (in million U.S. dollars)

Key Market Trends

Growing Inclination towards Organic, Natural, and Cruelty-Free Products

Growing consumer concern is causing an increase in the demand for organic and natural skincare, and “platinum collection beauty” products. For instance, Platinum Deluxe® cosmetics announced the launch of the company’s new category called platinum collection at Platinum Deluxe, that clearly establishes which of their products are formulated without controversial ingredients. Those that meet Platinum Deluxe ingredients guidelines are termed as “platinum collection” and receive the retailer’s platinum collection at Platinum Deluxe. Similarly, consumers in the market tend to prefer products with the label ”cruelty-free”, denoting that animals are not harmed in the testing of such products. For instance, Wet n Wild is a popular cosmetics products brand in the United States that markets its products as cruelty-free. Moreover, in recent times, there is a sharp rise in the number of beauty blogs and social media accounts that are committed to the benefits of going chemical-free, which has worked in favor of natural and cruelty-free products by enhancing consumer’s information.

Increased Spending of United States Consumers on Beauty and Personal Care Products

Consumer spending towards cosmetics and other personal care products has witnessed a rise. For instance, according to data published by Bureau of Labor Statistics, the average annual expenditure on cosmetics, perfume and bath preparation products per consumer unit in the United States is forecasted to grow at a CAGR of 5.55% in the period 2015-2017. Due to the increase in advertising and promotional activities, the consumers in the United States are still buying these cosmetics. Additionally, often the advertisements are focused towards a specific age group, such as adolescents or ageing-women, in an effort to influence and target specific population groups. Due to frequent product innovation in the market, consumers are being introduced to new types of products, and trying them out. Consumers generally want to ensure that they buy products that suit their skin or hair type and thus, product trial is important in the cosmetics market. Thus, companies such as Avon and Estee Lauder Company have been increasing their marketing expenditures towards such activities in recent years.

Changing lifestyles

Improvement in the current lifestyles of the individuals is majorly affecting the cosmetics market. Consumers have now become more conscious regarding the usage of cosmetics in their daily life in an effort to step up their style quotient and overall personality. Cosmetics play an important role in enhancing one’s inherent beauty and physical features. Men are also increasingly using cosmetics in their daily routine including various types of fragrances and deodorants. This growing demand of cosmetic products has in turn led to the growth of cosmetics market across the world.

Rising GDPs of all the regions

During recession 2007-2009, there was an overall global rise in GDP and economies across various regions. Presently, increasing GDPs of various countries is positively affecting the global cosmetics market. Continuous rise in GDP has improved the economies of various countries and has raised the spending capabilities of individuals. Rising disposable income levels of the individuals across various regions is driving them to buy personal luxury goods, which, in turn, is positively influencing the global market growth.

Competitive Landscape

Major players in the United States beauty and personal care products market include Unilever, Loreal, The Estee Lauder Companies Inc., and Proctor and Gamble with popular brands such as  Dove, Maybelline New York, M.A.C., and Olay.

The market is highly competitive with players actively competing in terms of new product launches, mergers and acquisitions, expansions and partnerships. Additionally, leading players are investing heavily on research and development to come up with product innovations. 

 PLATINUM DELUXE COMPETITORS

  1. LOREAL

L’Oréal manufactures and sells cosmetic products for women and men worldwide. It operates through four divisions: Consumer Products, L’Oréal Luxe, Professional Products, and Active Cosmetics. The Company offers shampoos, hair care products, shower gels, skin care products, cleansers, hair colors, styling products, deodorants, sun care products, make-up, perfumes, etc. L’Oréal provides its products under the L’Oréal Paris, Garnier, Maybelline New York, NYX Professional Makeup, Lancôme, Yves Saint Laurent Beauté, and other brands.

Founded in 1909, the L’Oréal Group has devoted itself solely to one business: beauty. It is a business rich in meaning, as it enables all individuals to express their personalities, gain self-confidence and open up others. L’Oréal has set itself the mission of offering all women and men worldwide the best of cosmetics innovation in terms of quality, efficacy and safety. Providing access to products that enhance well-being, L’Oréal has made the universalization of beauty its project for the years to come.

The L’Oréal Group has become the largest cosmetics and Beauty Company in the world. In 2016, L’Oréal was the leading personal care brand in the world with a brand value that amounted to 23.52 billion U.S. dollars. Once again, 2016 was a good year for L’Oréal on many fronts. The Group achieved strong sales growth and once again demonstrated its ability to outperform the beauty market, and to gain market share, even in the more difficult markets of Western Europe and the United States. In 2016, L’Oréal also continued to reflect the integration of the Group’s internationalization, as the “new markets” segment remained to be the company’s number one geographic zone in terms of sales.

The company’s cosmetic branch is primarily focused on skin care, hair care, make-up, hair colorants and perfumes. In 2016, skincare generated almost 30 percent of L’Oréal’s global cosmetic sales; amounting to over seven billion euros.

The company did have a void in terms of addressing young consumers looking for affordable yet exciting color cosmetics, which Urban Decay is expected to fulfill. However, it needs to address its presence in the affordable natural/organic segment going forward.

With worldwide sales of over 29.8 billion euros in 2019, L’Oreal is the world’s largest cosmetics and Beauty Company, concentrating on hair color, skin care, sun protection, make-up, perfumes, and hair care.

ANTI-AGING CREAM FOR…A DULL SKIN TONE

As skin matures, it can start to appear duller. The L’Oréal Paris Age Perfect Rosy Tone SPF 30 Sunscreen Face Moisturizer is an intense daily anti-aging moisturizer that’s enhanced with rosy pigments to instantly revive the look of skin’s rosy tone. The rich, non-greasy formula smooths gently over skin to nourish it with moisture, while the rosy pigments help to reveal a younger look. Skin is immediately hydrated after using. Bonus: It’s also formulated with broad-spectrum SPF 30 (more on that soon). In the morning, smooth this anti-aging cream gently over your face after cleansing in a circular motion.

SKIN CARE PRODUCTS

ANTI-AGING CREAM FOR…SUN PROTECTION

Broad-spectrum sunscreen is a skin care must year-round—no matter your age. According to the Food and Drug Administration (FDA), you should apply a broad-spectrum sunscreen with an SPF of 15 or higher daily as directed. The L’Oréal Paris Revitalift Triple Power Day Lotion SPF 30 is an anti-aging moisturizer formulated with broad-spectrum SPF 30 that works to reduce the appearance of wrinkles and firm and brighten skin. Keep in mind, according to the FDA, applying sunscreen isn’t the only sun protection measure you should take. Additionally, you should also reapply every two hours (or immediately after swimming or sweating), limit your amount of time in the sun (especially between 10 a.m. and 2 p.m.), seek shade, and wear long-sleeved shirts, pants, hats, and sunglasses.

ANTI-AGING CREAM FOR…VERY DRY OR SENSITIVE SKIN

Both dry and sensitive skin types need special care, which means you’ll want to be strategic with your moisturizer choice. The L’Oréal Paris Age Perfect Hydra Nutrition Honey Day Cream is formulated with nourishing manuka honey and helps envelop skin with a replenishing layer of long-lasting, non-sticky hydration. In addition to being ideal for very dry and sensitive skin types, it’s also paraben-free. Apply a light layer onto clean skin every morning, and at nighttime, swap it out for the L’Oréal Paris Age Perfect Hydra Nutrition Honey Night Balm.

ANTI-AGING CREAM FOR…OVERNIGHT NOURISHING

Sometimes, it pays to use a different moisturizer at night than what you used in the morning. If you’re looking for an anti-aging night cream, try the L’Oréal Paris Age Perfect Cell Renewal Night Cream. The rich creamy texture comforts and nourishes skin. Skin feels nourished immediately, while skin appears renewed with continued use over time. Every night, smooth this cream onto your face in an upward motion until thoroughly absorbed. For best results, first apply the L’Oréal Paris Age Perfect Cell Renewal Golden Serum over cleansed skin then layer the moisturizer on top

ANTI-AGING CREAM FOR…OVERNIGHT RADIANCE

Turn your AM and PM moisturizing routine into a spa-like experience with our best anti-aging night mask (which is basically just a heavy-duty night cream). The L’Oréal Paris Triple Power Triple Power Anti-Aging Overnight Mask is formulated with three of the top proven anti-aging ingredients: Pro-Retinol, vitamin C, and hyaluronic acid to visibly reduce wrinkles, firm, and brighten skin. Overnight, skin is visibly more radiant and resilient. Smooth over your face and neck every evening as the last step in your nightly skin care routine.

ANTI-AGING CREAM FOR…MULTIPLE AGING SKIN CONCERNS

Not everyone has just one concern they’re looking to address. If you want to tackle more than one need your skin has, the L’Oréal Paris Revitalift Anti-Wrinkle + Firming Face + Neck Fragrance Free is a perfect choice. Formulated with Pro-Retinol and centella asiatica, the anti-aging moisturizer helps smooth, firm, and hydrate areas of your skin that can be prone to visible signs of skin aging, like wrinkles and loss of elasticity. Smooth it over your neck and jawline until thoroughly absorbed after cleansing in the morning and evening.

STRENGTHS

A variety of beauty and cosmetic products.

No one has a bigger share in the beauty and cosmetic world than L’oreal. Many companies decide to branch into this industry with a product line or two. But L’Oréal is fully invested in this space and has been since they were founded. You’ll see the L’oreal brand while walking through the makeup, hair, and skincare aisles of your local department store.

L’oreal portfolio of products is astounding. Garnier, Nyx, Maybelline, LANCOME, Shu Uemara. L’oreal clearly dominates this industry because they’ve acclaimed such high profile brands under their name.

High quality.

L’oreal doesn’t just offer inexpensive, department store products. They’ve also moved into the luxury brand, offering high-quality products for the individual who shops on a richer budget. Or if a customer wants a bit of both worlds — cost-effective and expensive — they can easily find what they’re looking for through L’oreal.

International access.

L’oreal’s catalogue boasts brands from all over the world. And you can find L’oreal in more than 120 countries. They manufacture and distribute products in bulk which is less expensive than buying small quantities at a time.

Moving into organic.

Consumers want glowy skin and healthy hair. And for many, that means less chemicals and questionable ingredients in their hair and skin products. It’s more costly for companies to use natural ingredients, but L’oreal didn’t hesitate. On top of putting an end to testing on animals in 1987, they now offer a complete natural and organic line of products.

Endless research.

Because L’oreal has so many products in different niches of the beauty and cosmetic industry, the company relies heavily on research and development. Consumers want products that work, but are also safe for their bodies. That means understanding how to offer sun protection in skin care and makeup products. And cutting out sulfates, parabens, and silicones from hair products. L’oreal works with dermatologist, cosmetologists, and scientists to provide the top-of-the-line products customers crave.

WEAKNESSES

Growing saturation.

The entrance of new skin care product line have affected the company in coping up with the ever increasing pressure to come up with more differentiated skin care products

Shrinking profit margins.

L’oreal heavily invests in research in development. They must if they want to keep their customers happy. Unfortunately, it’s massively expensive. And it’s eating away at their profits — at least in comparison to the competition. Still, focusing so heavily on research and development is how L’oreal has stayed competitive in this saturated market. So this is both a strength and a weakness for the brand.

Slow divisions.

Since L’oreal offers so many products, they require a number of subdivisions to handle everything. As such, they have more than 60,000 employees accounting for product development, manufacturing, disbursement, and customer service. The company’s human capital expenditure is no joke. But neither are the problems. Relying on so many people to manage products leads to issues, such as slowness.

  • COTY INC

Coty is a beauty company with a portfolio of well-known brands in four categories: fragrances, color cosmetics, skin care, and body care. Coty is organized into three divisions: Coty Consumer Beauty, Coty Luxury and Coty Professional Beauty, each focused on their respective categories and channels, with a lean structure to enable faster decision making, focused investments and better communication with customers and consumers.
Coty Consumer Beauty is focused on color cosmetics, retail hair coloring, and styling products, body care and mass fragrances, with the intent of providing consumers with innovative products primarily in the mass retail channel. Coty Luxury is focused on expanding Coty’s leadership position in prestige fragrances and skincare in the Luxury Beauty market, across all regions and luxury channels, including travel retail. Coty Professional Beauty is focused on servicing salon owners and professionals in both hair and nail care, covering all key salon segments and salon client needs. 

Their product portfolio includes world renowned brands such as Marc Jacobs, Calvin Klein, Chloé, Gucci, Hugo Boss, Tiffany & Co, Balenciaga, Bottega Veneta, Alexander McQueen, Davidoff, Burberry and Miu Miu, as well as skincare brands with Lancaster and philosophy.

STRENGTHS OF COTY INC

  • Superb Performance in New Markets – Coty Inc. has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Successful track record of developing new products – product innovation.
  • Strong Free Cash Flow – Coty Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Good Returns on Capital Expenditure – Coty Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Automation of activities brought consistency of quality to Coty Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Coty Inc. has invested in building a strong brand portfolio. The SWOT analysis of Coty Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
  • Highly skilled workforce through successful training and learning programs. Coty Inc. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

WEAKNESSES

  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Coty Inc.
  • Limited success outside core business – Even though Coty Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • The profitability ratio and Net Contribution % of Coty Inc. are below the industry average.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Coty Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Coty Inc. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Coty Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • SALLY BEAUTY

Sally Beauty is a specialty retailer and distributor of professional beauty supplies. It operates through two segments: Sally Beauty Supply, which offers beauty products to retail customers and salon professionals; and Beauty Systems Group, which offers professional beauty products, directly to salons and salon professionals through its sales force, as well as through company-operated and franchised stores. Sally Beauty supplies hair color and care, skin and nail care, beauty sundries and styling tools.

STRENGTHS

  • Strong distribution network – Over the years Sally Beauty Holdings has built a reliable distribution network that can reach majority of its potential market.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Highly successful at Go To Market strategies for its products.
  • Strong Free Cash Flow – Sally Beauty Holdings has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Strong Brand Portfolio – Over the years Sally Beauty Holdings has invested in building a strong brand portfolio. The SWOT analysis of Sally Beauty Holdings just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Automation of activities brought consistency of quality to Sally Beauty Holdings products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Highly skilled workforce through successful training and learning programs. Sally Beauty Holdings is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Good Returns on Capital Expenditure – Sally Beauty Holdings is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

WEAKNESSES

  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Sally Beauty Holdings needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • The profitability ratio and Net Contribution % of Sally Beauty Holdings are below the industry average.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Limited success outside core business – Even though Sally Beauty Holdings is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • High attrition rate in work force – compare to other organizations in the industry Sally Beauty Holdings has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • REVLON

Revlon is a provider of cosmetics, hair color, fragrances, skincare, and beauty care products. It operates in two segments, the Consumer division, and the Professional division.

Its Consumer segment global brand portfolio includes Revlon color cosmetics, Almay color cosmetics, SinfulColors color cosmetics, Pure Ice color cosmetics, Revlon ColorSilk hair color, Revlon Beauty Tools, Charlie fragrances, and Mitchum antiperspirant deodorants.

Revlon’s Professional segment global brand portfolio includes Revlon Professional, CND, and American Crew men’s grooming products. The Company sells its products through sales force, sales representatives, and independent distributors.

STRENGTHS OF REVLON

  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Successful track record of developing new products – product innovation.
  • Strong Free Cash Flow – Revlon has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Superb Performance in New Markets – Revlon has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Highly skilled workforce through successful training and learning programs. Revlon is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Automation of activities brought consistency of quality to Revlon products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Revlon has invested in building a strong brand portfolio. The SWOT analysis of Revlon just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

WEAKNESSES

  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the day’s inventory is high compare to its competitors is that Revlon is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • The profitability ratio and Net Contribution % of Revlon are below the industry average.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Revlon needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Revlon is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

LUXURY SKIN CARE MARKETING STRATEGY

1. Improve discoverability and desirability by working with social media influencers and investing in digital storytelling

As consumers increasingly spend more time searching for information about their beauty routines online, social media plays an important role in the beauty purchase journey online. Digital communities are indeed facilitating new product and brand discovery among modern consumers.

Growth in the beauty market is partly fueled by the desire to be selfie-ready, and the impact of beauty digital influencers and social media platforms on beauty ideals. Modern affluent consumers, especially Millennials and Gen Z shoppers are influenced by, and value the opinions of, the online community.

Beauty vlogging isn’t new, but beauty brands have rapidly ramped up their involvement with YouTube personalities who attract massive audiences with their makeup tutorials and how-to videos.

With its shoppable features, Instagram is also emerging as a social network of choice for affluent beauty shoppers, bringing the point-of-sale right to the point-of-discovery.

2. Tap into crowdsourcing to develop new beauty products

Crowdsourcing is taking the beauty industry, especially indie beauty brands, to a whole new frontier by redefining the way beauty products are conceptualized, produced and sold.

Innovative beauty challengers (such as Glossier) use their online communities via social media to solicit consumers’ input and feedback.

By empowering consumers to become co-creators, Indie beauty brands can foster emotional attachments and thus build early customer loyalty, giving new brands an edge over legacy brands.

3. Deliver a holistic beauty experience through cross-segment wellness collaboration

Fighting urban pollution. Protecting your skin from damaging blue light. Caring for your face with toxin-free products. The quest for wellness and a healthier lifestyle is transforming attitudes towards the beauty industry. We expect to see increased crossover and collaborations between beauty, fitness and wellness brands playing in these adjacent sectors.

4. Digital enables personalised beauty solutions at scale

Technology allows beauty brands to be authentically relevant to individuals, at scale.A growing number of beauty brands and retailers are thus harnessing the power of data and technology — such as artificial intelligence (AI) and augmented reality (AR), algorithms, apps and scanners — to offer consumers an unprecedented level of product personalization according to consumers’ skin types and their personal needs.But while beauty shoppers tend to be ahead of the Fast-Moving Consumer Goods (FMCG) curve in online shopping, we’re still very early in the development of truly connected beauty.

5. Beauty inclusivity: Embrace diversity and become genderless

The men’s beauty category is often cited as a high-growth beauty market segment, as image-conscious male consumers are showing increasing enthusiasm for grooming and beauty product categories.

6. A new attitude: Forget anti-ageing, think healthy ageing

Ageing demographic trends and the increasing desire to retain youthful appearances have groomed the cosmetics industry, worldwide. This growing consumer segment deserves brands’ attention.

In parallel, wellness-focused millennial consumers approach ageing with a desire for healthy rejuvenation. Luxury beauty brands should leverage this momentum to promote preventative skincare and holistic skin maintenance beauty products — including skin protection features such as air and digital pollution.

REFRENCES

https://www.statista.com/topics/4517/us-skin-care-market/

https://www.statista.com/statistics/551427/us-skin-care-sales-by-segment/

https://craft.co/loreal/metrics

https://craft.co/coty/revenue

Identity Protection PIN Program Will Soon Be Available to All Taxpayers

In January, the IRS Identity Protection PIN Opt-In Program will be expanded to all taxpayers who can properly verify their identity.

An Identity Pretention PIN is a six-digit number assigned to eligible taxpayers to help prevent their Social Security number from being used to file fraudulent federal income tax returns. This number helps the IRS verify a taxpayer’s identity and accept their tax return. The online Get An IP PIN tool immediately displays the taxpayer’s assigned number.

This tool uses Secure Access authentication verify a person’s identity. Taxpayers should review the Secure Access requirements before they try to use the Get An IP PIN tool.

Other ways to get an IP PIN
There are other ways to get an IP PIN if someone is unable to pass the Secure Access authentication. Taxpayers with income of $72,000 or less should complete Form 15227 and mail or fax it to the IRS. An IRS employee will call the taxpayer to verify their identity using a series of questions. Those who pass authentication will receive an IP PIN the following tax year.

Taxpayers who cannot verify their identities remotely or who are ineligible to file Form 15277 should make an appointment, visit a Taxpayer Assistance Center and bring two forms of picture identification. This is an in-person identity verification. After the taxpayer passes authentication, an IP PIN will be mailed to them within three weeks.

Taxpayers should never share their IP PIN with anyone but their tax provider. The IRS will never call to request the taxpayer’s IP PIN, and taxpayers must be alert to potential IP PIN scams.

Here’s what taxpayers need to know before applying:
The Get an IP PIN tool will be available in mid-January.
This is the preferred method of obtaining an IP PIN and the only one that immediately reveals the PIN to the taxpayer.
Taxpayers who want to voluntarily opt into the IP PIN program don’t need to file a Form 14039, Identity Theft Affidavit.
The number is valid for one year. Each January, the taxpayer must get a new one.
It must be entered correctly on electronic and paper tax returns to avoid rejections and delays.
Taxpayers with either a Social Security number (SSN) or Individual Tax Identification Number who can verify their identity are eligible for the program.
Any primary or secondary taxpayer or dependent can get an IP PIN, if they can prove their identity.
The IRS plans to offer an opt out feature to the IP PIN program in 2022.
Confirmed victims of tax-related identity theft
There is no change in the IP PIN Program for confirmed victims of tax-related identity theft. These taxpayers should still file a Form 14039 if their e-filed tax return rejects because of a duplicate SSN filing. The IRS will investigate their case and once the fraudulent tax return is removed from their account, they will automatically receive an IP PIN by mail at the start of the next calendar year.

IP PINs will be mailed annually to confirmed victims and participants enrolled before 2019. For security reasons, confirmed identity theft victims can’t opt out of the IP PIN program. Confirmed victims also can use the Get an IP PIN tool to retrieve lost IP PINs assigned to them.

Why Paying Your Bills on Time is So Important

We all know it’s important to pay our bills on time, but we may not fully appreciate why it’s so important. Of course, there’s the worry of getting evicted, a car being repossessed, the lights getting turned off or losing cell phone service. These are all serious concerns to be sure, but there’s another dimension to late bill payments that is a lot more subtle and can have just as serious an affect on your future and your financial health – damaging your credit payment history.

It may be easier not to stress about being late on a payment because there is no fear of any of the consequences mentioned above. But being late on a bill payment gets recorded in your credit report and your payment history is the biggest single factor affecting your credit score, accounting for 35% of it. While you might not feel the effects right away, damaging your credit score could mean paying higher interest when your mortgage renews or not getting approved for a mortgage in the first place, having to take out a high-interest car loan or, again, not finding anyone to approve your loan application and/or in some cases not getting hired for the job you want because of your credit.

The Immediate Effects of Late Payments

There are also immediate effects of late payments. According to Borrowell:

“The typical timeline goes as follows: 30 days, 60 days, 90 days, 120 days, 150 days, and then it will be written off as a loss and categorized as ‘uncollectible.’ It’s extremely important to keep up with payments or be aware that you’re late. In addition to negatively impacting your score, chronically missed payments may lead to higher interest rates, late fees and penalties, reduced credit limits, and even court judgments.”

And according to Equifax (one of the three credit bureaus in America that maintain our credit reports):

“Late payments can remain on your Equifax credit report for up to seven years from the date of the missed payment. The late payment remains even if you pay the past-due balance. Your payment history may be a primary factor in determining your credit scores, depending on the credit scoring model (the way scores are calculated) used. Late payments can negatively impact credit scores.”

Improving Your Payment History

So now that we’ve covered the reasons why it’s so important to make sure you’re paying your bills on time, let’s cover some strategies to do so. A good place to start is with your current payments. Here are some tips to do so:

always make your payments on time
make at least the minimum payment if you can’t pay the full amount that you owe
contact the lender right away if you think you’ll have trouble paying a bill
don’t skip a payment even if a bill is in dispute

Contacting the company for a bill you won’t be able to pay on time is important. You might feel intimidated to do so, but lenders are usually willing to work with borrowers because they understand that life happens and because they want to get paid. They may put a note on your file that stops your late payment from being recorded with the credit bureaus, they may also work out a repayment plan that’s easier for you or they may offer other services like payment deferrals. Just be sure to ask about all the terms and conditions of any services or programs a lender offers you as you may end up paying more money in interest to use them.

Practical Tips for Paying Your Bills on Time

The last thing you want is to miss a bill because of forgetfulness so setting up automatic payments on all your bills would be ideal. Just be sure to set a reminder for yourself on your phone and with a post-it attached to a physical calendar every month (or every couple of weeks as the case may be) to double-check your account and confirm that there’s enough money in it to cover all of the money coming out. You’ll also want to review your bills in detail to make sure there aren’t any issues and that you’re not being overcharged.

If you have any bills that you’re not able to pay from your bank account, again, setting up a repeating calendar event on your phone and writing a note to yourself on a bulletin board, calendar or anywhere else you look at on a daily basis, can help you stay on top of your bills, build up good payment history and maintain healthy financial wellness.

Tax Pros Relied Upon For Pandemic Loan Services

Surcharges related to the expenses of doing business in the pandemic — cleaning, training, personal protective equipment — are starting to appear in businesses such as dentists’ offices and restaurants. Have tax professionals and accountants begun charging more for special accommodations such as in-person meetings or special services such as Paycheck Protection Program loan forgiveness consultation?

Though they’ve certainly shifted how they meet with clients, so far, practitioners say mostly no.

Bruce Primeau, a CPA and president at Summit Wealth Advocates, in Prior Lake, Minnesota, said that his firm isn’t charging for the “handful” of face-to-face meetings over the last months: “I asked the person responsible for setting client meetings to ask each advisor individually first whether they’re comfortable meeting with anyone face to face. Only if they say yes do we offer the option to a client.”

“We had a package (flat fee) that was for consulting on the various programs available and possible impact to cash flow,” said Chris Hardy, an Enrolled Agent and managing director at Georgia-based Paramount Tax and Accounting. “For those who didn’t want to pay for the full package, we did charge hourly for consulting services.”

“I haven’t had in-person meetings after March 15,” said Brian Stoner, a CPA in Burbank, California. “All done by phone, email or Zoom. This is part of my free services this year. I’ve also helped clients with their estimated PPP loan calculation when they applied and also told them what the numbers were for the forgiveness calculation. I never filled out any of the forms, just giving them information to fill out themselves. I haven’t charged for this service this year.”

PPP work

Historically, preparers surveyed tended to raise their tax prep fees about 5 percent a year, with higher increases coming in the wake of tax law changes or the retooling of forms.

But history has little precedent for the pandemic-related programs that created more than an extra-long season for preparers. They also created new work, such as helping business clients secure the PPP loans — and what is likely for many struggling companies to be the all-important loan forgiveness afterward.

“This is a new experience for CPAs,” said Scott Kadrlik, managing partner at Meuwissen, Flygare, Kadrlik & Associates, in Eden Prairie, Minnesota. “Our clients deal with their banks for loan funding and we help provide the information for programs that have been around for a long time. The PPP is new with little guidance from the SBA and the banks know as little as we do about the programs.”

“We have not charged our clients for time spent on PPP issues unless there was significant information and time spent on the process. Mainly our time was spent answering questions and interpreting SBA information,” he added.

“We will certainly charge for PPP loan forgiveness consultation because a successful loan forgiveness application can save the borrower a lot of money,” said Lawrence Pon, a CPA at Pon & Associates in Redwood City, California. “We can help them with this workload.”

“This is similar to a taxpayer representing themselves in an audit versus hiring a tax professional. I’ll certainly be charging this based on my hourly rate,” he added. “We can’t charge based upon the results of the loan forgiveness.”

EA Debra James at Genesis Accounting & Management Services, in Lorain, Ohio, said her firm helped many clients with the PPP loan application process — assembling documentation such as payroll returns, income statements, business schedules and business returns — and in some cases completed the application for the client and spoke to the lenders to answer additional questions.

“Much of this was done without client meetings, and there was no additional charge if a meeting was required,” James said, adding that fees ranged from $150 to $250 “depending on the degree of involvement needed.”

“As yet,” James added recently, “no services have been provided for loan forgiveness applications … When services are requested, time will be billable comparable to the original application fees.”

“I bill hourly. If I do additional work for clients that involves more than a quick response, I bill for it,” said Phyllis Jo Kubey, an EA in New York.

Meetings and obligations

Some firms have a jump on professional social distancing via technology, but basic swapping of information remains different these days. “I work out of my home and I’ve worked with almost all of my clients virtually for many years,” said Kubey, who lives in a doorman building. “Clients can drop off hard-copy documents when they wish and I can leave documents for them to pick up without direct contact. For the few clients who needed an in-person meeting, we met outside, masked.”

California’s Pon said his firm doesn’t charge for special accommodations. In-person meetings in his area stopped in March. “Many clients were very upset when that happened,” he added. “For the upcoming season, we have no plans for in-person appointments.”

“After the 2019 filing season I realized how much of my time was being consumed by client meetings. I added client meeting and a specific charge to each invoice sent out in 2019,” said Mary Kay Foss, a CPA in Walnut Creek, California. Foss said she did close her office and that her whole building was shut down.

“For some clients, I’d meet them at the door of the building to retrieve their hand-delivered packets,” she said. “Our county shut down on March 17 and there were only a handful of in-person meetings before that. Those meetings were included in the 2019 preparation invoice.”

Perhaps one reason preparers haven’t followed dentists and restaurants is a sense of continuity with clients. “Our goal during this time is to help our clients maximize revenue, watch expenses and do everything they can to stay in business,” Kadrlik said. “They never forget who helped them through this uncertain time.


Top Tools For Tax & Accounting Professionals To Automate Tasks

In recent years, more and more tax and accounting professionals are embracing computer technology to become more efficient in their practices and to keep pace with their clients’ needs. As a result of the outbreak of the global pandemic last winter and the physical distancing guidelines that followed, tax and accounting professionals are turning to technology to get their work done without having to meet with their clients in person.

As the tax and accounting profession shifts more towards advisory services, leading firms are leveraging technology to automate low value work like data entry, categorization, file exchange and cleanup.  The following article discusses some of the top tools that help firms automate tasks.

Cloud-based Income Tax Software

Browser-based income tax software has many advantages over traditional, desktop software and helps the tax professional’s office run more efficiently with compliance type tasks. This leaves more time to provide advisory services and better work / life balance. Depending on the software here are the potential benefits: A true online offering can run on a Mac or PC and the user doesn’t have to worry about installing and updating the software periodically, like you would with desktop software.  There is no maintenance, IT, and computer servers required — which will save the user time, money, and stress in the long run.  Client data is automatically backed up in the cloud.  The online software is more suitable for remote employees and multi-site firms. 

Cloud-based Accounting Software

Browser-based accounting software has similar advantages as online income tax software and more. Cloud accounting software does the heavy lifting so you can spend your time on other important business tasks. Depending on the software here are the potential benefits: The small business owner and accountant have the flexibility to sign in from anywhere with an internet connection and no hosting service is required.  You can access the account from any device–including laptops, smartphones, and tablets.  Multiple users can be logged in at the same time, working in the same books and making real-time updates.  The business owner can allow the accountant to access the books to answer questions, fix problems and get the books ready for tax time.  This eliminates the need to transfer sensitive data back and forth. Data is routinely backed up to servers in multiple locations. No physical hard drives or computers containing sensitive data that can be stolen are necessary. Since financial information isn’t kept on the premises, the risks of fires and natural disasters are also mitigated.  You can automatically sync your bank accounts so you don’t have to manually import transactions or verify expenses. 

Client Portals & Document Management

Sharing documents and collaborating with clients through a client portal can have lasting benefits and advantages. This is especially true when the global pandemic forced the accountant and client to meet in person less often, or not at all. An integrated client portal (such as Intuit’s Link) makes it easy for your clients to deliver their tax data to you in a timely and organized way. Depending on the solution, you can do the following tasks through a client portal:Collect and organize your clients’ information (such as W-2s and 1099s) through a secure online portal. This avoids the risk of sending your clients’ confidential information by mail, email or unsecured file-sharing and protects the documents with encryption.Request, share documents, and easily apply them to the tax return. This reduces manual input errors by importing the data directly from your clients’ documents and financial institutions.The tax professional can stay in touch with their clients through the portal by delivering reminders about estimated taxes, updates on tax law changes, information about firm events and other announcements. A document management solution allows you to upload documents, store them, view them as you do the return and download them if needed. 

Practice Management

A practice management solution allows tax firms to gain more visibility and control over everything they’re working on, while reducing time spent on recurring tasks so they can be more hands-on with every client. Here are some key attributes of practice management software: Automate and standardize your firm’s operations so nothing falls through the cracks. Get complete visibility into all of your work at a glance or drill into the details, which allows for enhanced efficiency across your workflow. Share data across hundreds of integrated software and go to one place to look at all your applications. An efficient way to conduct and track time and billing responsibilities.

Electronic Signatures

The IRS allows e-signatures for Form 8879, IRS e-file Signature Authorization, for individual tax returns.  To help reduce in-person contact and reduce the risk to taxpayers and tax professionals during the pandemic, the IRS temporarily expanded the list of forms they’ll accept with a digital signature (IR-2020-194).  Check with your state to see if they allow for parallel functionality.  An e-signature solution reduces cycle time, improves the tracking of authorizations and allows for clients to sign via a mobile device. 

Can You Deduct College Tuition On Your Federal Income Tax Return?

Can You Deduct College Tuition On Your Federal Income Tax Return? There are several options for deducting college tuition and textbooks on your federal income tax return, including the American Opportunity Tax Credit, Lifetime Learning Tax Credit, Tuition and Fees Deduction, and Employer-Paid Educational Assistance, as well as tax-free distributions from a college savings plan.

There is no double-dipping. Each dollar of qualified expenses can be used to justify only one tuition tax break. There are also coordination restrictions that prevent taxpayers from claiming both the American Opportunity Tax Credit and Lifetime Learning Tax Credit for the same student, even if the qualified expenses do not overlap.

The American Opportunity Tax Credit is the best of the tuition tax breaks. It is worth more per dollar of qualified expenses than any other tuition tax break, even a tax-free distribution from a 529 college savings plan. Generally, taxpayers should claim the American Opportunity Tax Credit first, unless they want to preserve its availability for future tuition expenses.

All of these tax breaks can be claimed even if the taxpayer does not itemize.

College tuition may be eligible for a tax deduction or tax credit on your federal income tax return.

American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) is a partially-refundable tax credit worth up to $2,500 per student per year. The AOTC covers 100% of the first $2,000 in tuition, fees and course materials (textbooks, supplies and equipment) per student and 25% of the second $2,000. The tax credit is 40% refundable (up to $1,000) if the taxpayer cannot be claimed as a dependent on someone else’s income tax return.

Qualified expenses do not include nonacademic fees, such as student activity fees, athletic fees and insurance.

The tax credit is limited to the four years of postsecondary education and to four tax years per student. Expenses paid for academic terms that begin in the first three months of the next tax year can be counted as though they were paid during the current tax year.

The AOTC is subject to the following eligibility restrictions: The student must be the taxpayer, the taxpayer’s spouse or the taxpayer’s dependents. The student must be seeking a degree or certificate at a college or university that is eligible for Title IV federal student aid. The student is ineligible if they are participating in a dual enrollment program. The student must be enrolled on at least a half-time basis. The student is ineligible if they were convicted of a federal or state felony drug offense for the sale or possession of a controlled substance.

The AOTC is not subject to the Alternative Minimum Tax (AMT). The income phase outs are $80,000 to $90,000 (single) and $160,000 to $180,000 (married filing jointly). Taxpayers who file as married filing separately are not eligible. The income phase outs are not adjusted annually for inflation. About 7.4 million taxpayers (4.8%) claimed the American Opportunity Tax Credit in 2018.

Lifetime Learning Tax Credit

The Lifetime Learning Tax Credit (LLTC) is a non-refundable tax credit worth up to $2,000 per taxpayer. The LLTC covers 20% of the first $10,000 in tuition and required fees.

Qualified expenses may include nonacademic fees, such as student activity fees and athletic fees, but only if they must be paid directly to the college as a condition for enrollment or attendance. Qualified expenses are limited to courses of instruction to “acquire or improve job skills.”

Expenses paid for academic terms that begin in the first three months of the next tax year can be counted as though they were paid during the current tax year.

The tax credit can be claimed for an unlimited number of years.

The LLTC is subject to the following eligibility restrictions: The student is not required to be seeking a degree or certificate, so the tax credit can be used for continuing education. The student must be enrolled at a college or university that is eligible for Title IV federal student aid. The student can be enrolled on a part-time basis. The student is eligible even if they were convicted of a federal or state felony drug offense for the sale or possession of a controlled substance. The Lifetime Learning Tax Credit is often claimed by graduate or professional school students who are no longer eligible for the American Opportunity Tax Credit. The income phase outs in 2021 are $59,000 to $69,000 (single) and $119,000 to $139,000 (married filing jointly). Taxpayers who file as married filing separately are not eligible.

The income phase outs are adjusted annually for inflation.

About 2.8 million taxpayers (1.8%) claimed the Lifetime Learning Tax Credit in 2018.

Tuition and Fees Deduction

The Tuition and Fees Deduction is an above-the-line exclusion from income for up to $4,000 in tuition and fees. The deduction is reduced to $2,000 for taxpayers with income within the income phase out ranges. Course material costs can also qualify if paid directly to the college and if they are required for enrollment or attendance. Expenses paid for academic terms that begin in the first three months of the next tax year can be counted as though they were paid during the current tax year.

The tuition and fees deduction can be claimed for an unlimited number of years.

The Tuition and Fees Deduction is subject to the following eligibility restrictions: The student is not required to be seeking a degree or certificate. The student must be enrolled at a college or university that is eligible for Title IV federal student aid. The student can be enrolled on a part-time basis. The student is eligible even if they were convicted of a federal or state felony drug offense for the sale or possession of a controlled substance. The income phase outs are $65,000 to $80,000 (single) and $130,000 to $160,000 (married filing jointly). Taxpayers who file as married filing separately are not eligible. The income phase outs are not adjusted annually for inflation.

Employer-Paid Educational Assistance

Up to $5,250 in employer-paid educational assistance can be excluded from income. Qualified expenses include tuition and fees, books, supplies and equipment. This tax benefit is available for an unlimited number of years. The student must be the employee, not the employee’s spouse or dependents. The employee does not need to be seeking a degree or certificate. There are no income phase outs.

Tuition Gift-Tax Exclusion

Tuition paid directly to an educational institution is not subject to gift taxes. However, direct payments of tuition may reduce the student’s eligibility for need-based financial aid. This tax break can be claimed for an unlimited number of years. There are no income phase outs.

Qualified Scholarships

Scholarships, grants and fellowships that are used to pay for tuition, fees and course materials (books, supplies and equipment) are excluded from income if the student is seeking a degree or certificate. Tuition waivers are also eligible. The money must not be a fee for services provided by the student, with a few exceptions, such as teaching and research assistantships. There are no income phase outs.

Education Savings Bond Program

Interest on Series EE bonds issued in 1990 or a later year and all Series I bonds is excluded from income if it is used to pay for tuition and fees, or rolled over into a 529 college savings plan, prepaid tuition plan or Coverdell education savings account. The income phase outs in 2021 are $83,200 to $98,200 (single) and $124,800 to $154,800 (married filing jointly). Taxpayers who file as married filing separately are not eligible. The income phase outs are adjusted annually for inflation.

529 College Savings Plans and Prepaid Tuition Plans

The earnings portion of a qualified distribution from a 529 college savings plan or prepaid tuition plan is tax-free. Qualified expenses include tuition and fees, books, supplies and equipment, and expenses for special needs services. Room and board is a qualified expense if the student is enrolled at least half-time. Qualified expenses may include up to $10,000 each in student loan payments for the beneficiary and the beneficiary’s siblings. 529 plan contributions may also be eligible for a state income tax deduction or tax credit. In most states contributions are eligible for the state income tax break even if you immediately tax a distribution to pay for qualified expenses. This effectively provides a discount on college tuition and other qualified expenses. There are no income phase outs.

Coverdell Education Savings Accounts

The earnings portion of a qualified distribution from a Coverdell education savings account is tax-free. Qualified education expenses include tuition, fees, books, supplies and equipment. Room and board is a qualified expense if the student is enrolled at least half-time. There is an income phase-out on contributions, but not distributions. The income phase outs are $95,000 to $110,000 (single) and $190,000 to $220,000 (joint). Taxpayers who file as married filing separately are not eligible. The income phase outs are not adjusted annually for inflation.