#United States #New York #Innovation #Beauty Industry #Composable Manufacturing

The Beauty Industry's Call to Action: $86 Billion Opportunity

In a recently published report by Atelier in collaboration with Accenture, an urgent challenge looms for the beauty industry, revealing a staggering $86 billion transformation potential. This figure reflects a pressing need for innovation as brands grapple with evolving consumer demands and an ever-competitive market.

The report titled "The $86 Billion Wake-Up Call for Beauty Brands" uncovers the significant gaps in the current infrastructure that beauty brands rely on, specifically in product development and manufacturing processes. Despite the progress made in business transformation—reportedly accelerating by 183% since 2019—beauty brands are lagging in adapting their manufacturing capabilities to keep up with these changes. As it stands, only 13% of companies possess supply chain capacities that align with their business objectives, and a meager 11% have adopted the integrated systems necessary for a modern supply chain operation.

Understanding the Market Gaps

The study highlights some critical market pressures that are contributing to the industry's innovation crisis:

• - Consumer Expectations: A notable 64% of consumers expect brands to respond more quickly to market needs, yet 59% of beauty companies take over a year to make necessary adaptations.
• - Declining Innovation: The report reveals that between January and May 2024, only 46% of product launches were genuine innovations, a stark decrease from 63% in 2015.
• - Supply Chain Vulnerabilities: A significant 59% of beauty brands continue to depend on single-source suppliers, heightening their risk exposure in the supply chain.
• - Data Utilization Challenges: Furthermore, a concerning 79% of executives reported difficulties in effectively using consumer data to enhance personalization efforts in marketing and product development.

Introducing Composable Manufacturing

To address these pressing issues, the report introduces the concept of composable manufacturing. This innovative approach promises to bridge the gap in the manufacturing ecosystem by connecting all elements on a single platform, which empowers beauty brands to rapidly react to changing market dynamics. Through the use of technologies such as virtual product creation and digital twins, brands can significantly shorten their time from concept to sample, slashing timelines from months to mere minutes while also cutting costs.

The efficacy of implementing composable manufacturing is backed by compelling statistics:

• - Supply chain leaders are witnessing an impressive EBIT margin of 16.2%, compared to just 8.6% for others.
• - The development cycle can shrink from up to 18 months to as little as three months.
• - Brands leveraging Atelier's platform have reported a twofold increase in operating profit margins for developed SKUs.
• - Additionally, AI-driven research and development can accelerate time to market by 25–50% and drastically reduce data processing requirements by 80%.

Steps for Transformation

The report outlines three essential actions for beauty leaders to take to capitalize on this $86 billion opportunity:
1. Modernize Product Development: By utilizing AI-powered platforms, beauty brands can expedite their timelines by up to six times.
2. Build Networked Manufacturing: Implementing solutions that offer over 8.5 million supply chain variations enables real-time production adaptations.
3. Enable Intelligent Orchestration: Utilizing agentic AI can help unify fragmented teams, optimize resources, and speed up output.

Nick Benson, the Founder and CEO of Atelier, succinctly encapsulates the significance of this paradigm shift: "The $86 billion opportunity represents a fundamental reimagining of how beauty products are created and delivered." He emphasizes that composable manufacturing is a key to transforming rigid supply chains into agile and resilient networks capable of supporting contemporary market demands.

As the global trade landscape continues to evolve, beauty brands face significant challenges in maintaining their competitive edge. Audrey Depraeter-Montacel, Accenture's global beauty lead, further asserts, "Advanced AI, combined with robust data analytics, will empower brands to predict consumer needs and convert insights into impactful product launches swiftly and effectively."

To learn more about this urgent revelation and explore the comprehensive report from Atelier and Accenture, visit Atelier's research page.