How Leading Beauty Retailers Are Embracing Sustainability In 2023

Source : Forbes｜Author : Clara Ludmir

Refillable stations are considered an efficient way to reduce the environmental impact of the beauty industry, but are still very limited in mainstream beauty retail. GETTY

The resilient and dynamic beauty industry is in the midst of deep shifts, shaped by the distinct behavior of younger generations and their vision of beauty, the rise of wellness and self-care, and the unique role of social platforms to promote beauty and brands. With the industry expecting to record a compound annual growth rate of 6% between 2022 and 2027 based on a joint report between BoF and McKinsey and represent $427 billion in retail sales by 2030, the growth opportunity for beauty retailers is clear. But as they capitalize on this expansion, how exactly do they incorporate sustainability into their operations and offerings?

Ulta Beauty and Sephora review portfolio ranges for more planet-friendly assortments

Tata Harper is a clean beauty brand with strict eco-friendly operations, from its ingredients sourcing to packaging, and is Ecocert certified. TATA HARPER

On their e-commerce websites, Sephora and Ulta BeautyULTA +0.5% display a clean or conscious beauty tab, allowing shoppers to browse brands based on their sustainability profile. Criteria for brands to be selected vary slightly, but overall the focus is on the following: clean ingredients, cruelty-free, sustainable packaging and a last one - “positive impact” for Ulta and “climate commitment” for Sephora. While Ulta’s vision of positive impact is synonymous with giving back, meaning that it displays brands that have commitments towards minorities and vulnerable communities, Sephora’s notion of positive impact is much more focused on brands’ impact on the planet.

For brands to be listed under Sephora’s “Clean + Positive Planet” tab, they must meet one of the following climate goals: “have carbon-neutral operations, greenhouse gas emissions reduction, or corporate office and owned or leased operations powered by 100% green energy” as stated on its website. Currently, forty brands meet these criteria, including Caudalie, Biossance, Herbivore, Farmacy, The Nue Co, Ren Clean Skincare, Tata Harper and Youth to the People. Given the increasing pressure retailers are facing from the market and consumers, working with suppliers to incentivize to innovate from a people and planet-conscious perspective will be key for the industry to evolve in that direction.

In Europe, Douglas and Sephora use their own brand to innovate sustainably

While influencing leading beauty brands to rethink their products to have the least environmental impact is definitely a good initiative - and one taken by many global beauty retailers - what players like Sephora or Douglas have done is leverage the power and control they have over their own brand to design optimal products. Sephora Collection is known for offering affordable beauty products, but it is also an eco-designed line made with post-consumer recycled content, bio-sourced plastic, Forest Stewardship Council Certified cartons or recyclable packaging. Product quality has been a focus for the retailer which has a strict ingredient list, no animal testing and is mostly vegan (some products contain beeswax, which will be eliminated by 2025).

Sephora is a leading global beauty retailer, with innovation, inclusion and clean beauty as driving forces of its evolving beauty offering. GADO VIA GETTY IMAGES

European retailer Douglas has leveraged its own brands to enhance the offering of clean beauty products, with a focus on transparent labelling, vegan and organic ingredients as well as recycled and recyclable packaging. The retailer’s pillar of “respecting nature” is defined by designing products that are cruelty-free, vegan and organic, which is a good basis for innovation standards but could definitely go a few step further regarding ingredient sourcing or use of water for planet-friendly beauty innovation. With that in mind, reducing waste is a key objective for the group: "currently, Douglas' main priority to become more climate friendly is - apart from emission reduction - to focus on reducing plastic waste,"shares Peter Wübben, SVP of Communications & Sustainability at Douglas.

Overall, Douglas is recognizing the need to evolve and adapt to industry and shopper expectations, with sustainability being definitely a driving force behind these shifts. According to Wübben, “there is a clear push and pull dynamic around sustainability. The voice of the consumer is pushing demand for more sustainable products and behavior beyond just the shelf. At the same time, industry and retailers are coming up with new products and initiatives like waste reduction or product refill, which means the customer has to adapt.”

By enforcing sustainability standards with suppliers and developing lower-impact own brand products, beauty retailers are experimenting with what will hopefully become the new standards of tomorrow’s beauty market, one that is conscious of everyone’s individuality while at the same time being planet-conscious. Other initiatives focusing on circularity such as in-store recycling or refillable product stations are on the rise, but the challenge will be to see if and how stores can do this at scale given the complexity of these, both from a shelf space and consumer attitude perspective. Overall, production and innovation standards are evolving for the better, but beauty stores of the future will look a lot different than they do now, with constant progress needed for a truly clean and planet-friendly beauty industry and shopping experience.