With an expected global market value of $758.05 billion by 2032, up from $383.75 billion in 2024, the beauty and cosmetics industry is growing – and with that growth comes fiercer competition for brands. In this increasingly crowded market, how can beauty businesses find the high growth they need to stay ahead?

We sat down with THG Beauty's CEO, Lucy Gorman, to explore how her team have navigated the challenges of growing a brand in today's beauty industry and, faced with growing customer acquisition costs and the potential in new regions, what businesses can do themselves to drive profitable, long-term growth in a competitive market.

How do the challenges of scaling ecommerce differ for high-growth, digital pure-play beauty brands versus larger retail businesses?

Although that distinction does exist, we have found that, in reality, the same strategic approach can be successful for both brand and retailer. We have always been acquisition-oriented in our marketing, which means we work really hard to target new customers with every campaign activation.  

So whether we’re building a campaign to launch a new serum for one of our brilliant haircare brands, or working on a seasonal event for one of our retail brands, we will build from the bottom up based on the same funnel approach. We’ll then naturally focus our spend onto a suitably sized customer group to ensure we’re getting effective conversion performance through to our sites.

Whilst customer acquisition costs continue to soar, what are some of the methods THG Beauty has used to acquire new customers profitably and increase customer retention?  

We have learned over many years at THG Beauty that the key is to always be looking for new ways to engage with new audiences. We have evolved our marketing strategy to allow us to move dynamically across channels and within channels, testing different content formats and creative to make sure we don’t become too complacent.  

We also have found great success in extending and complementing our reach through partnerships, amplifying our own activity within the retail media networks most partners now operate in. This is most evident in the campaigns we co-create with brand owners across our LOOKFANTASTIC and Cult Beauty retail media teams.

And now more than ever, when you have to work even harder to find those customers, it becomes even more important to then do everything you can to hold onto them. We are obsessive about building a community of beauty lovers, and love seeing customers engage in the many communities we cultivate. When you can combine the benefits of a loyalty scheme with a best-in-class delivery service and targeted content served through your own app, then you can really see the power of building that community at scale.

Why is localization critical for beauty brands entering new markets and what are the most critical parts to get right?

It’s important to deliver on your brand promise throughout the customer journey – from the very first marketing content they see, through to the quality of communication on that crucial last-mile fulfillment.

So, we have always tried to ensure we work with local content creators and influencers, and then worked to ensure that we are providing checkout and payment options that customers trust to deliver.

What are some of the biggest lessons THG Beauty has learnt when scaling its portfolio of brands?

The old cliché of “think global, act local” is still very valuable as you scale into new markets. There has to be the consistent brand promise, that obsession about delivering to every customer. But you should do this in a way that is as locally authentic as you can afford to make it, and as reactive as you can be to each market.

What would be one piece of advice you would give any beauty brand looking to scale profitably?

It’s a question of balance – sustainable growth comes from consistently meeting and beating customers' expectations. Once you have done the already expensive job of bringing customers to your brand, it’s more important than ever to build a strong connection with them. This involves a combination of as many of the below as you can reasonably manage:

• Personalized recommendations: Use data to tailor product suggestions and content to individual customers.
• Exceptional customer service: Ensure quick and helpful responses to inquiries, as well as easy returns and exchanges.
• Community building: Foster a sense of belonging through social media, loyalty programs and exclusive content.
• Transparency and authenticity: Be honest about your products, ingredients and values.

By focusing on customer experience, you'll not only drive repeat purchases but also encourage positive word-of-mouth, which is essential for sustainable growth.

If your beauty and cosmetics brand is looking to drive sustainable growth in a competitive and challenging market, THG Commerce is here to help.

Our complete commerce solution with the highest-performing technology platform in market offers global capabilities, helping brands remove the complexity of DTC to accelerate profitable, long-term growth,

Start driving growth today – get in touch.