Innovation in cosmetics - can anything new still be invented?

When talking about innovation, it is worth starting by defining the term. In common parlance, it is often used to refer to a new product. However, according to the definition of one of the world's greatest economists, Joseph A. Schumpeter, it is a much broader concept. He developed a model in the middle of the 20th century where the innovation in question represents a certain basic phenomenon that is responsible for economic development. He explained it as a combination of capital and the means of production, encompassing the following five categories:

1. introduction of a new product (introduction of a new good, service, etc., with which customers have not yet been familiar),
2. introduction of a new way of making a product (implementation of a new production method not tried and tested in the industry in question),
3. the opening of a new market (where the domestic industry in question had not previously existed - regardless of whether the market existed previously or not),
4. the acquisition of a hitherto unknown source of raw materials or semi-finished products (regardless of whether the source already existed or was newly discovered),
5. the creation of new market structures in industry (for example, the implementation of a new way of organising a particular industry).

Despite the fact that this economist, lived at the time of the greatest industrial change to which he related the principles discussed, I believe that his model is universal and that it also translates to today's cosmetics industry.

New product introduction

This is the path to innovation with which we are most familiar and, I have the impression, the most difficult these days. In the era of the high diversification of producers in Poland and the high competitiveness of the market, it is very difficult to introduce a product that will significantly differentiate itself and, most importantly, sell. What may be the key to success, however, are market trends. Currently, simple, natural recipes have gained high popularity. It is important to remember that innovation is not only about a new product, but also about improving (or in this case, simplifying) the current one.

Introducing a new way of doing things

If we don't have an idea for a new product, innovation can be its new form of production, manufacturing or even delivery to the customer! The launch of dispensers in many chains in Poland by Yopa can serve as a perfect example in this space. This cosmetics manufacturer has used vending machines that allow us to refill a given product using our existing empty packaging. This technology reduces the use of plastic, fits in with the eco trend, cares for the environment and, I think, ultimately reduces production costs.

Opening of a new market

With good, tried-and-tested products, it is not always necessary to change them by force, but, on the contrary, to base marketing and the message to the customer on quality and classics. When looking for innovation in such a situation, a good opportunity may be to explore new markets. Recently, the Arab markets, which warmly welcome products from Europe, have begun to gain recognition. What is worth noting is that each culture has its own cultural requirements and legal restrictions. In the case of markets where Islam is predominant, I would point out that you should carry out halal purity testing of your products. These will determine what substances cannot appear in the product, such as animal DNA content or alcohol. A new fast-growing branch of the cosmetic market is also now hemp cosmetics. The popularisation of CBD and legislative changes offer increasing opportunities to introduce new products or augment current ones with new ingredients. However, when launching a product on a new market, it is worth paying attention to the applicable regular legislation beforehand.

Obtaining a hitherto unknown source of raw materials or semi-finished products

In this age of globalisation, it is worth taking advantage of the opportunities available and looking for raw materials in other parts of the world when thinking about innovation. In this way, a new product can be developed or an existing product can be improved with new properties. We can also innovate in this area by finding substitutes for currently used ingredients. More than once we have found that by importing a substitute with the same properties, we can reduce costs or even increase the quality of the product itself. It is best to look to the competition for inspiration. The cosmetics market is currently extremely developed worldwide. This makes it possible to observe what trends or raw materials are used on other continents.

Creation of new market structures in industry

The current cosmetics market in Poland is highly fragmented between a large number of companies. According to data compiled by Bank Pekao, by the end of 2021, 600 companies in the field of cosmetics production were registered in our country, giving us 3rd place in Europe. This situation is very favourable from the consumer's point of view, but for companies it represents a high level of competition, which requires high marketing and promotion expenditures to reach the consumer. A good solution may be to change the structure of the company by joining consortia or participating within larger groups. A form of innovation can be to join forces to reap greater benefits with less effort.

Is it possible to develop innovation in cosmetics? I hope that my article has answered this unequivocally. What I would like to emphasise is that although we implicitly target one of the points outlined above, we must take into account that they are strongly interrelated. When creating a new product, we often look for new markets or new forms of production and distribution. When thinking about a new market, we look for collaborations or sign exclusive sales agreements. Innovation is a phenomenon that is made up of many factors, but it is required in order to talk about the development of our company and the industry as a whole.