At the BeautyMatter 2026 State of Play Leadership Roundtable, founder and CEO Kelly Kovack moderated a conversation between Andrea DiNunzio, founder and principal of 20 Rivers, a strategic growth and leadership consultancy; Kelly St. John, founder and CEO of KSJ Collective, a strategic retail growth consultancy; and Andrew Stanleick, Managing Director and Operating Partner at private equity firm Gauge Capital. Together, the panel unpacked what is reshaping beauty in 2026.
While uncertainty continues to define the broader economy, panelists agreed that beauty remains one of the strongest consumer categories, with the industry showing no sign of slowing. From changing retail expectations to the rise of AI and new global growth markets, here’s a breakdown of the panel’s discussion.
The panel began pushing back against the notion that the beauty industry is struggling. According to Andrew Stanleick, beauty isn't slowing down, but the era of easy growth is long gone.
Though consumers continue to spend on beauty, they are becoming increasingly selective about what they purchase. Shoppers gravitate toward products that demonstrate clear efficacy, scientific credibility, and disciplined execution.
With that mindset, investors are becoming more diligent, and retailers are scrutinizing SKU productivity more closely. Brands built on performance marketing or short-term buzz are finding it difficult to maintain momentum.
As Stanleick noted, "Markets like this don't destroy great brands; they reveal them."
A much smaller group of companies have concentrated capital flowing into beauty today. Stanleick pointed to recent investments in Saltair and biotech skincare company Epicutis as examples of investor interest in brands with proven demand and scientifically backed formulations. Rather than rewarding top-line growth, investors are evaluating criteria such as repeat purchase behavior, strong margins, durable economics, and long-term scalability.
"The bar has gone up meaningfully," Andrea DiNunzio said. "You really have to show those wins and rely on business fundamentals."
Deal structures are also evolving. Founders are now expected to remain actively involved in their brands after investment, especially as shared ownership becomes more common.
The discussion also pointed to a key turning point for brand founders. While launching a successful brand takes vision and creativity, sustaining the business after its first few years requires a strong operational side.
"I’m not asking if this is a great brand," said Stanleick. "I'm asking, can this become a great business?"
For many founders, that means having financial discipline, understanding unit economics, tracking performance across channels, and using data dashboards to make better-informed decisions.
While retail is a powerful growth tool, the panelists agreed that wholesale partnerships are becoming more complex.
In the past, brands that secured distribution with a marquee retailer may have viewed that partnership as validation for both investors and consumers. Today, that logo alone carries much less weight. Investors are now interested in understanding how productive those doors actually are. This includes how frequently inventory is reordered and whether brands can support the partnership through education, sampling, marketing, inventory, and field teams.
Kelly St. John reiterated that many founders continue to underestimate the true cost of retail.
"It's an ugly situation when a brand enters retail before they have the capital, the infrastructure, or really the consumer awareness to support that partnership," she said.
The panel also noted that success is measured more by productivity than scale. A smaller number of highly productive retail doors can sustain longer-term value, as opposed to a more aggressive rollout.
"It becomes the opposite of rocket fuel," said St. John.
Several categories have emerged as clear opportunities for growth throughout the remainder of 2026, with efficacy continuing to drive consumer demand.
Bodycare remains one of the industry's strongest-performing categories, fueled by fragrance layering trends, consumers seeking treatment-like body products, and the influence of GLP-1 medications, which have created new skin concerns.
The panelists also identified men's beauty as reaching an inflection point, presenting a significant opportunity for retailers. Rather than entering through traditional shaving routines, younger male consumers are discovering products through wellness, bodycare, and haircare. At the same time, men are becoming increasingly comfortable purchasing products outside dedicated men's brands.
St. John said the brands that will win are those that can "present men's in a way that a man is comfortable shopping, curate the assortment where you have strength in skincare, but also have strength in haircare, especially with that Gen Z consumer. They're all obsessed with their hair."
Additionally, hair growth, scalp health, and clinically backed skincare remain attractive areas for both retailers and investors, reflecting consumers' preference for products that deliver measurable results.
The discussion also unpacked how polarized today's consumer landscape has become.
At the premium end, shoppers continue to spend on luxury brands, but they increasingly expect memorable experiences. Consumers want exclusivity and community, not just products.
On the other end of the spectrum, price-conscious consumers are becoming more selective than ever, reinforcing the panel's view that efficacy is essential to winning shoppers over. It's brands in the middle of the market that are facing the greatest pressure.
"If you're in the middle," DiNunzio said, "you have to figure out why you're special."
Beyond pricing alone, the panelists stressed that customer service and retail experiences are becoming increasingly important competitive advantages.
While the United States remains beauty's largest market, the panelists shifted the conversation to global opportunities. Stanleick, DiNunzio, and St. John all identified India and the Middle East as markets of particular interest.
"India is 20% of the world's population. It's enormous. It's underserved, and they're genuinely open to both their homegrown brands and international brands right now," said DiNunzio.
Meanwhile, the Middle East's luxury consumer, fragrance obsession, and digitally engaged population make it "a real growth engine."
"They're very open to discovery. If you are a luxury brand and you're not playing in the Middle East, it's definitely one to look at and to consider very seriously," DiNunzio added.
But as St. John pointed out, innovation is now coming from every corner of the world.
"From a product standpoint, innovation no longer only flows from traditional Western culture,” she said. “There's K-beauty, C-beauty, Ayurvedic beauty, and all the Brazilian bodycare that we see. All of these things influence global consumer expectations."
Looking at the biggest topics shaping 2026, from social selling and TikTok Shop to Gen Alpha, artificial intelligence quickly emerged as one of the discussion's most significant themes.
"It's the foundational shift that is quietly powering all the others," said Stanleick. "That's the force multiplier."
Rather than being merely another trend, AI is becoming the underlying infrastructure reshaping product development, discovery, consumer insights, content creation, forecasting, and conversion. DiNunzio added that AI's ability to interpret social signals in real time could improve everything from inventory management to media investment.
Meanwhile, St. John argued that social commerce is fundamentally changing retail itself. Instead of separating discovery, education, and purchase into different channels, social commerce combines them into a single experience.
But, she noted, this doesn't make physical retail "any less of a priority to a consumer; it just changes the role."
Consumers now enter stores already informed and emotionally invested, reinforcing the importance of positive retail experiences.
As the industry enters the second half of 2026, the panelists agreed that success will not be measured by rapid expansion but by disciplined execution. On the brand side, DiNunzio argued that companies must first understand their metrics and profitability before answering a critical question: What is our clear point of difference?
"If you do not have a clear story, a clear message, and know who your consumer is, you're going to miss the mark," she said.
Brands need clarity around both their positioning and their target customer.
From a buyer's perspective, St. John reiterated the importance of curating an assortment of brands focused on "fewer and better bets." She said buyers should prioritize improving productivity within existing store counts rather than continually expanding into new retailers.
Stanleick closed with four priorities for operators: Strengthen the core products, consumers, and channels that generate the most revenue; protect repeat purchase rates; simplify and improve execution; and stay close to changing consumer behaviors.
"Businesses that will win will adapt to those changes and adapt their strategies so they continue to win," he said.
