Read all about the impact of COVID-19 on the beauty industry and how brands are adapting to this shift in our socioeconomic climate.
By: / November 24, 2020
Earlier last week, we had the privilege of attending Beauty Expo’s first ever virtual Beauty Space event! Additionally, we also hosted a Beauty Talk to discuss the impact of COVID-19 on the beauty industry and how brands are adapting to this shift in our socioeconomic climate. To those of you who joined us on our talk on 18th November, thank you so much for tuning in. And for those of you who were unable to join us, here’s a recap of our discussion just for you!
- The overall impact of COVID-19 on the beauty industry
- Is the beauty industry more resilient than we think?
- Beauty categories that took a major hit
- Beauty categories that are doing relatively well during COVID-19
- Change – the only constant in the midst of uncertainty
- Never underestimate the power of community
- Brands that are thriving amidst the COVID-19 chaos
The overall impact of COVID-19 on the beauty industry
First of all, let’s talk about the beauty industry in the midst of this COVID-19 storm we find ourselves in. Besides the overall drop in sales and demand of beauty products in the first quarter of 2020, about 30% of the global beauty industry was forced to shut down while others had to take severe cost-cutting measures to stay afloat. What’s more, many startups and smaller businesses sadly never even made it through the first quarter.
According to a recent report by McKinsey & Company, the global beauty industry generates $500 billion in sales annually and accounts for millions of jobs worldwide. Hence with stores forced to close their doors during lockdown, many beauty brands and employees have taken a significant hit financially and are left scrambling to make ends meet. Additionally, those in the beauty service industry have also had to face job cancellations due to the risky close-contact nature of their jobs. On the other hand, consumers are no longer able to test in-store beauty samples due to strict SOPs that are now in place.
Is the beauty industry more resilient than we think?
In spite of it all, the beauty industry on the whole has proven itself to be more resilient than we realize. For instance, beauty brands like L’Oréal and Estée Lauder have been manufacturing sanitizers in place of perfumes. This is because alcohol is a key ingredient in both of these products and these brands already have the necessary license to include alcohol in their product formulations.
Before COVID-19 turned the world upside down, 85% of sales came from purchases in physical stores. While sales at brick and mortar stores took a sharp downturn this year, beauty brands have seen e-commerce sales rise almost 2x higher than before the pandemic. Ironically though, 60% of millennials did their beauty shopping in stores prior to the pandemic. However, this tallies with consumer studies which show that 85% of consumers are most likely to purchase products that they experience in person. Overall, we can see that beauty brands are changing the where and how their beauty products and services are sold.
Beauty categories that took a major hit
Since the entire world is wearing a face mask and working remotely these days, lipsticks and perfumes are definitely not as practical or relevant now during the pandemic. In fact, global luxury brands have reported a 75% drop in sales for perfumes and cosmetics this year alone. Hence, a new overarching theme for the pandemic era is born – comfort over colour.
Beauty categories that are doing relatively well during COVID-19
Because more people are staying indoors and working from home, there has been an overwhelming increase in sales for skincare, body care and DIY wellness kits. During the lockdown, consumers in France drove the sale of luxury hand soap up by 800% within the first few months. At the same time, sales for skincare, hair care and nail care in Europe, the US and Asia were driven up by a whopping year-on-year increase of 300%. With this in mind, we can see there has been a staggering demand for self-care and DIY beauty categories. People are now spending more time grooming themselves at home with DIY hair colour kits, manicure sets and even portable beauty tools and gadgets. Instead of lip colors, the eyes are now the center of focus with more brands getting into eyeshadow palettes, liners and volumizing mascaras.
Change – the only constant in the midst of uncertainty
It goes without saying that beauty brands have to adapt and fast if they are to survive and thrive in this pandemic. Hence, this means having to jump an entire decade ahead in the way they do business. On top of transitioning to e-commerce platforms, brands also need to change the way they implement their online marketing strategies. At the same time, brands need to avoid falling into the “let’s wait till this pandemic blows over” mindset when coming up with new plans for change.
Never underestimate the power of community
Although e-commerce platforms and virtual apps are ideal, smaller brands and startups are not in the financial position to implement them. So that’s where social media comes in. Instead of investing in a high stakes and high cost platform, smaller brands can focus on building their communities online. In addition to beauty tutorials, live discussions are a great way for brands to engage with their followers. Also, consistency is key if brands want to instill loyalty in their followers. That, and authenticity. By putting consumers at the forefront, brands are also able to gain a wealth of information. Such as consumer spending habits and real-time reviews.
Brands that are thriving amidst the COVID-19 chaos
With new challenges no doubt present new opportunities. Here are some examples of brands that are thriving during this unprecedented time:
- Wildling Beauty: 2x increase in sales for the Empress stone, a guasha beauty tool used for facial massages at home
- Dr. Dennis Gross: Sales of facial steamers went up by 45%
- R+Co: Riding the DIY hair colour trend, R+Co saw a 50% increase in sales for their purple shampoo and conditioner, which are formulated specifically for coloured hair
- Herbivore Botanicals: With the rise of the skincare trend, sales of their iconic Glow Serum shot up by 139% since March this year
- Supergoop: Known for their effective sunscreens, Supergoop is seeing an uptick in sales for their light-blocking skincare products that protect the skin from blue light devices
While it looks like the pandemic is not going away any time soon, that doesn’t mean that brands should take this change all lying down. Proactivity and digitalization are key elements of survival, and so too are consumer-centric campaigns that touch on holistic wellness and empathy.
Watch our full Beauty Talk here!
If you missed the chance to join the Beauty Space event from the 18th to 19th November, worry not because you can still access the platform until 16th December 2020! All you have to do is register or log in at www.beautyspacevirtual.com to:
- Check out participating exhibitors
- Exchange business cards
- Download beauty brochures
- Browse the latest beauty products and services
- And watch their Beauty Talk series featuring industry experts from all over the world!
Author Clara Siew | Date 23rd Nov 2020