How will the beauty industry adapt to life post-COVID?

 

 

In 2020, the UK’s beauty industry ranked as the seventh largest cosmetics market in the world, with a value of around £27 billion.

Consumers have long enjoyed the traditional, interactive purchases, with high-end beauty retailers priding themselves on their specialised in-store experience. However, almost every brand has been forced to adapt since the COVID-19 pandemic started, with various lockdowns keeping doors shut for much of the past year.

This caused a pivot towards online sales, in tandem with the introduction of new technologies to allow for virtual testing and partnering with 3PLs to get deliveries to customers.

How has COVID-19 impacted the beauty industry?

 

Online sales have increased

The closure of non-essential shops meant consumers have relied on buying many products online, with around 37.2% of consumers having bought health and beauty products online in the past year. Additionally, the prestige beauty industry saw sales soar to £491 million between January and October 2020 – a 38% increase from the same period in the year before.

Brands have made use of the digital platform

Many innovative brands have leaned into online sales as an opportunity to scale up their digital presence. Aveda produced a video series on Instagram giving advice on hair styling and care, which increased views by over 200% since launch. MAC’s online try on tool allows consumers to virtually “try on” eyeshadow and lipstick shades. This saw a 300% increase in consumers use since lockdown began.

New customers have moved online

The COVID-19 lockdowns have encouraged entirely new demographics to move online, including those who consistently chose to purchase in-store pre-pandemic. Many brands noted an increase in purchases from the ‘silver surfer’ population, as older customers began to look at beauty products and services online for the first time.

What will the industry look like after COVID restrictions end?

 

As the effects of the pandemic slowly lessen and restrictions lift, there are many questions about how the market will adapt. Will they gladly return to old ways of operating? Will some trends continue, and if so, which ones? And will new technologies or purchasing experiences continue to be developed?

Here’s five things that we predict might change in the beauty industry post-COVID:

1 – Online purchasing

Some consumers are likely to stick to buying online in future. The in-store experience is still enjoyed by many, but for others, its absence has allowed them to relax into the simple and enjoyable process of purchasing products online. As a result, a large share of purchases are expected to remain online.

Samantha Dover, senior retail analyst at Mintel said: “Although growth in the online beauty market was strong prior to the COVID-19 outbreak, it was slowing as retailers were struggling to increase engagement with the channel. However, 2020 marked a turning point as online demand surged amidst disruption. Whilst a reluctance to visit physical stores and an eroded in-store experience will benefit online sales for some time, retailers can more fully take advantage of the new reliance beauty consumers have on the online channel.”

2 – Subscriptions

A report from Royal Mail predicted that the subscription box market will grow in value by 72% by 2022, suggesting more beauty subscription services are yet to appear on the market. Products such as Birchbox and Glossybox have led the way, showing just how successful a beauty subscription box can be. In the past year, more brits have signed up to subscription boxes than ever before, with two in five consumers signing up since the pandemic began. Like other ways of buying online, the ease of the service means the subscription market is likely to continue to grow and benefit post-COVID.

3 – Personalisation

80% of consumers are more likely to purchase a product if the brand offers personalisation, and 90% state they find personalisation appealing, according to a study by Epilson. In an effort to replace the personalised buying experience consumers get in-store, retailers have provided website quizzes and virtual try-on tools to generate personalised recommendations. This popularity of personalisation is likely to encourage online retail to continue to provide the ability for consumers to get a personal recommendation before the purchase of a beauty product.

4 – Authenticity

Increasingly, consumers are looking for authentic brands with a clear and strong purpose. As such, beauty businesses have noted the importance of defining what they stand for. Since the beginning of the pandemic, the significance of brand authenticity has been particularly important, with brands increasing communication and starting to consistently engage with customers online. Brands are likely to continue the focus on these clear, genuine messages post-COVID.

5 – Transparency

Transparency of operations has become a priority for every business during every lockdown. For some, delays in the shipping of consumer purchases revealed weaknesses in supply chains, unable to react to the increased demand and alterations to the international supply network. Most importantly though, the COVID-19 pandemic has shown the importance of a flexible and adaptable supply chain, which can pivot easily as the situation changes. As a result, we can expect that many beauty businesses will be taking a look into their supply chains to identify weaknesses and invest in improvement in the most beneficial way.

For customers, the transparency of supply chains is vital, as they likely want to make an order with a business they can rely on. Many will also particularly want to support brand who use sustainable and ethical methods to make and deliver their products.

For more information on how your beauty business can continue to delight your customers post COVID-19, get in touch or call 01604 664 300.