What will the beauty industry look like after the Covid-19 pandemic?
In a moment of uncertainty, when commerce closed and brands are trying to adapt with new online strategies, while trying to contribute to the crisis that the whole society is going through, a question arises: How will the future of the cosmetic sector be after Coronavirus?
As China slowly returns to normal, Europe, North America and South America, as well as other regions of the world, are witnessing an escalation of the pandemic, with stores closed around the world from both leading retailers like Harrods, as well as brands like L’Occitane, Lush, among others, as well as many thousands of small businesses and cosmetic brands.
Although some companies are adapting to this turbulent period, trying to target disinfection and cleaning products, the vast majority will feel a sharp drop in sales in the short term.
The question that arises now is how big could this break be.
While the food and grocery market will grow by 7.1%, non-food spending is estimated to fall by 8.9%, which means a worse fall than that caused by the 2009 crisis.
It is foreseeable that the most affected are the small shopkeepers and services such as beauty salons and nails, and that these are the ones who will have the most difficulty recovering from the crisis.
With a large part of the population at home, many consumers are already taking the time to try applying beauty products themselves (makeup, nails, hair, among others), which is already leading the major brands to launch more DIY articles (Do it yourself) on your digital communication channels.
This trend could accelerate what was already a trend before the coronavirus crisis, a much closer approach for consumers directly to the brand.
This reality may now open up an even greater opportunity than it was previously for digital channels and online sales.
It is also important to understand that the big brands expect that after the end of the crisis, there will be a great demand for beauty products, as social life will resume.
Inter Parfums announced today that, operationally, it is preparing to increase demand in the post-Covid-19 environment “, with businesses in Asia already showing signs of return”, which is confirmed by several brands that are starting to have strong demand from Asian markets.
Jean Madar, president and CEO of Inter Parfums, said:
“Our company is fundamentally strong. We have every confidence that, with our portfolio of prestigious brands, financial resources, global distribution network and our dedicated team and partners around the world, our business will once again grow and prosper. However, there are still many occurrences of global health crises and simultaneous business interruptions, and we hope this is only a short-term situation.”
But how can brands mitigate the impact?
While the virus continues to grow in many regions, beauty companies are exploring ways to make meaningful contributions through philanthropic initiatives, which will be positively received by consumers, and will increase the strength of brands.
Several companies, including LVMH, L’Oréal, Ormonde Jayne and more, have identified the opportunity to help contain the virus through the production of hand sanitizers, a strategy that many other cosmetic brands follow.
Likewise, several competent authorities worldwide are giving greater freedom to hand sanitizer manufacturers during the outbreak, offering companies that are not regulated as manufacturers of hand sanitizers the guarantee to produce alcohol-based hand sanitizers. .
Mintel stated that, with people’s hygiene as a priority, “there are opportunities for more antibacterial and antiviral products, hand washing, fabrics and new ways to carry out personal hygiene”.
The highlight of online shopping during the health crisis is becoming increasingly pronounced, as consumers look for ways to shop without risking infection.
Consumer surveys show that 7% of UK consumers have increased the amount of online shopping, according to Mintel.
Those who are quarantined or isolated can be encouraged to spend more time on their wellness and beauty routines to help combat boredom while at home, a strategy that is being followed for example by the brand, or activated through another types of strategies.
The important thing at the moment is that the brands do not stand still at all!
Even if at the moment there is a drop in sales, this is the time to rethink strategies, launch new internal challenges, increase presence on social networks, evaluate new markets, prepare products to enter other markets, redesign or launch e-commerce platforms, among many other tasks that during normal activity become more difficult to complete.