COVID-19 has severely affected the multi-billion dollar industry of beauty and cosmetics and rendered many workers out of jobs.
The coronavirus caused COVID-19 pandemic has changed the course of the world. No matter what corner you are at, which industry you work, it has affected them all. Beauty and makeup industry are not alien to it either. COVID-19 has severely hampered the import and export aspect of this industry. Moreover, with nowhere to go, people’s reliance on cosmetics have drastically reduced. This development was surprising given the minor impact and quick recovery from the 2008 recession. The beauty industry has always been a strong investment category. It is due to the provision of high margins, recurring purchase patterns, and general resistance to macroeconomic events such as recessions.
In China, as per a McKinsey report, the beauty industry fell up to 80 percent in February sales compared with 2019. In March, the year-on-year decline was 20 percent. This implies that the industry might be relatively resilient this time. Further, in times of crisis, the priority shift to low-cost products like lipsticks. Leonard Lauder coined the term “lipstick index” to describe the surge in lipstick sales seen during the 2001 recession. While stores sales are down, online ordered beauty products are swiftly increasing too. However, still, there is not much revenue or customer traffic to bridge the gap caused by negligible offline shopping.
Other associated problems faced by this industry include the closing of salons across the nation during the lockdown. This left many makeup-artists and hairstylists, without work and source of income. While small scale beauty companies went totally out of business. Events and launch campaigns were called off. The cancellation of key beauty trade shows such as Cosmoprof Worldwide Bologna, which showcases perfumery, cosmetics and packaging, and Esxence, Milan’s artistic perfumery show, was unexpected. The Indie Beauty Media Group called of their IBE and Uplink Live Berlin event, so did the Expo West 2020.
Apart from that, the supply chain of cosmetics and other beauty-related items have taken a massive hit due to lockdowns. Hence, it is clear that COVID-19 will likely leave a lasting impact on the billion-dollar industry.
Meanwhile, there also have been some intriguing new trends in this sector. Huge demand for protection and skincare kits, homemade beauty products, and online-streaming of new launches, to name a few. Beauty Influencers are keeping fans busy with their videos on DIY masks, skincare hacks, mani-padi at home and more.
These trends may not help the beauty industry now but also play a major role in shaping the future of itself. For instance, hand sanitizer brand Touchland built a 10,000-plus waitlist amidst coronavirus fear. It has sold more than a quarter-million units by now. LVMH, a fragrance maker, repurposed its perfume-making units to address the demands of sanitizer for French authorities and large hospital systems in Europe. Without a doubt, sanitizer is the new lipstick!
Even after complete lift-off of the lockdown restrictions, people will not step out of their homes soon. Thus accelerating the dependence on e-commerce sites and thereby pushing their growth. Brands in China are already ahead in the game with their live-streaming of product launches and campaigns for the customers in remote areas or stuck at home. Skincare brands like Kiehl’s are also looking to provide virtual consultations to guide users on the products as per their needs. Pfeffer Sal, a London based skincare clinic, offers consumers an ‘online skin MOT’ with a digital therapist. And, brands are working to gain increased consumers’ confidence by employing touch-free formats in packing their items. These comprise up of stick and spray setup and mentoring workers with tips and tricks to cleanse cosmetic products, which otherwise can be a house for germs and pathogens. Thanks to highlighting of sanitation and cleanliness in the wake of COVID-19.