Like multiple large-scale industries, the beauty industry has been forced to transform during the pandemic. Everything, from launching and messaging, to distribution, has radically changed. The COVID-19 stay at home mandate interrupted the conventional makeup, nail, and hair care routines of many people, primarily leading to the plummeting of the already decreasing sale of fragrances and color cosmetics. Conversely, products in the “self-care” categories of skincare, haircare, and personal care have boomed. The pandemic has opened the door to new beauty trends, and retailers around the world are innovating in their assortments to meet changing demands.
Unlike makeup, the pandemic did not interrupt self-care routines. Consumers today focus on self-care products to address conditions specifically related to Covid-19, such as acne breakouts from mask-wearing, puffy eyes, or dry hands. The pandemic also increased sales in already trending wellness products, including creams, masques, jade rollers, serums, and bath bombs. Additionally, natural skincare and makeup products are increasingly produced to satisfy the growing eco-friendly and ethically minded market. Multiple brands are turning towards natural ingredients, sustainable energy in production, and fair labor.
The stay-at-home mandate also forced many retailers and brands to innovate on how to reach their customers by making their products more accessible. Retailers have also had to adapt to the drastic change in e-commerce that has transformed to a completely different landscape compared to pre-Covid times. Before the pandemic, beauty product consumption was based in an in-person store where customers could try and compare different products and brands. During the pandemic, customers purchased beauty products online. In the 2021 State of Fashion Report, McKinsey predicted that media channels’ share of the beauty market will double from just over 10 percent in 2019 to almost 20 percent by 2021. Today, brands must focus their efforts on both expanding their online omnichannel retail presence and adapting their in-store strategy.
Retailers have to think harder about how to assess their market based on data collection. Having access to an increasing virtual global market allows brands to break from their previous demographic target market segmentation and to focus more on consumer personality. Additionally, digital consumers are better informed about news and trends, which pressures companies further to innovate to remain competitive. Technological innovation has proven to be a game-changer. Pinterest recently launched an augmented reality try-on tool that allows consumers to try on and compare lipstick and eyeshadow products from Lancome, YSL, Urban Decay, and NYX Cosmetics; Snapchat has a similar augmented reality try-on tool. Users are now able to interact with makeup products previous to purchasing unlike ever before.
As vaccination rates increase and the economy restarts, consumers have returned to many in-store beauty services around hair and nail care, and many consumers still feel the need for in-store shopping. Big brands, such as Sephora, Ulta Beauty, and Target, have tried to complement their direct-to-consumer (D2C) business by partnering and having pop-ups in department stores such as JCPenny and Kohls. Retailers are trying to lure consumers into the stores by making shopping more personal, more direct, and more available.
The innovation and adaptation that beauty retailers have accomplished exhibits how the market’s needs and wants is driving immense growth in beauty product sales. Today, the beauty industry is worth 511 billion dollars, and it is expected to exceed 715 billion by 2025. While these numbers may excite beauty brands and retailers, the sales challenge increases as well. As consumers start to purchase more products online through different social and retail channels and with more information, competition will surge and rapid innovation will become necessary.
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