How Corona changed cosmetics

COSSMA: How has the cosmetics industry dealt with the restrictions of the pandemic?

Andrew McDougall: A numbers of companies announced measures to tackle the loss in sales from the outbreak. Some companies, like Revlon, furloughed some employees in February, 2020 and asked others to work reduced hours, whilst the  executive leadership teams have also reduced their base salaries. In April 2020, L’Oréal delayed its annual general meeting to the end of June, and after showing confidence in outperforming the market back in February is now preparing for a bigger impact. From a retail perspective, high street retailers have faced huge uncertainty with shop closures during restriction periods, consumer anxiety to go back into stores, and there is a change in the in-store environment, which was

important for product discovery in the prestige sector. We have seen that some companies are benefitting from a surge in online sales. The Hut Group has created more than 500 new jobs across manufacturing and distribution in response to the demand for health, beauty and nutrition products across its brands. Whilst the company planned to hire later, the pandemic has pushed the plans forward.

Which areas have struggled the most and who has come through the crisis relatively well so far?

The Covid-19 outbreak has driven significant loss in value for the beauty market in 2020 as the lockdown period has not only limited retail sales but has also affected usage habits. Whilst some categories such as skincare will see growth, this won’t be enough to offset losses in other sectors. Indeed, categories like colour cosmetics and fragrances will take longer to recover, as the recession will mean that price sensitivity will fuel the popularity of masstige brands and cause a shift in purchase behaviours. The crisis will also accelerate the trend towards transparency, as health and safety concerns remain paramount for consumers going forward. Retailers and brands will need to find new methods for trials and sampling.

Which regional differences are recognizable?

In Europe, we have seen ups and downs for beauty and personal care, and with new restrictive periods being put in place in different countries, it is still an ongoing situation. Financially, many beauty and personal care players are faring well, although there is still a lot of uncertainty. In North America, cases have

still been rising and although in some cases sales are holding steady or increasing, there have been supply chain obstacles. In APAC, many countries seem a lot more advanced in their coping strategies for Covid-19. Physical retail is faring better than in other regions. In China, perhaps the experience of going through pandemic outbreaks more recently has put them in a better position to handle this one.

Has the pandemic spurred creativity?

Companies have had to adapt or modify plans to meet the new needs of the consumer. We have seen beauty habits change as online sales grow and in-store sales decrease. Brands are targeting consumers more on digital platforms as that is where the audience increasingly now is. Some products, such as dry shampoo, are being repositioned for the ‘next normal’ of working from home. Some categories, such as beauty tools, were already growing prior to the pandemic, but are now accelerating further as self-care trends increase further.

In skin, there has been a focus on blue light skincare as we spend more time in front of screens, and in hair products, those that help to maintain or preserve colour, for example, are becoming more popular.

Which examples do you remember most in this context?

Lush launched a ‘self-timing soap’ that dissolves away after 30 seconds of vigorous use, precisely how long it is advised to clean hands safely. UK-based start-up i-bient created an infused system of aromatic essential oils that can be attached to masks etc. to transform the experience of facemask-wearing, as well as other things we wear, into an intimate sensory system of natural fragrances. And beauty company Meiyume also created a touchless sampling tester to create safe and hygienic in-store environments. The device is motionactivated and can dispense any type of fragrance or liquid skincare product. The touchless tester display is easily adjustable depending on the size of different tester bottles.

To what extent were the companies still able to implement plans?

We have seen many businesses come together from the outbreak, as a number of companies, have launched initiatives to support small businesses in an effort to help them through the pandemic – announcing plans to freeze payments, developing plans and guides for reopening salons, and applying more focus on helping with hand sanitiser, masks. Several companies are helping the effort against Covid-19 and will be remembered for this in the longer term, particularly as BPC is the sector where consumers are most likely to consider how ethical a brand is before buying. The use of virtual consultations and live chat is also being implemented to help brands engage with consumers. Deciem and Kiehl’s are among the businesses launching one-on-one digital consultations, to keep employees employed, and help customers find the right products; while hair brands have also been introducing live online tutorials to guide people through hair styles and colour.

Which trends emerged in 2020?

The unprecedented arrival of Covid-19 is accelerating demand for safe, transparent and functional products. A stronger focus on health and safety is also leading to increased scrutiny over ingredients used in products. As a result, consumers will expect brands to be transparent about ingredient sourcing and the production process to ensure products are safe. Since the onset of the pandemic, preventing the spread of germs has become crucial to say the least; therefore, the biggest impact of the viral pandemic to the BPC market has been within preventive categories, namely hand sanitiser and soap. Until the virus is under control, consumers will continue to be hypervigilant of their hygiene, fuelling continued demand for personal hygiene products.

While certain elements of beauty and personal care routines slid during the pandemic, other elements, particularly those associated with self-care, became a greater focus. The anxiety and loss of normalcy in today’s Covid-19 environment can have a profound impact on consumers’ mental well-being, leading some to seek de-stressing solutions and products more than ever. Incorporating ingredients that promote stress relief, such as mood-boosting essential oils, into products will stand out to consumers seeking simple wellness solutions.