Covid-19 impact: Can the world of beauty and cosmetics prove resilient?
Coronavirus quarantine is upending the beauty routines with people barred from hair and nail salons, waxers, barbershops, and beauty stalls. Given the realities of physical distancing and mask-wearing, the hygiene game is stronger than ever. Here is a glimpse of the impact of Covid-19 on the world of beauty and cosmetics in the near future as seen through the recent past!
With the closure of a myriad of beauty-product outlets and dwindling first-quarter sales, the beauty and cosmetics world has been appalled by the Coronavirus mayhem, something much similar or greater than the 2008 financial crisis. Based on the scenarios most expected by global executives and current trends, McKinsey & Company estimates that the global beauty-industry revenues could fall 20-30 percent in 2020. Nevertheless, just like the industry created generations of loyal consumers and fully bounced back by 2010, there are signs that the beauty and the cosmetics world may once again prove relatively resilient.
*The figures are in USD Billion and may not sum to 100 percent, because of rounding. Source: Euromonitor
Shape up or ship out
It's a long fight and things will slowly fall back into place, especially for sectors where physical contact is inevitable. With a 55 percent decline in premium cosmetic brands purchasing, versus a year ago, the retailers and brands are now turning to promotions to bring in consumers via online platforms. With some stores permanently shut down, and other new openings delayed for at least a year, there are some brands in the world of beauty and cosmetics that are adapting to the changes and the repercussions of the pandemic actively. Here are a few examples to illustrate the dynamism of these brands:
L'Oréal
To surpass the season of lockdown and keep a tab on its customers, L'Oréal Paris India used its YouTube channel to create engaging content under a series named ‘Lockdown Binge’. The series features videos that can be handy during the lockdown period like tutorials on coloring hair at home. Ensuring the safety and well-being of customers and employees along with safer operating procedures another initiative of L'Oréal was its ‘Back to Business’ hygiene and safety guide, targeted to be distributed to its 45,000-strong salon network and over 1,70,000 hairdressers, ahead of lockdown restrictions being lifted.
Kaya Clinics
Kaya Clinics, the Marico’s salon brand has also buckled up its shoes to combat the Corona mayhem. Following the trend, Kaya has also pivoted to emphasize on e-commerce, e-payments, and virtual appointments to keep their businesses going with a constant check on hygiene and safety norms. The interesting outlook adopted by Marico is the daily video consultations from the experts which assist in adopting dermatology approved skincare, haircare, and any stress-related allergy measures at home.
SUGAR Cosmetics
With the retail industry gradually opening up, SUGAR Cosmetics has already started seeing a steady rise in sales through their brick and mortar stores. The company has taken all the measures and stepped on its safety and hygiene standards in line with WHO guidelines. It has even banned the use of testers and replaced it with physical ones embedded with Augmented Reality technology to give its customers a real experience. With customers indulging in me-time and focusing on mask-friendly makeup, SUGAR Cosmetics has armed itself with transfer-proof and easy-to-use products to bring salon-experience at home!
Lakmé Salon
To ensure the social distancing requirements, Lakmé Salon, a part of Hindustan Unilever, has also taken prudent steps towards re-engineering the customer experience journey across all touch-points, thereby making it a mandate to use the Aarogya Setu app for its salon teams and customers. Besides getting equipped with masks, visors, gloves, and single-use kits, Lakmé has also increased the use of biodegradable disposables. Another major impact of Covid-19 in the world of beauty and cosmetics, not only adopted by Lakmé Salon but by other premiere beauty brands is virtual try on products, contactless billing and payments, and contactless home delivery for post-care products.
Shifting trends in the world of beauty and cosmetics
The beauty and cosmetics industry commiserates with the gravity of the issue and is trying to embrace the changes this pandemic has got along. Being positive and hoping for things to get better eventually, the industry is ensuring the utmost safety for both, the customers and staff. As a result, some trends are emerging as a big area of pent up demand. Let’s traverse the changing trends and see how the world of beauty and cosmetics is faring under the circumstances.
The roaring market of soaps, sanitizers, and disinfectants
Due to the onset of the pandemic, the hand sanitizer market shot up and witnessed a growth of 53 percent in February 2020. In fact with country-wide lockdown, panic buying led to the complete unavailability of sanitizers and disinfectants. They have a lion’s share in the beauty industry with the personal hygiene market pegged to cross USD 15 billion by 2023, and the hand sanitizers segment to be worth more than INR 2000 crore by the year 2025. Many beauty brands like Kaya, Vilvah, MamaEarth, HUL, and L'Oréal among others have risen to the occasion and are selling and donating hand sanitizers to those in need!
The newbies: Virtual events and online sales
After the cancellations and postponements of beauty and cosmetics industry events, the brands are now shifting to virtual events to keep everyone connected during the quarantine times. Consultations, guide books, and tutorials are becoming computer-intensive and companies like MAC, Clinique, and Neutrogena, are also dedicating AI to customize user experiences and create products that appeal to deliver real-time experience. However, according to a survey by McKinsey & Company, the physical stores still have a critical role to play, with beauty products sales shifting online.
*The numbers represented are in percentage and the figures may not sum to 100 percent, because of rounding. Source: McKinsey New Age of the Consumer Generational Survey 2019
Female hygiene products making their way
The world of beauty and cosmetics is seeing a shift in the focus on female hygiene products. With the market for feminine hygiene products predicted to reach USD 522 million this year, a lot of start-ups are also diverting their production into toilet seat disinfectants, eco-friendly sanitary pads, menstrual hygiene products, and surface disinfectants. Owing to increasing health consciousness among consumers along with the pandemic precautions, this stands as a lucrative opportunity for manufacturers to invest in the production of these products and strengthen their market position.
Dire strait of the goods and services sector
Extremely fragmented, the Indian professional beauty and wellness industry has grown at a CAGR of 12 percent in the last decade and values INR 25,000 crore. Buzzing high with great potential, the retailers, salons, and spas are nevertheless facing a real disruption. The business owners are taking steps back into the game by assuring that their staff wear PPE kits, thorough sanitization, and making arrangements to cater to clients at home if someone is urgently looking for services. With the wellness industry facing the fear of the human touch, some professionals are acknowledging the fact that the industry won’t see much improvement by the year-end!
Way forward
Trends come and go faster than we can imagine and 2020 shall remain the worst year for the world of beauty and cosmetics has ever endured. But in whichever way Covid-19 impacts the industry, the future will be bright and the industry will bloom once again backed by government initiatives, and industry and community collaborations to build a strong ecosystem. With innovation and inclusivity all set to drive the beauty industry, the new landscape will follow the footsteps of 2019, aka the 'year of sustainability'. Recycled packaging and green and vegan ingredients will continue to be the go-to! Succoring their brands, the companies will batten down their business by considering adjacent and non-adjacent categories to venture into.
However, a critical point to consider before jumping to any conclusion is the awareness of social distancing and Covid-19 prevention norms. Yes! as we step into a world where we cannot throw caution to the wind, the local stores look at the bleak future. Battling the pandemic is, however, not a breeze for them. And this can be a huge opportunity for the bigger brands to break into the share held by the local salons. With this, the most perplexing question still remains unanswerable - whether this share can be sustained in the long term, or not?
Well, only time can tell the answer to this. But after addressing all the dimensions, it can be said that we are paving the way for a more inclusive world of beauty and cosmetics, which is ought to become even more fun and experimental post-Covid-19. Because, above all, consumers will always find comfort in self-care time as ages may come and go.