Covid-19 Impacts on Beauty Industry

Market and trends

The cosmetics market was unprepared for the pandemic just like many other industries that traditionally focus on offline sales. Before the COVID-19 outbreak online shopping accounted for only 15% of beauty product sales in the US, so the shot down of offline cosmetics stores could not pass unnoticed. This situation especially affected brands that don't have their own online store.

The full power of self-isolation was felt by the companies that sell their products to the beauty salons for professional use and through them for personal use.

Some brands put their new launches on hold, especially if they planned to sell their products mainly through the offline-retailers and to use events as a promotional channel. Mass cancellations of new launches negatively affect the total revenue of the industry as well, because new releases are a very important sales driver.

However, cosmetics sales are declining slower than clothing sales. According to Skypad, in April 2020 (in comparison to April 2019) clothing sales in the US decreased by 40%, and cosmetics sales --- by 30%.

During the quarantine, people need less clothing and makeup but the consumption of cosmetic care products and personal hygiene items, which are also included in the category, is growing.

Factors that affect the industry positively

- Demand for at-home beauty treatments as a replacement for salon treatments;

- More time for skin, body and hair care;

- Ability to use products with active ingredients due to spending less time outdoors.

Factors that affect the industry negatively

- Decrease in purchasing power due to the uncertainty of the future financial situation;

- A traditionally high share of offline sales due to customers' needs to test products or to get a professional opinion;

- Distrust of unknown market players (fear of fakes);

- Decreased demand for makeup (mascaras, foundations, etc);

- A more pronounced decrease in the demand for some product categories (for example, sunscreens).

Tips:

1. Brands should create their own online stores and motivate customers to use them

The main advantages of this approach are higher sales margins compared to sales through intermediaries and the ability to create a customer database, so their loyalty could be maintained through email newsletters and personalized offers.

Here are the examples of potential advantages of brand-owned online stores over intermediary stores for the customers:

- special discounts, including the ones for leaving contact information on the website;

- exclusive products that are available only in the brand owned store (limited collections, sets, bundles, refills);

- samples and miniatures as gifts for orders;

- unique packaging that adds some celebration atmosphere to online purchases;

- more convenient search in comparison to huge marketplaces;

- online assistance in choosing products.

2. Brands should create different digital assets with interesting content or unusual functionality

- virtual cosmetics testing;

- selecting suitable products (based on skin type, problems, color);

- unusual original content;

- 3D models of products, if they have unique design features.

3. Brands should experiment with promotion and find new channels and formats

- use AR-masks on Instagram and Snap Camera as a promotional tool (not only makeup try on);

- use influencers' creativity in your media campaigns;

- engage UGC, collaborate with novice content makers with a small audience and add their content to the brand's social media accounts;

- use gamification in communications with customers;

- enter new media: TikTok, podcasts, etc.

Cases:

1. EOS TikTok Strategy

EOS TikTok account screenshots

Eos published a long-term TikTok strategy. When the company launched ads there for the first time in September 2019, user engagement was 5 times higher than on Instagram.

Eos plans to double the budget for TikTok in 2020, while in 2019 their expenses on TikTok accounted for 7% of the total marketing budget.

The company uses gamification elements in their advertising campaigns. For example, for the Easter campaign, 15 influencers launched "Easter egg hunt" (Eos lip balms are shaped like eggs). They offered users to count the number of hidden eggs. Users had an opportunity to win a basket with the brand's products if they put the correct number.

2. Lancome Website

Lancome is actively attracting customers to order products from its own online store.

- The company offers product sets at special prices.

- Customers can get an online consultation with a brand expert on the company's website.

- Customers can virtually try on the brand's makeup products.

- The company offers gifts if a purchase exceeds a certain amount of money or if customers buy specific products.

- Lancme actively experiments with ads and promotes its website as a separate product.

This article is summarized by Go Mobile

Go Mobile is a mobile marketing agency that focuses on media buying, social media ads, campaign optimization, and ASO. We develop campaigns with strategic approaches and robust research to enhance the delivery of the message. Our mission is to help clients to achieve their marketing targets.