COVID-19 Changes Cosmetic Industry’s Business ModelBy MBN Staff | Wed, 04/15/2020 - 18:41
COVID-19 has taken a toll on the retail, fashion, and beauty industries. Its disruption is evident in many areas and has certainly caused ripple effects from production to sales to distribution.
At the beginning of the pandemic, beauty brands suspended in-store treatments and services, but as COVID-19 got worse, they have since been forced to shut down retail stores entirely. Salons and spas have also temporarily suspended operations. Now, the beauty industry is doing all it can through e-commerce to combat the loss of brick-and-mortar sales. Many beauty brands have already invested in online operations and some of the biggest names in beauty use a direct-to-consumer business model.
According to EConsultancy, “product purchases aren’t the only reason consumers head to beauty retail stores. Rather, it is often the experience before buying that drives conversion, such as beauty demonstrations, expert consultations, and other in-store services. Conversely, beauty purchases can also be spontaneous or ‘impulsive’, which also may not align with the e-commerce experience.” Because of this, the change in the business model is such a big challenge for the industry.
In addition, a change in the kind of products preferred by the consumers has appeared. Beauty products considered safe, trustworthy and comforting will see a sharp rise in demand in the aftermath of the COVID-19 breakout, with the possibility of color cosmetics demand decreasing, while hygiene and skincare will drive sales forward. With expanding sales of soap and hand cleansing products, personal care companies are facing a big opportunity to offer additional related benefits to consumers.
Following this trend, companies focused on hand sanitizers, wipes, and toilet paper may see unprecedented growth earnings. For example, hand sanitizer brand Touchland has a 10,000-plus customer waiting list amid COVID-19 fears and has sold more than 250,000 units. Online sales of toilet tissue soared 186 percent, while purchases of canned goods and other non-perishable foods rose 69 percent, as noted by Adobe Analytics.