Global beauty industry estimated to lose US$175 bil

AS the COVID-19 pandemic continues to ravage the world, industries that previously enjoyed consistent and sustained growth worldwide are now faced with new challenges. Beauty and personal-care is one such industry as it is expected to shrink for the first time in over a decade.

According to data acquired by Fraicheur, consumer behaviour has changed significantly as use of beauty products has declined, where 90% of women state they use little to no makeup while working from home.

Consumer retail spending on beauty products is experiencing a sharp decline (up to 20%) as well, leading to an unprecedented projected US$175 bil loss in revenue for the industry.

This is mainly caused by the significantly reduced social activity becoming the new norm and beauty routines are disrupted as a large part of the consumer base have adopted the work-from-home method.

Data also showed that skincare and makeup are experiencing a sharp drop in retail (-20%) with only personal care faring slightly better (-3%).

As most industries are moving quickly towards online sales to adapt, the beauty industry may be faced with challenges in following suit as in-person consultations are a large part of the sales process.

Moving consultations online or removing them entirely is bound to create new challenges and issues. Other key aspects of beauty such as testers for fragrances only compound the difficulty of digitising sales.

Yet, innovating in the digital space is the only way to speed up recovery. As consumers trend towards shopping online, beauty industry players report that their e-commerce sales doubled or even tripled.

Over a third of consumers state that they will continue shopping online for beauty products after the pandemic subsides and retail stores reopen.

In an industry wrought with e-commerce challenges and a large preference for in-person sales (pre-COVID-19 retail accounted for more than 70% of all purchases), innovations in the digital sphere could provide significant aid and help recover the sector quicker.

Moving online has become a necessity in an industry where products require interaction and consumers prefer in-person consultations. Providers and producers now have one goal: innovation.

Figuring out an ingenious solution that would draw in customers, new and old, would be the saving grace for those hoping for a quick recovery. – Nov 6, 2020

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