Industry Analysis

Impact of COVID-19 On the E-commerce Beauty Industry

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We have curated eight additional pieces of information, data, and/or statistics surrounding how COVID-19 has affected eCommerce within the beauty industry. This has focused on overall sales and the industry as a whole. We have also presented 2-3 (when available) specific beauty company eCommerce performance data points in Q3 of 2020 for eleven global beauty companies. When Q3 was not available or was redundant, we provided the most recent quarter results, and if the full year was reached, we presented that data. These performance data points, when possible, are directly related to their eCommerce beauty (color cosmetic) business. However, we want to emphasize that there were cases where eCommerce stats and color only stats were not available separately.

Beauty Industry: COVID-19 Effects on the Industry (eCommerce)

  • Before the COVID-19 pandemic (2019 data), in most major beauty-industry markets, brick and mortar purchasing made up 85% of all beauty product purchases, with some shifts depending on the subcategory. When digging into age groups, those in the two generation cohorts of American millennials and Gen Z also purchased their beauty products 60% of the time in a store, rather than online. About 30% of the beauty-industry brick and mortar market was forced to shut down because of COVID. Some of these stores have been permanently shuttered, and new openings will likely be delayed for at least a year. This places eCommerce in a place that could see substantial growth.

Some beauty-product sales are shifting online, but the store still has a critical role to play

  • The decline in brick and mortar sales, while expected during COVID-19, are not being made up by increased online sales. “There are beauty-product brands that are reporting e-commerce sales twice as high as their pre-COVID-19 levels, but overall, McKinsey asserts that 20 — 30% growth will be more typical. According to this article in Glossy, Sephora’s US online sales are apparently up 30% year over year and Amazon’s beauty-product sales for the four-week period ending April 11 also reported that same percentage increase.” Looking at China, McKinsey research reveals that online revenues for beauty-industry players have increased between 20 — 30% during the pandemic.
  • While there certainly has been an increase in eCommerce sales with beauty products since COVID-19, the main barrier beauty brands have encountered with selling online has been the inability for the consumer to test the products, to look at the colors, and to experience the feel of the product.
  • When comparing high end nail polishes year over year, in the United Kingdom online sales of these products increased by twelve percent in the first week of March 2020 and continued on that upwards trend with the doubling of that figure after lockdowns were announced on March 23rd.
  • While each beauty brand will have their own unique COVID-19 story to tell about the economic impact, overall the general data shows that while there has been a reduction in overall revenue, along with that there has been a significant increase in eCommerce sales. Shiseido is one example of this as they experienced almost a 96% free fall in net profits during Q1 of 2020, but they did experience an increase of 25% in online sales in China. When looking at the cosmetic behemoth Revlon, they saw their revenue dip just over 18% in Q1, but their online sales jumped by 47%.
  • In the current climate, beauty “E-tailing” is doing extremely well. However, it is important to note that while lockdowns and stay at home orders have made it necessary for consumers to satisfy their cosmetic needs online, the demise of brick and mortar stores is not imminent. In fact, a study conducted by NPD Group in May 2020 reveals that almost 40% of consumers in the age cohort of 18-34 (Gen Z and younger Millennials) plan to buy beauty products to celebrate the end of lockdown and almost half (47%) say price promotion will be the key reason for shopping in-store.

 a study conducted by NPD Group in May 2020

  • When comparing year over year beauty eCommerce sales in China, growth of 87% in June 2020 was seen, compared to $1.3 billion in 2019. Makeup sales increased 58% to $102 million. Makeup’s growth was less impressive compared to other categories such as skincare, fragrance, and hair care, as it was negatively affected by the coronavirus almost immediately. Mandatory mask wearing outside made it less likely that makeup would be applied. However, as most offices opened in China, and people started to get back to normal, makeup started to increase its growth. “The continued use of masks is evident by the notable shift in focus from traditional lip makeup (12% growth compared to June 2019) to eye makeup (159% growth compared to June 2019).”
  • According to Stanley Kee, the Managing Director, APAC, The NPD Group, “[t]he e-commerce channel is likely to keep the fast growth rate in the coming months for beauty products. In fact, a recent China consumer sentiment study conducted by the NPD Group showed that 26% of Chinese consumers claimed they only purchase beauty products online. With another online festival, Double 11, scheduled for November, it is likely that sales from this event will help China experience record sales for the year.”

Beauty Industry: Company Performance Data Points

Beauty Industry: COVID-19 Effects on Consumers Purchasing Behaviors (eCommerce)

Consumer Perspectives on Makeup

  • Platforms like Microsoft Teams as well as Zoom have created a demand for makeup that has “a high impact on video calls.” According to Spate, as working remotely becomes the “new normal”, consumers are seeking ways to present themselves better on camera. Bronzers especially are popular, likely because of their use with both men and women. Google search volumes indicate that between the middle of February to the end of March, Spate discovered that “bronzer” questions grew by 220% to reach 33,350 searches. “Face bronzer,” “face cream bronzer”, “face bronzer brush” and “face bronzer stick” are four of the most popular search terms used.
  • Shoppers have had a change in purchasing behavior in Germany as a result of the pandemic. Half of all beauty shoppers surveyed admit their purchase decisions are influenced by promotions. For example, consumers reveal that free samples and free delivery for e-commerce are key criteria in the purchase decision. Additionally, 46% of beauty consumers report that they would go shopping without a specific product in mind.

Consumer Sentiment in Germany — COVID-19’s Impact on Food, Sports, Beauty, and Toys

Spain: Consumer Priorities as Recovery Progresses

online beauty purchases

researching and adding to cart

More Americans are buying cosmetics online during the pandemic than they were prior.

Reactions to wearing less color cosmetics during Coronavirus(% of those who are wearing less)

GLENN TREVOR
Glenn is the Lead Operations Research Analyst at Simple Manifestation with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

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