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    Expert's Opinion

    What Will 2021 Hold for the Beauty Industry?

    A look at the effects of the pandemic on consumer behaviors -- as well as retailers and brands.

    What Will 2021 Hold for the Beauty Industry?
    The author, Elle Morris
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    Elle Morris, CEO, SnapDragon12.10.20

    As a beauty junkie, one of my greatest joys in life is the retail safari – sashaying into Sephora, Ulta, Blue Mercury – and exploring the latest and greatest the category has to offer in skin care, cosmetics, fragrance and hair.

    Applying new shades from unique palettes created by renowned brands or Indie brands brings a rush like nothing else. It’s a mini vacation to spend an hour in one of these retail shrines.

    Each is constantly evolving and innovating to deliver an enhanced retail experience to the beauty consumer – from live makeup artist lessons in-store to special events with makeup artists – there is always something to look forward to.

    That is, UNTIL COVID-19 HIT.

    When Our World Changed 

    Suddenly in March 2020, our entire world changed. Then, the only retail that many of us experienced were mandatory trips to the grocery store or drug store.

    Retailers everywhere were closed. On top of it, we were all locked in our homes for months – our lifestyles changed within that timeframe. We wore comfortable clothes working from home.

    For many, beauty routines became moot. Lipstick and lip-gloss were no longer staples when we did leave home because our masks covered the majority of our faces. The Beauty Industry, like many other industries, was set back on its heels from the onset.

    Beauty Innovators

    The big innovators in beauty during this mandatory retail reset have been the boutique brands.

    Credo, a nine-store clean beauty retailer, completely changed its model to meet the challenges of the novel corona virus pandemic.

    Rather than laying off its employees, Credo made an investment in retraining their associates to assist and sell to its consumers via online chat. They created virtual appointments with consumers interested in swapping out their traditional makeup products for clean beauty products.

    With consumers spending more time at home and shifting their focus to better well-being versus appearance only, this gave Credo an opening to build their new consumer base with shoppers who had previously shown little interest in clean beauty.

    While online purchases have increased in 2020 versus 2019 because of the virus, it’s not enough to offset the loss at retail.

    According to McKinsey & Company’s May Beauty Report, some beauty-product brands and retailers with inventory and shipment operations ready to scale up are reporting e-commerce sales twice as high as their pre-Covid-19 levels. (photo above: a screenshot from this report.)

    Overall, they estimate 20-30% growth will be more typical. Sephora’s U.S. online sales are reportedly up 30% versus 2019, as were Amazon’s beauty-product sales for the four-week period ending April 11, 2020. This reinforces the need for all beauty retailers to look at survival long-term particularly if their brick and mortar sales are non-existent until the pandemic is quelled.

    Based on region, some beauty retailers have reopened their doors with strict safety protocols for their consumers. Temperatures are taken at the door, masks are required, there is no longer any sampling or touching any of the products in-store. Consumers must engage a salesperson to ask questions as there is no physical engagement with product.

    What Will 2021 Bring?

    2021 will bring more online beauty consultations with retailers, and artificial intelligence will become mainstream. More retailers will leverage AI to curate consumer product preferences to proactively bring new and different product offerings to their attention via customized online engagement. 

    A positive outcome of the pandemic is the further buildout of the online beauty community. Beauty consumers relish engaging with each other in retail spaces—be it through shopping with friends or getting an opinion from another shopper.

    Missing out on this experience has caused them to more actively pursue relationships with other beauty consumers and experts online – there are numerous communities on the various social media touch points that give consumers the encounters they seek with other beauty fans. (See Korean Beauty Fanatics on Facebook, Makeup Box on YouTube, Beauty by Mikayla Jane on Instagram or her channel on TikTok).

    While we may not see much of the inside of beauty retail in 2021 until the Covid crisis clears, we can count on the industry stepping up with new ways to meet our needs through online innovation.

    It will be a year of continuous challenges for the industry to meet our ever-changing beauty needs based on how we as consumers respond psychologically to the virus and the changes that it brings.

    ABOUT THE AUTHOR
    Ms. Elenita (Elle) Morris is President & CEO of SnapDragon, a minority and female-owned and led global brand design consultancy. 

    Follow Elle on LinkedIn.

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