Our hearts at Revieve go out to all the people & businesses affected by the epidemia. Together we'll be strong and shall overcome the current & upcoming struggles we'll face!
This being a post to LinkedIn and us working around the beauty commerce, I wanted to take a look at the crystal ball to do some predictions where the industry is going in short- and long-term. As a wise man once said: "During the great struggles, the greatest new ideas are born".
Your thoughts and any alternative predictions are welcome and valued!
Short-term effects on beauty commerce
Lock-downs and restrictions are and will be our everyday life for the next coming months but people still need to get at least the basic necessities and who couldn't resist some online shopping too?
In beauty one clear winner in short-term will be the ones keeping their doors open (not because they just decide to but because people need their other-than-beauty services), especially meaning pharmacies, grocery stores and similar everyday-essential stores. The only thing you might be doing in coming months in terms of physical shopping is groceries and pharmacies. With the only outside-home visit, picking the much needed skincare product or an eyeshadow to impress some co-workers & customers over the video conference will be something that will surely boost the sales of these types of companies. Some cosmetics categories will surely hurt but I would predict that companies like CVS and similar will see some boost in their skincare sales and similar categories. What do you think?
We all know that online will see tremendous growth also in beauty (even from our analytics we can see the trend from the latest couple weeks) and companies are finding new ways to serve their clients better online. Still actively many companies struggle to get goods delivered with shortages on staff and growing amount of orders but once the business adapts in coming months, sales will surely see some growth across categories online. Despite the online growth, it won't replace the volumes made in brick and mortar and even companies like Estée Lauder Group are still digesting what will happen to the double-digit growth that was expected for this financial year.
What companies have started doing already? Some beauty brands in China & Wuhan are closing stores and moving their beauty advisors online to WeChat, some retailers are connecting beauty advisors to their online webshop with modern technologies and some customers leverage beauty technologies like Digital Beauty Advisors to offer the same level of personalization when the human resources are just not enough and scalable for their large volumes or currently growing traffic. In short-term it will be a combination of tech and human touch that tries to provide the similar level of individualization that you can get in the physical stores. Interesting to see where the future evolves, we'll surely see a lot more beautytech applied to replace the in-store experiences.
It's also going to be interesting to follow one segment of the beauty commerce, specifically meaning direct selling companies from larger corporations like Oriflame and Mary Kay to smaller ones like L'bri. How is their business affected by the crisis? These companies and their consultants are more and more doing their business via digital means (vs. the traditional Tupperware home parties) and now that people are looking the make ends meet while staying home, this could become a growing market in the beauty.
Predictions for long-term
The foot-traffic to retail stores has been in decline overall for a decade and even if things would turn to better soon, just a couple of months wont' be enough to return the trust of the consumers and 2020 will most likely be known as an all-time-low in terms of store traffic across the whole world.
Imagine going back shopping skincare or makeup to a retail-store where the typical approach is to touch & try-on physically the sample products. Even if governments would say that the virus has been completely controlled, the consumer trust and mindset has surely changed beyond just 2020 and we (at least some) will avoid this type of behaviour for some time.
Technology can and will surely help consumers in retail stores and I wouldn't be surprised if retailers start deploying even more solutions around image based skin diagnostics, makeup & haircare virtual try-on and other type of innovative technologies to allow consumers to experience the products digitally in stead of traditional testing. New hardware like smart mirrors or tablets might be difficult for consumers to digest (as people might avoid touching dirty surfaces) so leveraging consumers own mobile or fancier touchless smart mirrors might replace (and have already been replacing) touch interfaces in the stores.
If beauty in-store retail stores still today account for 90% of the beauty commerce, my prediction is that this will forever change. The ratio surely won't be 50-50 in long-run but more close to 20% online than the current figures.
What are your predictions for the coming months and years?
Hoping you all readers to stay healthy and safe! Meanwhile, keep playing conference call bingo, bet you can get multiple bingos during a week!
Miikka Makio, SVP of Strategic Partnerships at Revieve