The global pandemic is and has been a life-changing event. What first looked like a temporary circumstance, evolved into a prolonged experience, and then transformed the behaviors we have in how we work, socialize, and take care of ourselves.
No matter how long a shutdown lasts or how many rounds it takes for an effective vaccine, we’ve already moved into a new normal. The lessons we’ve learned have changed our habits and routines. These shifts are due to realities on the ground, the necessity of products, and convenience in shopping.
This behavioral shift has affected the beauty and personal care industry in unique ways. Our commerce has changed. Our priorities are different. We are seeking out new brands to address new needs. Having helped to formulate our routines over the decades, brands of all shapes and sizes are working to adapt the old way of doing things to a new world.
The most consequential effect the pandemic has had on retail’s long-term prospects has been the seismic shift from in-store purchases to online alternatives. As stay-in-place orders were enacted, our reliance on grocery stores and big-box chains were strained. The convenience of doorstep delivery became apparent to many of us.
Retailers in a position to handle a surge in online sales — Amazon, among others — have seen explosive growth. Amazon has already seen gains through the first half of the year that dwarf the sales seen throughout all of 2019.
Online sales did begin to taper off as brick-and-mortar stores reopened, but the overall level of eCommerce is higher than it used to be and will likely remain that way for some time. One of the primary reasons for this is because we’ve already transitioned ourselves into a new normal.
Online retailers offer a plethora of benefits that complement our day-to-day obligations: free delivery, bulk discounts, the convenience of stocking up on toiletries without ever leaving the couch. It’s no longer an outlier to buy shampoo online, and so the end result is for CPGs to adjust operations and shift resources accordingly. Manufacturing capacity needs to be reprioritized, packaging logistics need to focus more on direct-to-consumer shipping, and distribution channels need to be evaluated for consumer demand.
In volatile economic periods, the personal care industry typically sees familiar (short-term) patterns. Consumers spend less on luxury brands. Unessential routines are shelved. Mass-market brands increase in sales, whereas small indulgences fall by the wayside.
We’ve already seen these patterns take place, but there are additional, more fundamental shifts coalescing for the long-term. These shifts are both positives and negatives for the industry. Brands will sell more online and less in stores. Some will be helped by this, and others will stumble. Category shifts — from the rising popularity of skincare to the decreased interest in makeup — will similarly result in different consequences for different brands.
Our industry is deeply hands-on, demanding that we discover new brands and solutions through touch, smell, and sight. Incorporating this into a digital experience can be difficult, and innovative marketing ideas (like free trials) can help bridge the needs of the future with the familiarities of the past.
As we solidify what our connected world looks like virtually and in person, and understand how the expansion of work-from-home changes our households, we will continue to understand the longer-term ripples for our industry.
Even in traditional downturns, the salon and prestige segments are two of the hardest hit when economies tighten. The Lipstick Effect notwithstanding, makeup brands this time have suffered on a dual-level. First, cutting back on finances means cutting back on the less essential (historically prestige and makeup). Second, the tectonic shift in work-from-home has led to curtailed use and a harder economic impact.
Brands can find comfort however, in knowing that beauty care companies have already been working on some remedies. When at-home pampering surged in the zeitgeist, subscription box services were ready to share their curations for the perfect manicure, skin rejuvenation, or hair transformation. Since the model was there to use, brick-and-mortar salons could create their own at-home kits, helping to weather any losses seen in the first two quarters.
Looking further into the future, CPGs with a diverse line of SKUs will be marketing complete product lines together as one-stop bundled solutions for a variety of demographics. It will also be prudent for all brands to emphasize subscription services, direct-to-consumer retail, and other online channels into distribution. Many companies will invest in reducing operating costs for these channels and improve upon the overall shipping experience.
The more brands can identify with the digital shopping experience, the more they will be able to find continued channels of growth.
Despite setbacks brought on by the pandemic, it’s clear that sustainability in our industry is not going away. While it’s taken a back seat to traditional packaging or product availability, consumers generally support brands that support the earth and will continue to do so. In the short-term, however, many less ardent supporters may be more concerned with getting products at a low cost than they are buying carbon-neutral brands.
However, in the long-term, packaging design will need to balance the hygienic benefits of traditional packaging with the environmental benefits of natural ingredients and recycled components. The future of packaging design will include a reduction of waste, limiting contamination use-after-use, and expanding more sustainable shipping options.
Expect reusable and eco-friendly products like refillable packs and bamboo materials to continue their rise (it doesn’t hurt that most of the time these options are also cost-effective). Brands and product types that fit well with this mentality will see their own popularity boost in response to this trend. Look at it as swapping the disposable razors and shaving cream for a nickel-plated blade and exfoliating shave paste.
Personal care will continue its push to be a leader in sustainable packaging (as opposed to one of the biggest contributors to waste). Innovation will address both our need to sustain and the realities of our new normal.
Collectively, we are more conscious of our physical well-being than we’ve ever been before. Not only have our days been consumed with information from public health experts and medical anecdotes, but we’ve been growing in awareness of what it means to put ingredients in and on our bodies.
We are more knowledgable about how personal care can help with, and in what ways it affects our welfare. Contact begets hand sanitizer, excess use of sanitizer leads to dry skin, which demands hand lotion. Cycles like these are what’s driving some segments in our industry, but they also highlight brands and the ingredients used to treat it.
Consumers want disinfectants that are effective and do not harm our immune systems. We seek out formulations that invest in natural ingredients that are responsibly sourced and sustainable. What this pandemic has done is put our awareness on overdrive, bringing every product we buy into focus.
Our industry will thrive with this mandate as we continue to bring innovation and ideas to the table. Global CPGs with internal R&D operations may have a head start on addressing these needs, but emerging brands will play a key role in the process as well. After all, it has long been our diversity in ideas and approaches that have helped drive beauty care forward.
Personal care has always personal, and we now can see that our personalities are all connected. Our industry may have been fundamentally changed by the pandemic, but we have the deep bench to innovate and formulate a way forward. Wherever eCommerce takes us, no matter how we modify our personal care routines, and even if we continue to set new goals for a sustainable future, we will continue to innovate the products that move us. In personal care, it’s what we’ve always done.