As the COVID-19 pandemic continues to ravage the world, every industry, company, and business is slowly learning to adapt to new consumer behavior. 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 behavior has changed significantly as use of beauty products has declined: 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 $175 billion USD loss in revenue for the industry.
Consistent growth has been the signature of the global beauty-industry. In fact, it has been so resilient to economic turmoil that the financial crisis of 2007-2008 only had a minor impact on overall revenue. Yet, a global pandemic and health crisis seems to have a significantly different impact on certain sectors.
Changing consumer habits reduce revenue for almost all beauty products
The COVID-19 pandemic seems to have greatly changed consumer behavior. As work from home and significantly reduced social activity is becoming the new norm, there seems to be less reason to purchase beauty and skin-care products. Beauty routines are trending towards lessened use of makeup as a large part of the consumer base is required to work from home.
Consumer spending habits are trending towards large losses for the beauty industry as well. Skincare and makeup are experiencing a sharp drop in retail (-20%) with only personal care faring slightly better (-3%). Every tendency seems to point to McKinsey’s predictions: a large expected loss in yearly revenue for the beauty industry.
For the first time in decades, it seems that the long-term attractiveness of the beauty industry has been shaken up. How could it recover faster? Is waiting for the first quarter of 2022 necessary? Our answer lies in the digitization of the industry.