www.pitchonnet.com | June 19, 2020
Veni, Vidi, Vici: – ‘I Came, I Saw, I Conquered’, was first uttered by Julius Caesar, the Roman emperor. This is a quote that has stood the test of time for 2,000 years. Circa 2020 spring/summer it is Covid-19 saying these words, putting the world into a lockdown. A lockdown so staggering that it has paused the way consumers live, work, shop and consume.
In the past cosmetics, specially lipsticks and their sales have been resilient to economic downturns. During the great depression of 1929 to 1933, when the American economy was spiralling downward, there was a decrease in industrial production by 50%; however, the cosmetics industry reported a 25% growth in sales. In the recession of 2008, when people’s homes were being foreclosed, and they had to leave them, L’Oréal; the cosmetic juggernaut registered an increase of 5.3% in their sales. The 9/11 terror attacks destroyed New York City’s Twin Towers and began another round of America’s economic recession. Months later, lipstick sales had doubled in the United States. At this time, Chairman of Estee Lauder, Leonard Lauder claimed that the sales of lipstick were inversely related to the general health of the economy, thereby naming it the “Lipstick Effect”.
The beginning of 2019 saw the Chinese economy slip into an economic downturn. Despite this, the sales of the cosmetic industry saw a 116% surge, surpassing 2018’s peak of 92%. These incredible examples of the growth of the cosmetic industry during times of economic crisis were clearly attributed to the Lipstick Effect. As per this theory, anxious consumers continue to spend money on small luxuries during times of emotional stress to lift their spirits.
The Covid-19 Pandemic has tipped the world economy into a downward spiral hitting markets so hard, that one can’t help wondering when normalcy will return and how the return to normalcy will occur. The beauty industry has got altered as a result of this Pandemic, and here is what it could look like in the immediate future:
Lipstick Effect Replaced With The “Eyeliner Effect”
Right now, through the lockdown and its subsequent economic downturn, people are staying muzzled in their masks and reaching for their hand sanitisers while getting on with their everyday life. With masks being an essential part of our lives, do lipsticks even stand a chance to withstand this economic crisis? With work from home being the new norm, lipsticks will probably surface only on virtual appearances. Therefore, will we see a “Lipstick Effect” hold true post Covid-19, or will eye makeup take over the cosmetic shelves, introducing us to an “Eyeliner effect”? Consumers getting back to work and their jobs mean them going back with masks on. This will have consumers rushing to make up their eyes, the only part of the face that will be visible. One will see eye makeup probably coming along in new shades, styles and finishes.
Cosmetic Brands And Their Ingredients
Demand for luxury hand soaps, carry-in-bag hand washes will likely see growth opportunities. As a side effect of hygiene and hand washing, skincare products will also continue to grow. Consumer preferences will move to products that enhance protection and nourishment rather than simply make superficial changes. Consumer distrust in ingredients of these products will continue, and words like ‘clean’ and ‘green’ labels will see customers examining ingredient lists and questioning product efficacy. Brands and their composition will be looked up and studied carefully.
DIY Beauty Care
With the Pandemic came the shut down, and beauty salons where services are rendered may take a while to open up and when it does may see consumers preferring to stay away. As a result, there has been an upsurge of DIY beauty treatments. Covid-19 has also seen haircuts being bestowed out to family members and pets. Learning to cut, style hair and DIY products related to this would probably see growth in post Covid-19 times. DIY at-home hair colouring kits, nail care, and care in different beauty categories will most likely find new customers.
Additions To The Digital Natives – Senior Shoppers
The Pandemic has impacted the way consumers behave with regards to purchasing cosmetics. More than before, consumers will be shopping on direct-to-consumer e-commerce sites, brands’ websites and shopping friendly social-media platforms. Senior consumers who were tech shy will now begin adopting digital native behaviours and join the growing numbers in this group so that they can stay away from physical stores.
Tech-Friendly Product Development
Cosmetic industry players will also need to spruce up their backend tech infrastructure to be able to grab the attention of current and potential customers and translate their visits into sales. Consumers will appreciate organisations which prioritise their safety and hygiene concerns and organisation doing this using AI and ML will be seen as progressive. Tech friendly testing of formulations, discovery, and customisation of products will fundamentally disrupt the beauty category and will help organisations earn several new customers.
Pretty Protective Branded Mask Demand On The Rise
With an increased need for individual safety from the virus, as well as wanting to look good, consumers will be eager to accept branded masks with their logos and display it across their faces. Fashion brands are, therefore, quickly jumping into the fray to produce protective personal care products. Fashion label face masks are conveying the prestige of badge value and thus offering their own value proposition. In future, consumer face masks may increasingly be available in pastel shades, with pleasant flowery prints besides seeing sequinned and embroidered versions of the same. The future of cosmetics fashion could be integrating masks with makeup as well as outfits for “cool beauty with protection”.
The year of Covid-19, 2020, is probably one of the worst that the global economy has suffered to date. Though the beauty industry is a little better off than other consumer goods, it will alter this category remarkably. Today, many consumers strongly agree with the suggestion that they will reassess the things precious to them and not take things for granted. Many of them also say they will be more alert to what they consume and what impact it has. Perhaps in our post-crisis world, we will see consumers becoming particularly aware of the consequences of their choices, including those of what we will adorn our faces with.
- Prof. Supriya Chouthoy, Assistant Professor – Advertising & Branding
*Views expressed are personal.
Mintel Research – Global Consumer Trends