It’s almost been 2 weeks since most of the United States has been under social-distancing and quarantine. So far we’ve experienced the shuttering of most non-essential businesses across the country. We all have a lot of questions about how to move forward and how to pick up the pieces when this is all said and done. The reality is that most things will be very, very different. The beauty industry will definitely experience a sea change.
As it stands today, all beauty professionals from makeup artists, salons and retailers are shuttered. Sephora and Ulta have shut down most, if not all, of their stores. Other brands, including Glossier, Goop, Benefit, Winky Lux and clean beauty brands Credo and Follain, have all temporarily closed stores as well.
Many are looking to China for indicators as to how American consumerism will rebound after COVID-19 is behind us but what I think many are missing is the drastic cultural differences between China and the West and how each phycologically react to national events where sickness and death are dominating our mental and emotional attention. Depending on the severity of COVID-19, I think it is a big mistake to assume that Americans will go back to business as usual., especially considering the economical impact to individual households.
ARE PEOPLE GOING BACK TO THEIR OLD HABITS?
A lot depends on what the outcome of COVID-19 will be. Peoples future actions are dependent on the total number of cases and deaths. Currently, opinions around the seriousness of COVID-19 vary drastically throughout the country. The more people that begin to have close friends and family who fall victim to COVID-19, the less likely they will be to pickup old habits they had prior to the outbreak, i.e. patronizing a nail salon that’s priced 20% below the competition that also happens to be less sanitary, the unlicensed hair salon, the barber that works out of his basement or the makeup artist that doesn’t keep a clean kit.
The impact COVID-19 has on services that require intimate and close physical contact will likely be game changing. If the virus suddenly goes away with minimal casualties, than this "pause" on intimacy may just be a blip people forget about and carry-on as the once did before the outbreak. However, if COVID-19 hangs around, causing many casualties and traumas, we're likely to see a complete shift in the way people engage with service providers in the beauty industry.
MEGA RETAILERS WILL PIVOT TO DIGIAL FIRST
As of this week, e-commerce buyers are taking a “week by week” approach buying what they think they will sell in the near future. Many brick and mortar brands with an e-commerce presence are shifting inventory from store distribution centers to fulfill e-commerce orders. Others such as Nordstrom are pulling inventory from stores. Ulta Beauty has a mandate to reduce inventory levels.
Once the dust has settled, I believe retailers such as Sephora and Ulta will pivot to e-c0mmerce first, closing upwards of 80% of their store. Boutique retailers will consolidate their brick and mortar presence, focusing on areas with density, tourist attractions and iconic locations such as Los Angeles, New York City, Paris, Tokyo, etc. but e-commerce will be their main focus and their main revenue source. COVID-19 will completely eliminate the in-store “try-on” and makeover experience. Beauty tech will finally get the front seat, that’s been long over due in terms of replacing the “try-on” experience. In the digital space affordable brands win over prestige brands which I believe mega retailers will quickly learn and adapt.
Brands will need to rethink how they produce experiential events. Many simply will not, deciding to put more resources into digital marketing and influencer marketing. Those that do hold live events will mainly do so with a “Live to tape” mindset, meaning that these events will happen for the purpose of photographing and filming to distribute content at a later date. These events will be invite only with very restrictive measures.
Many are already speculating about the changes that will be implemented around the restaurant industry such as temperature checking upon entry and so forth. I think there will similar standardizations across industries moving forward.
Most beauty service providers are small business owners. Makeup artists, hair stylists, manicurists, lash artists, estheticians are all respectively out of business but what will it take for them to go back? As fo this week, there’s a 50% drop across the whole industry. The Stimulus Bill won’t be enough to help these business owners and solopreneurs return to work as their entire industry has been flipped on its heels.
In the interim, some of these artists will find new revenue streams in the digital space, teaching online lessons via video platforms and social media but with most of that part of the market already saturated by social media personalities and influencers; it’s highly unlikely that this platforms replace the client base and revenue streams these service providers once had.
In the long run, these businesses are looking at an uphill battle plagued with the possibility of new regulatory standards geared towards cleanliness and hygiene. Procedural services such as Botox, fillers, and laser treatments will decline dramatically not only because of the decline of availability but also because consumers won’t want to splurge on these types of services. I think there will also be a tone of reckoning in which consumers interests will be redirected more towards “clean” and “do it yourself” beauty solutions. Those that continue seeking beauty services will be because there is a real relationship between the professional and the customer. There is established trust, not just a deal promoted through an Instagram ad.
Look back at history, there's a time for frivolousness and there's a time for minimalism, conservatism and so on. We're past much of the over the top stuff and now will start seeing people scale back in more ways than one. We don’t know how long or how deep this is going to get but I think it’s valuable to prepare for a different world on the other side of this. The beauty industry will change because consumers will change.