Copyright © 2021 HPCiMedia. This publication may not be distributed without prior permission.


COUNTRY HIGHLIGHTS


US


In the US, bricks-and-mortar not only remains the largest sales channel in beauty, it will


be a key factor in its recovery, says The NPD Group’s Beauty Industry Adviser Larissa Jensen. But there is no denying that convenience has become a bigger driver to where and how consumers shop for beauty products during the pandemic, says Alexis DeSalva Kahler, Senior Research Analyst, Retail and E-commerce at Mintel. “Consumers are shifting their purchases online. Beauty is a purchase that has traditionally been fulfilled more in stores than online, given its tactile nature, but as a result of the pandemic... many are more comfortable buying online.” According to The NPD Group, prestige beauty sales declined by 19% to $16.1 billion in 2020 but the online channel experienced rapid growth. In terms of the total market, Amazon and mass merchandisers were the top shopped channels/retailers for beauty, according to Mintel, with DeSalva Kahler explaining: “Such retailers likely benefited from consumers doing more online shopping and shopping their stores for other essentials.”


Speciality retailers such as Ulta Beauty and Sephora and drugstores also grew in terms of e-commerce beauty shopping, while online sales at dollar stores declined slightly from 2019. “This was presumably because consumers were doing more shopping at other essential retailers during the lockdown, and e-commerce capabilities may be more limited at dollar stores compared to other retailers,” says DeSalva Kahler. So how can retailers further build on the gains that have been made in e-commerce? “The opportunity is to evolve the digital experience to aid consumers’ research and inspire unplanned purchases. Consumers will turn to digital content and virtual tools to assist with research and exploration of products,” says DeSalva Kahler. “Activities such as viewing a tutorial or checking social media are something more than 50% of beauty shoppers do, at least on occasion. Offering enhanced product searches and virtual features (eg live chats, tutorials) can provide consumers with the expertise they would normally look for in-store and helps them find the products that fit their current needs, as well as introduce them to other items that could prompt purchases even if they’re not a necessity.” For Ulta Beauty, the future of retail “lives at the intersection of digital and physical experiences,” a spokesperson tells Cosmetics Business. “As the retail industry continues to evolve, we remain optimistic about the opportunities as we emerge from the pandemic. We are focused on engaging guests in new ways, fueling discovery and reaching a new swathe of beauty enthusiasts in complementary markets, especially as digital and physical experiences continue to blur.”


cosmeticsbusiness.com


CHINA: TOP 3 ONLINE AND OFFLINE BEAUTY RETAIL DESTINATIONS


Online platforms 1 Tmall 65% 2 Taobao 60% 3 JD 59%


Offline channels


1 Brand counters in department stores 69%


2 Personal care stores 56%


3 Multi-brand beauty specialists 50%


1000 respondents asked: ‘From which online platform/ in-store channel did you purchase beauty products most often?’ December 2020. Source: The NPD Group


CHINA


Online beauty sales progressed significantly across many countries in 2020 but China’s


e-commerce channel remains in a league of its own, accounting for the majority of beauty sales even before the pandemic. According to Statistica, online shopping accounted for around 74% of China’s overall cosmetics retail sales in 2018 and is forecast to reach nearly 80% by 2024.


The size of China’s e-commerce market for prestige beauty products alone is astounding, worth $10.8bn in 2020 according to The NPD Group, with sales growing by 38% versus 2019. In 2020, three big e-commerce festivals,


Women’s Day in March, the 618 campaign in June and the double 11 in November, greatly contributed to the online sales dynamic, says The NPD Group. Online platform Tmall was the most popular retailer for beauty purchases in December 2020, followed by Taobao, and young consumers, particularly men, favoured online shopping when making their beauty purchases. Data fielded between 11-18 December found that 38% of consumers aged 15-24 shopped solely online, compared with 20% of 25-34 year olds, while 33% of men and 24% of women bought products exclusively online.


The future of retail is expected to blur the intersection of physical and digital experiences


Content specifically relating to male beauty has increased in recent years, as male beauty KOLs (key opinion leaders) have become more present on social media platforms in China. According to Daxue Consulting, 20% of beauty KOLs on video-based platforms like Douyin, Kuaishou and Bilibili were men as of December 2019, and online channels have become a more popular and diversified way for male consumers to find beauty-related information. Livestream shopping represents an increasingly important strategy for retailers, both for the male consumer and millennial and Gen Z beauty consumers more widely, but with the majority of Chinese consumers (66%) continuing to shop both in-store and online, industry players should continue to balance their digital and non-digital developments


ACTION POINTS


There is an opportunity for some of the larger retailers to work with indie marketplaces that are curating innovative brands. It can save them time and they can potentially just rent out their floor space. Wizz Selvey, founder & CEO, Wizz&Co


Leveraging the strength of each channel, recognising the opportunities of the changed beauty consumer, and owning this transformation are important action items for retailers, brands, and manufacturers as we enter the recovery phase. Larissa Jensen, Beauty Industry Adviser, The NPD Group


May 2021 cosmetics business 17


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20