COVID-19-related Challenges to Cosmetics Business Growth
The cosmetic industry has shown consistent resilience in the past, even after the 2008 financial crisis. The global beauty industry sales grew from $309 billion in 2008 to $500 billion in 2019, according to McKinsey & Company. This statistic includes the color cosmetics sales growth from $42 billion to $72 billion during the period 2008-2019. Cosmetic retailers are curious to know if the industry will be able to exhibit resilience during or after the COVID-19 crisis. Compared to other consumer categories, beauty products including cosmetics could show a relatively better trend, market experts predict.
No doubt, the COVID-19 pandemic is likely to majorly hit the cosmetic industry. However, with changing trends and the beauty industry becoming more significant, expansive, and global, cosmetic businesses are expected to stay afloat during the pandemic situation.
Adverse Effects of COVID-19 on Cosmetic Industry
It’s time to brace for impact. Major cosmetic companies are plotting a new strategy to survive the COVID-19 disaster in terms of sales and overall growth. Here are some of the top factors they could consider when devising a foolproof evacuation plan to get their business out of the COVID-19 trouble.
Dip in travel retail sales: Travel restrictions and bans are the number one reason for a telling drop in the travel retail business at airports, border shops, cruises, and other travel environments.
Cancelation of live events: Social distancing norms, lockdowns, and self-quarantines have forced cosmetic companies to hold virtual events instead of live conferences. This could impact new product launch, sales pitch, and product exhibition efforts of cosmetic businesses.
Lack of staff members: The need to work from home amid the COVID-19 pandemic has led to serious shortage of staff at brick-and-mortar cosmetic stores. It has also affected delivery times and customer service availability at cosmetic retail stores.
Less spending on beauty products: Cosmetics do not include just beauty products. Having said that, customers are less likely to spend more on fragrances and makeups due to current trends such as mask wearing and physical distancing.
Slow return to brick-and-mortar shopping: Despite several cosmetic chains reopening their stores after lockdowns and the easing up of COVID-19 restrictions, customers have been reluctant to shop in stores. This could be due to the fear of contracting of the novel coronavirus and job loss leading to low income availability.