Consumers Are Set To Carry On Spending Over 8% YoY On Beauty Post-covid-19

Olivia Alcorn
by: Olivia Alcorn
The 2020 lockdown drove beauty and skincare consumers from the high street online, as well as seemingly influencing consumers who hadn’t previously invested in their self-care routines. With this heady mix of reaching new audiences online and more people than ever looking for ways to invest in themselves, the beauty industry enjoyed the largest growth in an unprecedented period.

The surprising success of the beauty and skincare industry throughout a period of uncertainty, recession and furlough, wasn’t predicted by industry experts. The UK skincare market has continued to grow on average 6% YoY from 2017 and is forecast to continue this growth to reach $24.3 billion by 2024, according to a report by Morden Intelligence

So what does the industry expect for 2021? And what has been the secret ingredient to success when it comes to buying beauty and skincare products 

The Vision For Beauty In 2020 Didn’t Reflect What Happened

The first quarter of 2020 was thrown into chaos with enforced lockdowns across Europe and America disrupting buying chains, shutting salons and department stores, causing consumers to shop exclusively online. Sales in beauty across Europe reflected this too, dipping 13% compared to the previous year, according to market research firm NPD. To make matters worse, the global luxury brand house reported an 18% hit on cosmetics and perfume sales, proving that even the biggest brands weren’t immune to feeling the effects of COVID-19.

But then, something changed during March 2020 and the consumer surge for skincare took a sudden turn in direction and reached new search heights…

Despite the odds, consumer behaviour shifted from March 2020, and online sales in beauty and skincare increased by 73% with many companies recording their best sales yet. Emerging brands such as Beauty Pie, Glossier and By HumanKind have also been reaping the rewards of influencer marketing across their social channels, reaching new audiences who are actively looking for skincare products. Despite experts expecting a real downturn for skincare and cosmetics, the global industry grew on average at 3.6% for 2020 and is set to continue. We previously covered the ‘Covid Boom’ for the skincare industry from a trends point of view, with a focus on skincare conditions as the search term ‘skincare routine’ grew by 5x YoY.

Significantly, research amongst our own skincare clients has indicated the majority of consumers are using their mobiles to browse or search for skincare and beauty products, compared to any other device- despite the fact we’ve all been at home using laptops or desktops. The graph below shares some insights from one of our clients who have seen a consistent increase in mobile visits to their site, compared to any other device throughout 2020. Similarly, L’Oreal reported 93% of all their web traffic during the lockdown came from mobile devices too, indicating a real shift in how consumers actively browse and buy.

Industry experts are predicting this growth is set to continue as brands have successfully managed to reach previously untapped audiences of consumers that have formerly felt overlooked or completely ignored. From ethically sourced ingredients, recycled packaging, and ‘planet first’ messaging, consumers are looking for more unique selling points from their skincare brands that reflect their personal lifestyles instead of being restricted to more mainstream or widely available brands.

The boom in skincare and beauty can also be partly attributed to brands reaching new captive audiences as more people than ever took charge of self-care, reaching a far wider and more diverse audience than ever before.

Brands Reached Previously Ignored Audiences

The skincare and beauty industry has historically been guilty of largely focusing their marketing efforts on younger women, ignoring all other consumer groups. A recent study by L’Oreal highlighted over 40% of women within generation X who are over 50, felt completely ignored by brands and didn’t identify products suitable for their skin. 2020 saw a complete shift in brands targeting consumers with exciting new products for men specifically instead of being gender-neutral, with the global market continuing to grow 5.5% by 2022. We’ve previously shared the growing trends for men’s skincare as more brands recognise the potential this largely untapped audience has for them. 

There was also a significant rise of inclusive make-up products too, with Superdrug announcing they would only stock brands that had 20 or more shades of make-up available, and Estee Lauder doubled their foundation colours to 56 shades. With more consumers than ever feeling they can directly identify with more products, the industry will continue to grow as demand evolves and people continue to invest in self-care.

Previous Beauty Products That Have Weathered The Economic Storm

Whilst the skincare industry was set to grow throughout 2020 regardless of the pandemic, no-one could foresee the huge growth it exceeded although the phenomenon of the beauty and skincare product ‘boom’ through challenging times is not a new one! In fact, historically there was always one particular beauty product brands could always rely on to ‘boom’ when everything else was tough. 

The humble lipstick, usually in a bright red, was the go-to mood enhancer and a relatively affordable luxury item that everyone invested in during the Second World War and the US recession. It became such a regular pattern in consumerism, owner of Estee Lauder, Leonard Lauder, coined the “lipstick index” to describe the trend of lipstick sales increasing during times of economic strife. Whilst the 2020 pandemic brought compulsory mask-wearing, we naturally shunned the previous lipstick index trend, though it did have a similar effect on self-care. Sales trends clearly show us people were looking to invest in themselves again, choosing skincare and beauty products that made them feel better.

Beauty Boom Set To Rise 8% YoY  

With 2021 bringing fewer restrictions on lockdowns and highstreet stores start to open up, the forecast for the industry is still looking positive with expected growth for the health and beauty sector set to continue. Industry experts GlobalData have predicted health and beauty spend in the UK is forecast to rise by 8.8% out to 2024, equating to an additional £2 billion.

As of 2020, The UK’s beauty industry was estimated at being worth £27 billion, ranking as the seventh-largest cosmetics market in the world. In fact, it’s stayed above £9 billion YoY since 2017, indicating that business is continuing to boom for beauty and skincare brands. Despite the closure of salons and department stores throughout 2020 and into 2021, consumers will continue to spend throughout the COVID-19 pandemic and beyond.

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