The future of the beauty business
Things were starting to look pretty for a moment, with the beauty industry poised on the cusp of a boom. The L’Oréal group ended the past decade with its best sales since 2007; like-for-like sales were up eight per cent year on year, boosted by a growing demand in Asia for active skincare and “natural make-up” looks which – contrary to the name – are incredibly product-intensive. Make-up sales at Estée Lauder Companies Inc were up four per cent, also led by a boom in Asia, where MAC lip products, Estée Lauder Double Wear foundation and Tom Ford eyeshadows were flying off the shelves. Its skincare sales were up a staggering 17 per cent, a boost again ascribed to customers from China and Hong Kong who gravitated towards Advanced Night Repair serums and La Mer moisturisers while browsing in duty-free and department stores. LVMH reported a nine per cent surge in revenue from its beauty brands in 2019 compared with the previous year, powered by Dior, Givenchy and Fenty Beauty by Rihanna.
But then the pandemic hit. Everything was turned on its head, and our primping priorities changed. Sales of colour cosmetics such as lipstick, eyeshadow and foundation fell dramatically. In the first quarter of 2020, fragrance sales in the US and Europe were down 13 per cent on last year, according to market research firm NPD. LVMH’s cosmetics and perfume revenue took an 18 per cent hit in the first quarter, compared with the same period in 2019. Supply chains went haywire, duty-free beauty halls sat silent, and the closure of bricks-and-mortar retail spaces across the world shifted everything online. The crisis put new pressure on AI beauty tools, such as skin-tone matchers, that had up to this point been “nice to haves”. Consulting firm McKinsey has estimated that global revenue for the beauty industry could fall by up to 30 per cent this year.
As with so many aspects of life during lockdown, we have all had to reconsider what is necessary and why we use what we do. Beauty brands have been forced to adapt to a world where most of our time is spent at home, spaces in which glamour is not entirely forgotten but certainly has less currency than before. So, what does the future of beauty look like now?
“Simpler” is the answer – and a welcome one for many. We’re still buying. Selfridges reported that beauty has been by far its strongest category since lockdown, and the beauty category at Net-a-Porter was up 158 per cent in the second half of March compared with last year. But we’re looking past new launches to trusted classics, revisiting old favourites from heritage brands, and honing down the beauty cabinet to contain a new definition of “essentials”.
“There has been a clear trend towards hero products, and those that are very much tried and tested, such as La Mer’s cult favourites,” explains Annalise Fard, director of beauty, accessories, fine jewellery & watches at Harrods, which has continued selling online throughout the pandemic. Net-a-Porter – which paused business, while still accepting orders to be fulfilled later and offering the option to shop from its Asia-Pacific online store – came back after coronavirus peaked in the UK to huge demand for products such as Augustinus Bader’s The Rich Cream and Charlotte Tilbury’s Magic Cream: newer products, sure, but already proven investment purchases.
“We’ll now see a further move towards the ‘buy less but better’ mentality,” predicts Clare Varga, head of beauty at trend-forecasting agency WGSN. “There’ll be a redefining of ‘value’ that goes beyond just cost.”
While we were already moving towards more considered consumption, the pandemic – and all the analysis and soul-searching that has followed in its wake – has accelerated the process. It’s a shift backed not only by the environmental community, but by scientific groups. In his new book Clean, preventive-medicine physician and journalist James Hamblin examines the culture and science of how we treat our skin and argues that we have become over-reliant on beauty products, some of which stop the ecosystems on our skin from functioning properly. “It can be psychologically valuable to see how little we actually need, and slowly reintroduce only the things we really want,” he writes.
Historically, the one product that could weather every storm was lipstick. As a mood-enhancer and a relatively cheap luxury, it has sold consistently through recessions and wars – even being deemed a necessity by the US government during the second world war. The phenomenon is so ubiquitous it has its own name: the “lipstick index”, a term coined by Leonard Lauder (of Estée fame) during the 2001 recession to describe the trend of lipstick sales increasing during times of economic strife. But with mask-wearing becoming more commonplace, and anxiety around the hygiene of new products, has the lipstick index finally met its match?
“The adage about the comforting luxury still stands – but this time it’s not lipstick, it’s skincare,” says Melissa McGinnis, head of beauty buying at Selfridges, of the products that have remained robust in sales. “This period has been a pause point for really looking after ourselves, and many people are investing that time differently.” WGSN’s Varga, meanwhile, is putting her money on mascara. “The eyes will take on a new importance,” she continues, “with the focus shifting onto the lashes and the brows.”
Indeed, naturalism was already the dominant aesthetic, but now it feels more appropriate as well. “Projecting the glamour of full-face make-up feels unseemly in these times,” says Alexia Inge, co-founder and co-CEO of Cult Beauty. “In the past few months our aesthetic has changed, and I can’t see the Insta-glamorous look making a fast comeback. Contour palettes are starting to gather dust as consumers embrace freer, more natural make-up looks. It’s the lashes category that’s experiencing a bumper year so far.”
Working from home has encouraged many to become more relaxed about baring their true face. While brow products have held steady (something McGinnis expects to grow further as mask-wearing becomes standard practice), blushers and lip pencils have been sitting idle alongside our blazers and shirts. Having learnt to live without, we may not go back. “Thanks to the ‘Zoom Boom’, we’ve become a lot more comfortable and accepting of seeing each other without make-up on,” Varga explains. “It’s been a leveller and for many it’s been liberating. As a behaviour, this will stick – on and off the screen.”
Kathryn Bishop, foresight editor at trend-forecasting consultancy The Future Laboratory, concurs. “I think there will be a mainstream embracement of natural beauty – even for people returning to work. Lipstick will be swapped for skincare and wellness products, as consumers increasingly prioritise how they feel over how they look.”
Unlike many in the business, Estée Lauder is hedging its bets on a return to full-face glamour. “We anticipate a renewed interest in colour make-up when lockdown lifts and socialising and celebrations begin,” says Lesley Crowther, vice president of consumer engagement & retail at the brand. “We’re pivoting for this with our key launches.” Their commitment also tallies with predictions from Luca Solca, an investment research analyst at Bernstein, who foresees “euphoria buying” in the event that a vaccine is developed.
It’s a bold commitment. For many, the fun of getting dressed up has become a distant memory, and we’ve learnt to look elsewhere for beauty thrills. And while some salons and hairdressers are now beginning to open again, their mile-long waiting lists may keep the status quo for some time to come. “Women are spending the extra time they may have on creating salon experiences for themselves,” says Newby Hands, global beauty director of Net-a-Porter, noting that sales of tools such as face rollers and scalp massagers have been popular. “With less access to travel and holidays, the everyday rituals of bathing have provided some much-needed escape,” adds Varga.
London department store Liberty noted that searches for Diptyque candles increased 536 per cent in the weeks after lockdown was announced, while plant-based Austrian brand Susanne Kaufmann was surprised to find that its incense lotion, which works against muscle tension, for the first time became highly in demand. “Self‑care has become a lot less selfish.”
Bathing and rolling may do wonders for our mental health, but when it comes to our physical wellbeing, there’s a school of thought that, in the post-Covid-19 landscape, “clean” products, which eliminated all so-called “nasties” in the form of petroleums, parabens, sulphates and fragrances, may not cut it any more. Where a few years ago, a shortlist of simple ingredients – extracts, oils, waters – was prized, this degree of natural purity is no longer enough to meet our heightened concerns over antibacterial properties, hygiene and the safety of our health. As Cult Beauty’s Inge wrote in her recent report: “Ecover out the window, Domestos in.” The new mood is less Gwyneth “Granola” Paltrow, more lab-based science Dr Barbara Sturm. “The arrival of coronavirus will further push the notion that natural isn’t always better, especially when it comes to ingredient safety and shelf life,” agrees Clare Hennigan, senior beauty analyst at market research company Mintel.
For others, it’s about the balance. Far from eclipsing the climate crisis, the pandemic has only served to make our ecological precarity seem more real. We want to feel safe, but we want to do right by the planet too. Charles Rosier, co-founder of cult German skincare brand Augustinus Bader, which launched with its hero product The Cream in 2018, thinks that we will become more demanding in this sense. “I think the consumer will want it both ways,” he predicts. “We’ll want clean science.”
It’s a philosophy, he argues, that is encapsulated by Professor Bader’s “wound gel”, developed in 2008 for children recovering from serious burns. “It contains a combination of vitamins and molecules that are naturally produced by your body,” says Rosier. “You can create the cycle of repair without using harsh chemicals. There is no arbitrage between being good to your skin with natural ingredients – vitamins, amino acids and lipids – and science. You can mimic efficient science using clean ingredients. I think that’s the future.” Inge dubs it the new “clean-clinical”, while The Future Laboratory calls it “bio-positive”.
Consumers are already voting this way with their wallets. Estée Lauder reported strong sales in its “active skincare” category – which includes products such as Origins High-Potency night cream and Darphin’s Retinol Oil Concentrate as bestsellers in their field. And the movement looks set to birth a whole new category: antibacterial beauty. “Already, fragrance brands are experimenting with scents for skin and home textiles that have biocide benefits,” says The Future Laboratory’s Bishop. “So not only will they smell good, they’ll also ward off unwanted germs.” She cites iodine, which has antiseptic properties, and gluconate, which is used for sterilising and healing, as ingredients we’ll be seeing a lot more of. In particular, the men’s skincare market is predicted to grow by $1bn by the end of 2024, powered by a demand for antipollution products.
“Clean beauty will evolve to mean ‘safe beauty’,” says Varga. “As a result, science-led beauty brands and products will see increased demand. It doesn’t matter if the ingredients are natural and tried and tested or bio-synthesised in a lab, the consumer will trust the science.”
Hygiene anxiety is likely to infiltrate our shopping habits too. Testers and samples will remain off-limits to many, even once the aversion to busy shops has died down, and virtual testing could become the only way. “The outbreak has encouraged – if not forced – shoppers to virtually try on products,” Varga confirms. “Having got used to this tech, people will stay with it. At-home and in-store, this contactless approach – which we’ve called ‘Design for Distancing’ – will become the new norm and quickly go mainstream.”
Brands have already stepped up to meet demand for expert DIY advice and virtual connection. Aveda created a series of videos on Instagram dishing out tips on everything from setting textured hair to styling grown-out haircuts – and views have increased over 200 per cent since the launch. MAC’s Virtual Try On tool, which allows shoppers to try on 200 eyeshadow and lipstick shades, saw a threefold increase in consumer engagement since lockdown began. Meanwhile, Rihanna’s Fenty Beauty turned to TikTok to keep its mostly Gen Z customers engaged, setting up an account where a select group of influencers would post brand-related content and make-up tutorials. The #fentybeautyhouse hashtag had 86.2m views on TikTok at the time of going to press.
“‘Big Tech’ was experiencing growing negative sentiment before Covid-19,” says Cult Beauty’s Inge. “But the way technology has enabled and facilitated all levels of society during this crisis has changed everything.” Some have observed that the virus has actually accelerated progress in the industry by years, not only for innovations in AI, but in everything from what we want in our skincare to how many products we use. As Varga says: “It’s been a total reset.”