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COVID-19 Crisis: Consumer Insights on COVID’s Impact on the Beauty Industry

9 MINUTE READ | May 6, 2020

COVID-19 Crisis: Consumer Insights on COVID’s Impact on the Beauty Industry

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Caroline Norton

Caroline Norton has written this article. More details coming soon.

Yesterday was Cinco de Mayo, and naturally, consumer interest in cooking and food consumption is still going strong. Reddit has seen a home cooking renaissance of sorts, and the Food & Drink interest group had a +19% increase in views this week. The [Homemade] tag exploded on the subreddit, and skilled DIY chefs posted new recipes and mouth-watering creations, sharing everything from a smoked brisket pastrami reuben to baklava. Anyone else getting hungry? 

Now, onto the briefing:

This week, fewer people are talking about COVID-19 online than in previous weeks, and the number of articles surrounding the topic has dropped 10% WoW, with online discussion dropping 12%. At this rate, within two weeks, the number of people talking about coronavirus will be at the same level as it was at the start of March. Yet, despite the drop in overall virus-related conversation, discussion of the lockdown remains consistent. Since peaking towards the end of March, around 2M people have contributed to the conversation every week.

Even as some states open up, consumers are still concerned about the risk of being exposed to the virus when resuming preCOVID life. 80% of Americans are reportedly still concerned of their risk of being exposed to coronavirus when leaving home for errands, 69% worry they’ll accidentally expose others, 73% worry about future public activities such as public transit or socializing, and 68% worry about going to bars, restaurants, hairdressers, etc.

Because of these sustained consumer worries, safety must be a key component of any business’s plan to reopen. Airbnb, for example, has rolled out stringent cleaning and vacancy procedures across their 7M global rentals, requiring rentals to stay vacant for 24 hours between guests, based on a recommendation from the CDC.

After weeks of additional time to exercise at home and increased incentives to eat fresh, home-cooked meals, consumers report that they’re eating healthier than ever before. 42% of Americans are consuming more fresh food, and 66% are eating more home-cooked meals. Accordingly, consumers continue to spend more on groceries than pre-virus, specifically parents, adults ages 35-49, and Urbanites. However, even as consumers purchase more groceries, stockpiling has begun to decline slightly, as consumers adjust to their new normal.

In retail news, Walmart launched a two-hour delivery service, Express Delivery, rivaling Amazon’s Prime Now service. Walmart’s team of personal shoppers will pick-up orders in store, and its delivery partners will be tasked with last-mile delivery. This new service rolled out at 100 stores in April and will expand to 1,000 stores in early May and 2,000 stores by the end of the month. In addition to increasing its contactless delivery offerings to support consumers, retailers and fashion brands continue to support local businesses as well. 

Global retail platforms such as Shopify and Farfetch have launched initiatives to make it easier to support small, local boutiques. For example, Shopify has created a new mobile app called Shop, a personal shopping assistant that allows users to follow their favorite shops, compile tracking info, and pay more quickly. It also includes a “Shop Local” option allowing users to shop directly from stores in their city or neighborhood based on zip code.

Farfetch, an online marketplace offering access to designer goods via hundreds of retail partners across the globe, launched its #supportboutiques initiative, using marketing messaging to drive engagement to its small business partners. The marketplace also lowered the fees involved in using the platform and are providing protective gear and overall guidance for boutique staff.

As states begin to reopen, there is increasing discussion about the lasting impact on the hair salon experience. Hairstyling veteran Van Council is one of the first to reopen its doors in Atlanta, Georgia, but is taking extra precautions to protect its workers and customers while abiding by safety guidelines. Some of these requirements include limiting salon capacity, physically spacing out stylists, checking clients’ temperatures, and having stylists wear protective equipment.

Additionally, there will be no blow-drying or styling to avoid the airflow of germs and cut down on the time spent in the salon. Many other salons are monitoring this reopening very closely, in addition to other countries’ approaches, taking note of what will be successful in the long term. It will be quite some time before salons are able to operate at full capacity, let alone return to any form of normalcy.

In the meantime, customers are having to make do with at-home solutions. According to Nielsen, sales of hair coloring products increased by 23% in Q1 2020 compared to last year. For some brands, there has been an even more drastic increase compared to preCOVID business operations. For example, U.K. based Josh Wood Colour saw a 1,300% increase in new customers month-over-month since the beginning of March. Additionally, virtual try-ons for L’Oreal Paris hair dye increased 336% between March 1st and April 12th compared to January and February.

Lastly, it’s interesting that in recent weeks, both clean beauty products, botox, and skincare alternatives have seen an uptick in sales. The increased interest in clean beauty products is timely, as 45% of global consumers say they are making more sustainable choices. The NPD reported that natural beauty skincare purchases had increased by 11%. But while some users are interested in choosing sustainable, clean products, there is also the consumer segment that is looking to fill the gap for their routine cosmetic services.

For example, Dermstore saw a 200% increase in sales for lip exfoliators and plumpers. Meanwhile, Dr. Brandt, a brand dedicated to offering at-home alternatives to in-office facials and injections, saw a 25% increase in March and April in its online sales YoY.

On Tuesday, brands celebrated Cinco De Mayo at home with virtual events and bartending classes in support of local restaurants and bars as well as COVID-19 relief funds. Patron, the tequila brand, hosted a five-hour “Virtual Bar’ on Instagram Live featuring 20 bartenders across the U.S. crafting easy-to-make margaritas at home, with proceeds donated to COVID-relief organizations. 

The hot sauce brand, Cholula, leveraged Instagram Live for the first-ever Tacothon, featuring celebrities like Sophia Bush and Dwyane Wade and raising money for the Independent Restaurant Coalition. Finally, Cameo, the platform in which celebrities create personalized video messages, partnered with Tequila Don Julio to host It’s Cinco Somewhere. This event invited people to donate to the Restaurant Workers’ Community Foundation for a chance to win a video happy hour co-hosted by a celebrity and bartender of their choice.

TikTok launched the Happy at Home #OneCommunity Livestream series, boosting its Community Relief Fund for COVID-19. Each night this week, there will be a different theme, with donations going to organizations in the entertainment, food, and healthcare industries that have been affected by the pandemic. Using its recently launched Donation Stickers, TikTok will match donations through May 27th, up to $10M.

Despite the official indefinite postponement of this year’s MET Gala, a group of Gen Z students launched the first-ever virtual MET Gala as part of the High Fashion Twitter community, also known as “hft.” Participants “arrived” to the #HFMetGala2020 by posting their looks — collages or photographs embedded in a specially-designed Twitter layout, bringing the magic of the MET to life, virtually.

As we entered a new month and reached a new unemployment record, there was more reluctance from tenants nationwide to pay their rent, rallying behind the hashtag #CancelRent on social media. The end goal of these groups was to essentially persuade the government to forgo requiring rent and mortgage payments for the time being. This outcry was fueled by the fact that paying for rent is still a top concern for consumers aged 18-34, according to eMarketer.

Consumers aged 35-64 are equally concerned about rent and paying for needs without going into debt. As a result, it’s not surprising that 31% of global consumers say that paying bills is now a challenge. The U.S. and Italy, in particular, are above this average, reporting the highest number of consumers who are struggling to make ends meet.

And because consumers are struggling to pay for even their basic needs, they are even more motivated to learn how to save. On social media, mentions of people asking for help and tips on saving increased by 24% in March and April compared to January and February. As a result, some users are partaking in the ‘No Spend Year’ challenge, which involves users forgoing a certain item for the remainder of the year, and the ‘Dollar a Day’ challenge in which users set aside a set amount of money on certain days for savings. The two challenges have garnered 26K and 14K mentions, respectively, as of April 29th. 

B2B companies have seen an over a 65% decrease in sales opportunities and deals due to the coronavirus, and many are not confident in hitting their sales targets, according to Contesma. Though, the majority of B2B sellers are still either somewhat or very confident in their job. This supports last week’s findings that tech companies are still some of those best positioned to weather this storm. 

However, countries hit hardest by the virus are still experiencing the most delays in B2B payments, and that does not necessarily mean that all corporations are extending their payment terms. In Italy, for example, 80% more B2B invoices have not been paid. But for many UniCredit vendors, 60-day payment terms are no longer an option, with the bank announcing it will aim to accelerate the payment times to help support cash flows. Following Italy, France and Spain have experienced the largest increase in delayed payments, with spikes of over 50% for each country. And the U.S. is not exempt, with L3Harris Technologies, for example, accelerating $100M in supplier payments to strengthen cash flows as well.

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To end on a more positive note, LinkedIn has received requests from close to 2K organizations in 25 different countries to help fill 200K jobs in healthcare and essential service roles since they launched the initiative in April. According to Cohen, over two-thirds of LinkedIn members said they were open to volunteering while also reporting that they are 50% more likely to apply to an urgent job over a noncritical job. It’s reassuring to know that amidst the hardships many people are facing, there are people out there, in addition to our brave healthcare workers and first responders, who are still willing to help.