Beauty may have been dominated by the omnichannel approach in 2019, but this year, the industry is witnessing one of the strongest shifts to e–commerce ever. The transformation began in March 2020 with the onset of the COVID-19 pandemic, causing the omnichannel approach to lose relevance as many brick-and-mortar retailers across the country were forced to shutter.
Our Beauty Retailing USA report predicts that the change to digital is here to stay and will be accelerated as health and safety standards may encourage consumers to permanently use alternate methods to purchase products. In 2020, the Internet is advancing nearly 22%, while stores will drop by about 6%.
Retailers and marketers alike have shifted from encouraging product discovery through stores to a direct-to-consumer approach. Through social media and online-only promotional activity, consumers had more incentives than ever to shop their favorite beauty and personal care products through direct channels.
Personalized beauty was also a key driver that brought consumers to direct channels during self-quarantine, with subscription services being a key component. Brands offering these services—such as Hairstory, Curology, and Function of Beauty—were able to eliminate the need for in-person customer service and shopping trips by allowing consumers to choose their preferred formulas, packaging, and delivery frequency.
In this new beauty marketplace, a strong e–commerce presence is vital to surviving the pandemic and potential upticks in coronavirus cases. Customized subscription services are proving to be one of the methods marketers can utilize to combat decreased foot traffic in stores.
Brick-and-mortar will still serve as the primary location for product discovery; it is eventually expected to rebound after recording relatively flat growth through 2024. The key to this recovery is keeping the experiences touchless, using personalization technology such as Sephora’s Virtual Artist to allow consumers to play with products in a safe and sanitary way without the use of testers. It is yet to be seen how brick–and–mortar will bounce back this year and what the future holds for 2021. If recent store re-openings that have been met with pent–up demand are a barometer of the future, the forecast could be more promising than previously anticipated.