As the beauty industry approached its most important shopping season of the year, there was ambiguity regarding what the final picture would look like for single-brand retailers like Lush and Bath & Body Works, which are renowned for luring consumers with exclusive in-store experiences, desirable promotions, and giftable items. Now, after the holiday months, Kline’s analysis of foot traffic data from SafeGraph reveals that holiday foot traffic for this channel of the beauty industry was down 45% in November and December. Despite this significant drop, sales did not decline as significantly, courtesy of higher consumer spending and stocking up during visits.
The onset of the COVID-19 pandemic in March 2020 forced beauty boutique retailers to swiftly shutter doors temporarily and reevaluate their network of brick-and-mortar stores, resulting in the permanent closures of some locations that were underperforming pre-pandemic. Despite a difficult start to 2020 with COVID-19 and a significant drop in consumer visits to these stores, the vertically integrated model is not, in fact, broken.
Sales for the boutique retailer channel had been steadily rising for decades, and this growth was more robust than ever as we headed into 2020, according to our new Retail Tracking: Monthly Monitor of U.S. Boutique Beauty Retailers program. Beauty sales through this channel in January and February 2020 combined were up 26%. This outstanding result was largely driven by Bath & Body Works’ post-holiday semi-annual sale and pre-pandemic stockpiling of items like hand soaps. Also boosting channel growth was Lush, which continued to benefit from ingredient transparency in its products and approachable price points, all the while leveraging an immersive in-store shopping experience. Fragrances were also a bright spot, with healthy gains seen from Jo Malone London and Le Labo.
Throughout 2020, these retailers were able to strike a balance between shifting to digital and creating a pandemic-friendly shopping environment upon reopening stores without compromising on the brand promise. While store re–openings varied by retailer in this channel — most Bath & Body Works stores had reopened by end of Q2, while L’Occitane began reopening select U.S. stores in late June and Glossier has yet to re-open its stores — there were signs of resilience for the channel in the latter half of the year. Bath & Body Works is the clear standout, far ahead of the group, as store sales in Q3 outperformed the year prior courtesy of exceptional results in the retailer’s hand sanitizers and hand soap category—high–demand items during the pandemic—coupled with growth of its popular home fragrance and body care products.
Now, at the onset of another potentially challenging year in retail, the future for beauty in 2021 still feels optimistic, as an end to pandemic struggles is in sight with COVID-19 vaccines rolling out across the United States and with the channel proving its resiliency. To track the performance of the dynamic beauty boutique channel and understand shifts in performance for these retailers on a month-to-month basis, refer to our upcoming Retail Tracking: Monthly Monitor of U.S. Boutique Beauty Retailers.