Will 2020 go down as a complete lost cause for the mass-market beauty business or a year that opened up new opportunities for some retailers and suppliers?
Of course, time will tell, though as a battered industry enters the last few weeks of this chaotic year, many of the category’s biggest players most likely are simply licking their wounds, figuring out what happened, working out how to survive and deciding what’s next.
This may change, many industry officials said, as the much hoped for COVID-19 vaccines make their way to the public and consumers try to rebuild their lives back to some semblance of normalcy.
“When things return to normal, people are going to rush to return to the things that made them feel better,” said one retailer at a major chain. “That will most definitely include the beauty category. So, I think we have to be prepared to offer them what they want, including some new items to get them excited.”
Mass retailers also could be perfectly situated for the much anticipated return to normalcy. Some of their main competitors, namely department stores and some specialty stores, are struggling or have simply gone out of business. Plus, some consumers have changed their way of shopping, looking for more value in the beauty department and choosing mass brands over luxury names and luxury prices. “We definitely will have an opportunity to build sales because consumers want or need better pricing,” the retailer said.
Many suppliers and industry officials said they sense the same thing. “Drug stores and other essential retailers are in a strong position to continue to drive beauty and skin care growth, and are partnering with brands to elevate the consumer experience with a focus on improving the in-aisle beauty experience,” said Elizabeth Corrigan, founder and CEO of The Complete Package and Prestige Testing, based in Randolph, N.J. “Brand programs with drug stores that enhance store experiences may finally entice luxury brands to get comfortable with store shelves versus beauty counters. The pandemic has accelerated this shift. Brands need to be where customers are.”
Mass retailers overhauled beauty departments as a strategy to woo shoppers back from competitors or online retailers. Enhancing the experience is critical, said Brian Owens, senior vice president of global health and wellness retail insights at New York-based Kantar Consulting.
Perhaps, nothing showed the potential power of mass retailers in the beauty area in coming years than the announcement in early November that Ulta Beauty and Target had reached a deal to open over 100 beauty sections at the retail chain, with the possibility of hundreds more coming down the pike over the next few years.
Target officials, including chairman and CEO Brian Cornell, expressed their excitement, hoping that the combination of Ulta Beauty and Target will result in more consumers coming through the doors for beauty items. “This matchup brings Ulta Beauty’s coveted prestige beauty assortment, category expertise and guest loyalty together with Target’s high-powered beauty business and the ease and convenience of our industry-leading fulfillment services,” Cornell said in a press release.
“This is a win-win, pairing a leader in beauty curation with a leader in mass marketing,” according to Stephanie Wissink, equities analyst at New York-based Jeffries. Other industry officials stressed that it is going to come down to who attracts the most shoppers, and mass retailers have a clear advantage.
Drug store chains are becoming extremely active, as well, hoping that consumers will decide to visit their stores. For example, Camp Hill, Pa.-based Rite Aid is rolling out its rebranding effort called RxEvolution. Its store of the future prototype has a wellness area with brands handpicked for natural positioning. New beauty offerings include Ella + Mila, Seaweed Bath, Fleur & Bee, Essano and Kokie among others.
Deerfield, Ill.-based Walgreens also is kicking up its game. The chain recently launched a new loyalty program called myWalgreens, which will include beauty tips and tricks. The category is also part of a new shop program that allows people to order online or from a redesigned app for curbside or drive-thru delivery in under 30 minutes.
Not to be outdone, Woonsocket, R.I.-based CVS Health continues to build upon its Beauty IRL format with a commitment to products with “better for you” formulations. Its stores soon will feature a tool called SkinSafe, developed by the Mayo Clinic, that will allow shoppers to search and get information on product ingredients.
The year also saw the retirement of industry veteran Jody Pinson, who helped shape Walmart’s beauty department. Stepping in at the Bentonville, Ark.-based powerhouse is Musab Balbale, who is expected to broaden the retailer’s natural product scope and enrich its omnichannel capabilities. Balbale, whose title is vice president of omnichannel beauty, was formerly vice president of GM, health, beauty, wellness and pharmacy for Walmart e-commerce.
Kohl’s is looking to contend in the wellness space that mass beauty retailers are cultivating. The Menomonee Falls, Wis.-based merchant plans to triple its beauty sales with a new Wellness Market concept as a cornerstone of the effort.
Brands Step it Up
Despite the challenges of COVID-19, beauty lines achieved many milestones. There was growth, especially in products that helped people cope with sheltering at home, including DIY nail care, hair color and derm-quality skin care.
L’Oréal saw sales soar of its professional quality CeraVe brand, in part due to its viral popularity on TikTok, the company told DSN. The cosmetics giant said social media helped make CeraVe the No. 1 skin care brand in the United States over the past year.
The company also benefited from its decade-long attempt to shore up its digital efforts. In the first months of the pandemic, L’Oréal USA saw a 100% increase in e-commerce traffic across its North American business. The e-commerce growth was faster in America than anywhere else in the beauty giant’s global business, the company said.
L’Oréal USA began 2020 with a new leader at the helm: Stephane Rinderknech. He helped craft the company’s game plan as the year took an unexpected path that has helped return business to growth in North America. “We are proud of our ability to adapt to the unexpected,” L’Oréal said in a statement.
L’Oréal USA, for example, pivoted its business to respond to the crisis and, in March, announced a multifaceted initiative that included producing hand sanitizer, providing masks to front-line workers and making donations to charities in need.
The nail care category was one of the strongest performers across the mass-market landscape.
“The pandemic changed consumer shopping and purchasing behavior across the board. DIY beauty products, such as artificial nails and lashes performed well as salons closed down for months and close personal interactions [with technicians] were greatly reduced due to personal safety and health concerns,” said Annette DeVita-Goldstein, senior vice president of global marketing at Port Washington, N.Y.-based Kiss Products. “All of our fashion nails sold very well and continue to sell well. Professional nail kits were also strong as women looked to replicate their salon service at home.”
Kiss was well prepared for the additional demand, she said, because the company recently built a second nail factory in Vietnam that helped support a new distribution center in New Jersey.
“We anticipate that the trend for DIY and self-care will continue in the future as the rewards of doing so go beyond ‘safety’ as more and more women have now personally experienced the ease, convenience and quality of the at-home nail and lash experience,” DeVita-Goldstein said.
Consumers also focused on ways to grow their eyelashes at home, especially consumers who couldn’t get to salons for extensions. To that end, OKAY Pure Naturals put a push behind its Eyelash Growth. The Miami-based company has natural solutions using golden castor oil and black Jamaican oil. Osman Mithavayani, the company’s co-founder, also noted an uptick in natural at-home hair color, such as the brand’s Herbal Henna.
Beauty By Imagination reported a huge sales spike in Ouchless Forever Elastics for an unusual reason. The company said that during the early days of the pandemic, when masks were hard to find, people used the elastics to make their own out of scarves and bandanas. Healthcare professionals also used them to cushion the straps on their masks during long shifts, according to the company.
Many brands did not put innovation on the backburner, even during the pandemic. L’Oréal expanded its commitment to beauty tech with the introduction of a first of its kind AI-powered at-home system that creates personalized formulas for skin care and cosmetics. L’Oréal’s Maybelline division had a hit with Lifter Gloss, which the company said captured a young demographic.
Danbury, Conn.-based Beiersdorf also featured several products as its key performers this year. Under its Nivea brand, the company released a Breathable Body Lotion and Body Wash with Nourishing Serum. The company said it is the first to market with a new technology oil and emulsifier, resulting in faster absorption.
Beiersdorf’s Eucerin expanded its range of products to treat eczema with its new Eczema Relief Cream Body Wash. Also new was its Itch Relief Intensive Calming Lotion. The company said these products saw an uptick as people noticed skin was drying out from use of sanitizing products.
Consumers became more focused on ingredients and self-care during the year, a movement that benefitted Durham, N.C.- based Burt’s Bees.
“In 2020, we’ve seen our shopper become more focused on self-care. She understands that her daily skin care ritual is intrinsically connected to her overall wellness and seeks out mindful moments of caring for her skin through cleansing and moisturizing,” said Denise Wellender, senior director of sales at the Clorox-owned brand. “Accessible, trusted and effective, Burt’s Bees products offer her a clean, dermatologist-approved regimen to meet this need, backed by the proven power of nature.”
E.l.f., based in San Francisco, has not minimized its launches, either. The brand continued to enjoy added sales from exposure on TikTok. The company announced an eye-opening launch of a lifestyle brand called Keys Soulcare from singer Alicia Keys. Retailers said they hope it will be a mass market answer to Gwyneth Paltrow’s Goop.
It was a big year for Popbeauty and Pixi, which gained major mass distribution. The British Popbeauty brand introduced its vegan skin care and color line at CVS Pharmacy. Sister division Pixi is now in CVS Pharmacy, Walgreens and Ulta Beauty. A company spokesperson singled out Clarity Skintreats, which launched in June 2020 as one of the best performers for the brand.
Other brands gaining footage in mass doors included Kokie, Flower by Drew Barrymore and Mele skin care.
It also was a big year for women in beauty, including Sue Nabi, who took over as CEO at New York-based Coty. Already she appears to be bringing much needed life to the brand. Coty’s results exceeded its own expectations, Nabi said. Now she is seeking to turn around the CoverGirl brand that has been losing shelf space at retail over the last few years.