Changing shopper behavior creates opportunity in beauty

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Changing shopper behavior creates opportunity in beauty

By Seth Mendelson - 10/01/2020

What are the key categories to keep beauty shoppers coming into mass retail outlets?

Drug Store News spoke with a number of leading retailers, brands and industry analysts who have identified seven categories that need the most attention in order to keep shoppers coming through the front door of those mass chains that want to be players in the beauty segment. 

Here is a look at what the experts said mass retailers should focus on as they rebuild or re-emphasize their beauty departments:

Wellness 
Products for wellness are moving to the front burner — whether it be vitamins with immunity properties, aromatherapy or formulas using CBD. 

Overall vitamin sales rose a healthy 10.9% for the 52 weeks ended June 14 in chain stores, according to Chicago-based market research firm IRI. Retailers with pharmacy counters are well positioned to leverage their wellness capabilities, experts said. Vitamin D, in particular, has had a rapid ascension as it was linked to fighting off the virus. Supplements with immunity capabilities will continue to flourish, experts said. 

Officials at HatchBeauty Brands, which develops proprietary products, said the potential for ingestibles in the beauty space is mammoth. Consumers, especially Gen Zers, already are digging deeper into research about ingredients that foster beauty from the inside out. In a July 15, 2020 report, “How the Wellness Movement is Changing the Face of Beauty Forever,” HatchBeauty noted that searches for terms around wellness have increased almost 100% over the past five years. 

“As we move into the new roaring 2020s, it’s hard to imagine a scenario where wellness and beauty don’t continue to merge and evolve. We believe consumers will begin to associate ingestibles as a nonnegotiable part of their beauty routines,” the HatchBeauty report stated. The company said ingredients to watch include vitamin C; conjugated linoleic acids, or CLA; astaxanthin; whole food fermentate; algae fermentate; and birch bark.

Home fragrance also is a category getting a fresh look for its role in the wellness equation. “Home fragrance is more than candles or diffusers,” said Laura McCann, founder and CEO of Asheville, N.C.-based Adoratherapy. “We envision our fragrances in wellness because our clean essential-oil based products are mood boosters.” 

Is there also new life in the mass fragrance world as people seek well-being? Kevin Shapiro, senior vice president of U.S. marketing for consumer beauty at Coty, said the category saw growth when luxury stores were completely closed. Consumers sought out the mass market for Mother’s Day and Father’s Day gifts, or as “special thank-yous for those lending helping hands during this unprecedented time like front-line healthcare workers,” he said. 

Beauty offerings with CBD play into consumer wellness demands as well, and there’s plenty of activity, including Jane Fonda signing on as ambassador of Uncle Bud’s, CURE Pharmaceutical’s purchase of Sherman Oaks, Calif.-based Sera Labs, and e.l.f.’s extension into the space.  

For e.l.f., the move is a continuation of the success it had when it introduced its Cannabis Sativa Hemp Seed Oil last year. In May, the company launched its Full Spectrum CBD line at mass. The new collection features face and body care products infused with full spectrum CBD.

“We continue to focus on skin care as a strategically important category and understand our consumers’ desire for wellness and self-care, especially during this uncertain time,” said Kory Marchisotto, chief marketing officer at Oakland, Calif.-based e.l.f. “Skin care has been outperforming cosmetics during the COVID-19 crisis and CBD, in particular, is projected to be a $22 billion industry by 2022.” 

Nails
The once-dormant nail care category has come to life as nail salons were forced to close during the early stages of the pandemic. For example, for the 52 weeks ended June 14 in multi-unit doors, IRI data said that overall nail sales soared 13.8%, with artificial nail sales ascending almost 32%, nail treatments rising 21% and nail lacquer climbing 8.2%. 

The uptick was good news for New York-based Coty’s Sally Hansen line. “We’ve seen growth across all nail segments, which speaks to the variety of benefits that consumers are craving,” Shapiro said. “Be it long-wear performance through Sally Hansen Miracle Gel, which just launched a new top coat that delivers an at-home mani that lasts up to eight days, or a more ingredient-conscious product like Sally Hansen Good. Kind. Pure., which launched in January.”

Shapiro also said that nail care has seen momentum as consumers take more care to make sure their nails, cuticles and fingers are hydrated and healthy. That boosted Sally Hansen’s nail treatment, which leads the category with a 44.6% share, up two percentage points based on Nielsen data for 13 weeks ending June 27. 

“Overall, Sally Hansen continues to offer products and innovations that consumers want,” Shapiro said. “They have validated that with their purchases, since March 2020, we have seen triple digit e-commerce growth in the U.S. and a brick-and-mortar market share of 44.9%, according to Nielsen.”

Tam Tran, founder and CEO of North Miami, Fla.-based Anise Cosmetics, which produces the Nail-Aid Brand, believes women are looking for simplicity — not glitter or loud colors that are difficult to remove. Many women will avoid the salon for health and economic reasons, she said. 

Women are now paying more attention to nail care products that have nourishing or plant-based ingredients that are similar to the ingredients in the vitamin supplements that they are taking for their health. They are also looking for nail care products in packages versus bottles that can be handled by multiple shoppers.
Tam Tran, founder and CEO of Anise Cosmetics.

Hair
Two segments in the hair care space  — hair color and products for textured hair —have become monumental profit centers for mass merchants.

Hair color sales for the 52-week period tracked by IRI jumped 7% with unisex products — often vibrant colors — soaring almost 60%. That’s huge news for retailers since hair color sales have been in the minus column for almost a decade in the mass market. 

“Consumers have discovered just how easy Clairol’s Nice ’N Easy is, some for the first time even if they have been coloring for decades,” Shapiro said. He also highlighted an uptick in Clairol’s Root Touch-Up for those who want a 10-minute solution to cover roots in between appointments. 

Brands for textured hair care blossomed during quarantine as many consumers could not get to hair salons for styling or products. Many of these brands are owned by Black female entrepreneurs. Yet, what has emerged during COVID-19 is the selling potential of the brands stretched beyond race. 

Moisturization
Perhaps there is no better example of a category that is booming during COVID-19 than soaps and hand sanitizers. That boom had a halo impact on facial/hand and body moisturizers. Hand sanitizer volume jumped 178%, according to IRI. Liquid hand soap sales also benefited, showing a 36.2% sales increase in the same period. All of the drying out boosted products for hands and body along with sales of facial moisturizers, which were up 18.9%. 

Entering the market at a key time is Cincinnati-based Procter & Gamble’s Olay Body Wash with Niacinamide, a form of vitamin B3 and an essential nutrient that contributes to general skin health.

Eye Color and Foundations with Benefits
Overall, there is no denying women have been buying less makeup, especially during quarantine. A recent NPD Group survey cited 20% of respondents plan to wear less makeup even when things normalize. 

Lip color sales are sagging thanks to mask wearing, down 12.3% for the 52 weeks ended June 14 in mass doors tracked by IRI. One bright spot is eye care, where early indications show that women are buying more products to make their eyes standout. Eye combo (palettes) sales jumped almost 12%. 

“From March onward, as we saw people across the country begin wearing masks, eye has been the strongest-performing color cosmetics category, with the spread further increasing between eye and face trends from March to June,” Coty’s Shapiro said. “Our brands have benefited from this more robust consumer demand for eye.” Coty’s brands in color cosmetics include CoverGirl and Rimmel. “The new CoverGirl Exhibitionist Uncensored Mascara launched in January and over delivered its launch expectations despite COVID,” Shapiro said.

Rimmel Mascara consistently has been outpacing the mascara category with its best sellers within the Scandaleyes and Wonder franchises, according to tracking data.   

While makeup suffers, skin care is building — up 4% per IRI data — as people attempt to look better on Zoom calls. Companies such as Coty with its CoverGirl franchise are leveraging the “skinification” of makeup to try to generate a sales spurt in the category. “Our launch of CoverGirl Clean Fresh Skin Milk in January, with CoverGirl Lili Reinhart, delivered against consumer demands for both traditional foundation benefits of a lightweight feel and dewy finish, as well as a moisture boost to skin and nourishment with ingredients consumers recognize like hydrating coconut milk and aloe extract,” Shapiro said. 

Celebrities and TikTok Stars
TikTok has become the new breeding ground for beauty trends. People were addicted to TikTok during quarantine, often glued to tips and tricks from TikTok personalities, or learning new dances. Revlon, in fact, tapped Megan Thee Stallion, known for her song “Savage” — a popular backing track for viral TikTok dances — as its newest ambassador. The move looks to capitalize on viral fame as Revlon eyes additional sales generators.

Lili Reinhart for CoverGirl

TikTok influencer Addison Rae also announced the launch of her own beauty brand, Madeby Collective. It debuts with six makeup items online. 

Not to be outshone by the latest online sensations, TV and film celebrities are trying to wrest power back from influencers. Tracee Ellis Ross and Taraji P. Henson continue to grow their hair brands and, in an interesting twist, e.l.f. is partnering with Alicia Keys — known for her no-makeup look — for a lifestyle beauty brand.

“She’s been wanting to do something in beauty and wellness for quite some time,” said e.l.f. CEO Tarang Amin. The company calls the launch a culmination of Keys’ personal skin care journey with “skin-loving, dermatologist-developed, cruelty-free products.” The lifestyle beauty brand, which will roll out in 2021, will be wholly owned by e.l.f., and Keys will become a shareholder, Amin said.

Beauty with a Purpose
Companies with empathy and a stance are expected to be sought out by consumers in the post-pandemic period. Those that converted plants to make hand sanitizer won consumers’ hearts, especially such companies as Coty that donated to front-line healthcare workers. Additionally, more shoppers looked to buy from Black-owned lines as the killings of George Floyd and Brianna Taylor sparked protests and renewed focus on race in America.

Even brands not owned by people of color took a stand.

We worked to support the Black Lives Matter movement. Through our brands, we immediately created space for dialogue on race and justice amongst our social communities and made meaningful donations to organizations like NAACP and Black Lives Matter.
Kevin Shapiro, senior vice president of U.S. marketing for consumer beauty at Coty.

“From a company-wide perspective, we communicated openly about our corporate diversity makeup, acknowledging improvement is still needed and bolstering or creating diversity councils across our network.”