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How Might Delta Impact U.S. Beauty Retail?

Beauty retail is poised for growth, despite the ongoing pandemic and spread of the Delta variant, experts say. Here's why.

Beauty retail will need to bolster its pandemic-proofing toolkit as the Delta variant causes a surge in worldwide coronavirus cases.

U.S. beauty retailers have turned to technology like virtual try-on and live shopping, as well as offerings such as curbside pickup and same-day delivery, to make do in COVID-19 times. The past year-and-a-half’s learnings will come in handy in the coming months, and experts point to omnichannel as a sure bet in the pandemic’s indeterminate evolution.

Paula Floyd, founder of HeadKount, an agency that helps brands build their retail strategies, estimated that 70 percent of beauty retail was done in-store pre-coronavirus.

“That completely shifted during COVID-19, obviously,” Floyd said, noting that brick-and-mortar momentum has since picked up and dot-com sales have begun to soften.

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“I believe the reason why is that 80 percent of clients in-store are starving for attention,” Floyd said, citing Headkount survey results. “They’ve only had one choice during COVID-19, and that was to shop online.”

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Where consumers are shopping is shifting, too, as secondary markets are now thriving, Floyd said.

“Times Square, which used to be the number-one beauty market, is now way behind the non-city-dweller markets, like Corte Madera in Marin County, [Calif.],” she said. “You’ve got Houston [and] South Florida crushing New York numbers. People aren’t commuting into the city anymore, because they’re not required to, and they never had a lot of tourism, so they didn’t feel the impact like Times Square.”

Speciality beauty retail in the U.S. experienced a 33 percent sales decline in 2020 versus 2019, Euromonitor reported. This year’s sales are expected to reach $18 million, a 12.5 percent year-over-year growth, according to Euromonitor forecasts.

Kayla Villena, a beauty and fashion consultant at Euromonitor, said via email that beauty retailers “have had enough time to implement omnichannel strategies that work” for their customers. Retailers will need to further build on those strategies in light of the Delta variant.

“Retailers and their brand partners should prepare for an elongated recovery for makeup, which is still showing softened demand despite improvements from last year,” Villena wrote. “They should also focus on gearing up for the holiday season and making those omnichannel experiences as seamless as possible for consumers. This is even more important now, since consumers fatigued by the pandemic will be eager to self-indulge in beauty items and will want to do so in a safe way.”

Innovation in terms of hygiene is inevitable. Throughout the U.S., restaurant and bar businesses have begun requiring proof of vaccination, denying entry to those unable to produce. Perhaps, said Lucie Greene, founder of futures consultancy Light Years, beauty retailers will follow suit.

“You’re going to see innovation [such as] contactless visual recognition, verbal recognition technologies or even staff-free,” Greene said. “There’s going to be a lot more of this idea of certification. There’s going to be a lot more innovation in terms of retail environments, promises of having air purifiers, UV cleaners, as you’ve already seen in the hospitality space.”

Experiences will continue to shift online, with entertaining content leading the way.

“That’s becoming the way that brands market, build community and create emotional connections with audiences — maybe less so the store,” Greene said. “YouTube’s ramping up its beauty festival. And then all these gaming types. Beauty entertainment is replacing the offline festival. It’s the new BeautyCon.”


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