A Bullfrog barber shop in Bergamo, Italy.

MILAN — The pandemic pushed Italian cosmetics companies’ boundaries further in terms of agility and flexibility, not only accelerating their digitalization significantly, but also creating seismic shifts in their approach to business — which veered from global to local — and in drawing attention to niche brands, sustainability and customization.

Even if it imparted valuable lessons, COVID-19 inevitably came with a negative impact sales-wise. According to preliminary data released by Cosmetica Italia, in 2020 total sales of Italian beauty companies were down 12.8 percent to 10.47 billion euros compared to 2019.

Exports decreased 16.5 percent to 4.1 billion euros, with the cosmetics suppliers being the most affected by the contraction in international demand as their sales were down 17.5 percent to 1.37 billion euros last year.

Intercos Group’s founder and president Dario Ferrari confirmed that one of the company’s key changes was “the management of the volatility of demand and of a large number of new projects of smaller scale compared to the past, which is attributable to client’s greater attention on stocks.”

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“Like everyone else, we had to manage the consequences of the pandemic on customers’ demand, which led to calendar shifts and revisions of order’s quantity, also in relation to the different countries of distribution and [our clients’ own] business model, with a greater penalization for the less online-oriented ones,” said Cecilia Schena, senior vice president of marketing and business development of Chromavis. “The context of uncertainty and poor visibility on the future in terms of planning turned into an inevitable challenge to become more flexible and commit to increasingly adopt a start-up approach.”

To this end, the company turned its “one-to-one relationship with clients into an opportunity” by favoring the development of personalized solutions, with the peak of this approach reached by the Atelier project enabling clients to create small batches of customized products and take them to the market in just three weeks.

“Consumers are looking for personalization and in this context suppliers are being asked to become more consumer-oriented,” confirmed Kiko‘s general brand manager Heike Linnemann, who believes customization could play a big role also in luring consumers back into brick-and-mortar stores.

With its physical units closed for months, Kiko is among the beauty players that saw a surge of online sales, up 48 percent. Throughout 2020, the company also adjusted its product launches according to consumers’ changing preferences, which veered toward skin care and self care products, nail care, as manicure shifted from salons to homes, and lastly, no transfer cosmetics, with particular attention on the eye category considering the use of sanitary masks.

“Beauty, including color cosmetics, continues to play an important role in consumers’ life. The way a person feels after having applied makeup is one of positive emotion, as makeup gives confidence,” said Linnemann, confirming that makeup’s use was driven also by the frequent video calls — although that wasn’t enough to combat sluggish sales.

Yet for Ferrari, color cosmetics will regain traction when the restrictions to social life will cease, positively forecasting a comeback in the second half of the year. Overall, the slowdown in makeup demand hampered Italian suppliers’ performance, as local manufacturers are specialists of color cosmetics. A diversified production helped Intercos to counterbalance the performance of makeup with those of the skin care and hair care categories.

Intercos’ global scale also played in Ferrari’s favor, securing the continuity of the corporate activity. The executive believes its spread-out presence across three continents will further be strategic as regionalization gained importance compared to globalization throughout 2020, and will remain central for the future.

“We have a very large global footprint which helped us to try and anticipate the effect of the pandemic from the learnings we had from addressing the East,” said the general manager of Davines‘ hair care division Mark Giannandrea. While confirming the consumers’ shift in buying online, he also noted the “general feeling of ‘support local’ when business opens up,” which he defined “fantastic for SME independent business and great for local communities.”

Romano Brida, founder and chief executive officer of men’s grooming brand and barber shop chain Bullfrog, also witnessed the trend, as the turnover his company generated through “small, neighborhood shops” and independent retailers — including barber shops, perfumeries and its franchising network — grew and exceeded sales registered in its direct stores, usually located in bigger cities. For instance, the Bullfrog barber shop in Monza — a 40-minute drive from Milan — tripled its turnover in 2020, despite the restrictions.

The new attention to local stores and shift to online platforms enabled customers to discover niche brands, formerly hampered by not being distributed by traditional channels. Often digitally native, these labels also leveraged their communication skills on social media, that gave them an advantage when more established names made a running change in their direct-to-consumer strategies when the pandemic hit.

Hervé Bouvier, global brand director of Comfort Zone, underscored that the “market fragmentation and the emergence of niche or indie brands” has been a growing trend for the last five years but forecast that local labels will grow quicker than imported ones in the respective markets. Adding to their appeal, local labels are perceived as more sustainable for the reduced environmental impact caused by transportation, for instance.

As all companies agreed that sustainability will be the only way forward, for the packaging industry this will have to be combined with heightened expectations in hygiene.

“Many of the new behaviors and needs emerged in recent months, such as the attention to hygiene, safety and prevention, will continue to be part of our daily life in the future. This trend also includes the increased popularity of packaging that keep the product sterile, such as pump applicators, airless options, sprays that are anti-bacterial and sometimes even self-cleaning, as well as sustainable products,” said Romualdo Priore, marketing director at packaging specialist Lumson.

In light of their increased awareness on sustainable matters, consumers will demand a return to essentiality and ask for product novelties “not to be launched just for the sake of it but to actually bring added value,” Priore said.

For Fabio Franchina, president of professional hair care company Framesi, today’s consumer no longer seeks the lowest price but “the most correct one for a certain standard of product and service.” In addition to the eco-friendly trend, he cited time as key driver in the future.

“Hair salons have learned to optimize their schedules out of necessity, but they will continue to do so to guarantee a top service. Those who will offer high-quality services in less time will be decidedly more competitive and winning,” said Franchina, underscoring that this will additionally boost product innovation, like in a new Framesi hair coloring line delivering the same results of traditional dyeing but in half the time.

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