Consumers have been slower to shift beauty shopping from in-store to online, but the coronavirus has changed that.
“We’ve seen a serious change in the rate that consumers are moving away from store-based to online shopping. There’s been a material impact,” said Matthew Moulding, chairman, chief executive officer and founder of The Hut Group, in an interview with WWD’s Samantha Conti at the WWD Beauty Inc Summit.
The Hut Group is a British e-commerce company that operates over 100 international websites selling consumer goods through its proprietary platform technology.
Since the onset of the global pandemic, The Hut Group has received an onslaught of requests from brands to help launch direct-to-consumer websites — fast.
“It’s typically quite a long cycle [to build a website] — it could take 12 months,” said Moulding. “We’ve seen a dramatic shortening of those discussions and we’ve been able to assist far quicker as the urgency is very clear now across all brands that you can’t just rely on store-based [retail.]
Despite the year’s sharp uptick in consumers shopping online, it’s not all bad news for physical retail, according to Moulding. The digital guru is still bullish on stores.
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“Physical retail is still the majority of retail — we shouldn’t lose sight of that,” said Moulding. “But an awful lot of that will transition online over the next two, three, five years and unquestionably change is coming.”
He added that the future of physical retail will likely be heavily experiential. “Physical retail is going to be much more about the experience as opposed to pure transaction,” said Moulding. “It will have to bring something to life.”
Companies that have a digital strategy and act with “urgency” are best positioned to survive the pandemic, he continued. “This isn’t a moment to be spent waiting and hoping that things will sort themselves out.”
The beauty industry is no stranger to change. The advent of social media and influencers has created a seismic shift in the way that beauty products are marketed in recent years. “Twenty years ago the beauty industry was dominated by a smaller number of large, iconic brands that relied on magazines and retail,” said Moulding. “Influencers have really enabled small brands to come together in record time without these huge marketing budgets. The changing landscape as a result of that is huge. In the last five, even three years you’ve seen the greatest level of change in decades and I don’t see this slowing.”
Another recent change is the encompassing of wellness into the beauty category.
The Hut Group recently has been on a beauty wellness acquisition spree, buying brands such as Perricone MD, Christophe Robin, Espa and Glossybox. It also operates the beauty retail site LookFantastic.
Beauty and wellness are nearly identical from a business standpoint, Moulding noted, from basket size to return profile to the influencers that promote the categories. “You have an influencer promoting the wellbeing side, then tomorrow they can be promoting the beauty angle,” he said.