COVID-19 Opens the Door To A Fully-Digital Beauty Industry
Most Prognosticators Saw a Five-Year Process of New Tech Adoption Condensed into Three Months
The beauty industry, as with most retail businesses, was forced to rethink their pre-COVID-19 approach and reimagine customer engagement in an entirely new context during the pandemic that will set the tone for the shopping experience for years to come.
According to Women’s Wear Daily, online sales at Sephora now account for 70-80% of total sales after the pandemic. Further, the Wall Street Journal reports that in 2020, Ulta’s online makeup sales rose to over 200%. These numbers represent tectonic shifts in the way we find and purchase beauty products.
To gain an understanding of the rapidly changing beauty landscape and dizzying switch to ecommerce, we at Cognizant conducted a global study to identify evolving themes that validated the emerging trends toward digital. To begin with, we found that 35% of shoppers said they would be reluctant to buy beauty products in stores again even after COVID-19 has passed.
We also found that 33% of respondents said they were paying more attention to their appearance, while 50% said they were wearing less make-up during the pandemic. Don’t these numbers appear to go against each other? What does this all mean?
First, buying beauty comes down to a rapidly changing retail experience through non-retail channels, i.e. more digital and less in stores. Pre-COVID, the cosmetics industry relied on high touch paths to purchase, emphasizing personalized recommendations, testing products, samples, and expert advice. In-store customers were able to dip their fingers or swabs into communal free samples. Can you imagine this happening in a post-pandemic world?
With public health protocols and customer apprehension creating new limitations and barriers to in-store interactive purchasing experiences, consumers and retailers are looking for alternative modes of engagement that deliver the same level of experience.
This has forced beauty brands to reimagine their floor spaces and invest in new ways of getting products to customers. A growing number of cosmetics retailers such as Lush, Deciem, and Sephora are converting their retail locations from accessible storefronts to dark stores or fulfillment centers that enable consumers to click and collect with contactless curbside pickup options.
In addition, beauty brands are beginning to adopt transient shopping, where retailers offer temporary store pop-ups as a relatively low-cost way to avoid service disruptions and design new, safe experiences. For example, L’Oreal’s Lancôme developed a virtual pop-up store in Singapore that contains personality tests, selfie-based skin diagnoses, live chatbots, and live streaming with influencers.
And since shoppers are reluctant to come to stores, brands are going to them. There has been a growth of mobile services such as Urban, Prettybird, and Blow, who are offering on-demand, in-home beauty and wellness services, such as massage, makeup, hair and physiotherapy in the safety of customers’ homes.
As more retail environments deploy safety measures to help stop the spread of COVID, traditional service relationships also continue to evolve. However, while some have chosen to go completely virtual, others are finding more success by shifting to hybrid retail experiences that are immersive, interactive, and digitally-enabled.
This hybrid experience includes live streaming tutorials, digital testing and try-ons, single use samples, and immersive shopping. As people spend more time throughout the day physically isolated from, yet virtually connected with others, consumers are becoming more conscious of their appearance and the digital representations of themselves.
Time spent on social media has increased during the pandemic and social virtual reality is catching on. Filter routines, via Instagram and Snapchat for example, are replacing real-life makeup regimens. Even Zoom recently added a “Touch Up My Appearance” button. How many can admit to instantly clicking on that tab?
Beauty brands are also beginning to partner with AR artists. The “Stormi Butterfly” filter launched on Instagram by Kylie Cosmetics is another example of a digital filter that adds life to a “Zoom” face.
Influencers like Kylie Jenner have gained a lot of traction throughout the pandemic, and beauty brands are tapping these digital experts as an extension of their online customer experience. As more customers venture online, influencers continue to play a big role in helping to share brands’ messages and stories, democratizing products and demonstrating their uses.
Young consumers were already engaging influencers and digital platforms long before the pandemic struck; however, the pandemic has made shoppers of all ages place more value in online appearances, since many of us are now seen by more people online than in person.
Given these shifts and innovations, what does the future hold for retail beauty post COVID-19? The retail experience has gone from static, linear, and transactional to fluid, dynamic, and relational. And non-retail beauty channels have gone from high-touch, in-store and live sensory to high-tech, virtual and hybrid immersive experiences.
These trends will continue as working from home and the hybrid home/office make digital presence and appearance a priority - a new phenomenon born out of a year of quarantine. An emphasis about how you look on video, and products and filters to help you look your best through a screen, are true representations of the future of retail beauty in the 21st century.
--ABOUT THE AUTHORS--
Rajeev Saraf - Head of North America, Retail, Consumer Goods, Travel & Hospitality at Cognizant: Rajeev serves as Head of North America, Retail, Consumer Goods, Travel & Hospitality at Cognizant. He is a senior executive with more than 30 years’ experience in global IT consulting services, spanning strategy, operations, business and practice development across multiple geographies, roles and services. Currently based in the US, Rajeev has also worked in the UK, Australia and India. Rajeev has held a variety of leadership positions at Cognizant over 19 years in both horizontal and vertical practices. Prior to his current appointment, he was VP of Digital Process Automation, Customer Experience and Integration; and held leadership roles in IT Infrastructure, and Banking and Financial Services. Rajeev earned a Bachelor of Engineering from the University of Mumbai and a Master of Technology from the Indian Institute of Technology.
Maya Oczeretko - Human-Centric Design Lead for Idea Couture, A Cognizant Digital Business: Maya is a human-centric innovator with a passion for shifting industry away from dated models of innovation and experience transformation. She is an advocate of the digital revolution and works to intentionally move clients into the spaces of design thinking and agile innovation. Her experience spans across consumer-packaged goods and retail industries having led innovation and experience transformation for some of the world’s most loved brands – including Oreo, Pepsi, Frito Lay, Kellogg’s, and Mars. Maya holds an honors degree from York University and an MBA from the University of Western Ontario’s Richard Ivey School of Business.