The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Welcome to BoF's Beauty Newsletter, featuring members-only analysis and the week's top news from the front lines of the global beauty business. Subscribe here.
NEW YORK, United States — In tough economic times, consumers tend to spend more on small luxuries, the so-called lipstick effect.
When the history of consumer behaviour during the Covid-19 pandemic is written, “the eyeliner effect” might make a cameo instead.
Beauty brands say business is booming — online, at least — even as major economies nosedive and millions of people find themselves suddenly unemployed. But now that face masks are the accessory du jour, lipstick is out and mascara (or lashes, concealer, eyeliner, skin-care products and anything else that can be applied to the upper third of one's face) is in.
Michelle Hill, an assistant editor for an academic journal, has killed time during quarantine at her parents’ house in St. Joseph, Ill. perfecting four Harry Potter “house-themed” beauty looks for her YouTube channel.
A since sold-out “Witches and Wizards” collection from Elegant Lashes is just one of several online orders she has placed since the state issued a stay-at-home order on March 21. She also bought micellar cleansing water, an oil-based cleansing balm, an exfoliating solution, eyeliners and more eyelashes, all from Ulta Beauty. She said she hasn’t bought any non-beauty products online since quarantine began, aside from blue light glasses.
Hill said she’s spending more on skin care and eye makeup. A pre-pandemic purchase of Jeffree Star’s “Blueblood” palette, used to recreate the glitzy, holographic makeup Halsey wore on the cover of her “Manic” album, feels out of step with the times, she said.
“It doesn’t feel important with everything going on,” Hill said of the pricier, more extreme colour cosmetics she piled on before the coronavirus outbreak. “Coronavirus has changed just in how much I’m willing to spend, even though my excuse for spending is that I will have it for my social media. But even that doesn’t feel right at the moment. It’s not essential.”
Beauty brands and retailers like Ulta and Sephora are counting on customers like Hill to get them through the crisis. Brick and mortar retail is essential to these businesses, counting for approximately 80 to 90 percent of North American revenue at the two chains.
It doesn't feel important with everything going on.
E-commerce is making up some of the gap. Ulta’s online sales for the last two weeks of March were up by 63 percent from a year earlier, according to research firm 7Park Data. A single item, Tarte’s Shape Tape concealer, contributed 10 percent of sales in the week ending March 21, while four of the five bestsellers between March 15 and March 28 were eye products, including an Anastasia Beverly Hills eyebrow pencil, a Benefit mascara and Stila eyeliner. Sephora’s top seller was Khiel’s eye product, 7Park said.
In the first half of the month, before Ulta shut most of its stores, e-commerce sales were up only 27 percent and the top-selling items included a Kylie Cosmetics highlighter and Physicians Formula’s bronzer.
Ulta and Sephora both declined to comment.
The pandemic is another hit to an already challenged makeup category. But beauty may be poised to weather the down economy better than many fashion brands. The beauty industry sells attainable aspiration, meaning someone who may be unable to buy a designer dress can at least buy similarly luxe lipstick, sometimes even from the maker of that unaffordable garment.
Those affordable luxuries can act as a pick-me-up for the millions who are self-isolating but hope to maintain at least part of the grooming routine they followed before the coronavirus.
Leonard Lauder, son of Estée Lauder and the chairman of The Estée Lauder Companies, has championed "the lipstick effect," as this phenomenon is known, suggesting that people will buy cosmetics no matter how bad the economy gets. The idea dates back to the Great Depression, and industry watchers point to sales spikes in 2001 and 2008. Some have challenged the notion of lipstick as an economic marker, but early signs indicate momentum in the beauty sector even as McKinsey and BoF forecast fashion sales plunging by nearly one-third this year.
So why the uptick in eye products specifically?
Many want to appear fresh-faced and “awake” on video calls with coworkers, and it doesn’t take much skill to achieve that effect with eye makeup. Plus, the adoption of masks, scarves, bandanas and other protective coverings has put increased emphasis on the top portion of the face. Dramatic lashes and using concealer to brighten under the eyes has taken on new importance in the morning routine.
It’s this demand, plus previous investments in digital channels, that could help beauty retailers buck a recession, said Oliver Wright, global lead for consumer goods at Accenture.
Shoppers prefer to buy makeup in stores, where they can swatch and colour match. But they will buy online if necessary, and brands have already made big investments in selling their products digitally, with virtual try-on technology and loyalty programmes (Ulta's has tens of millions of members) and by embracing TikTok challenges.
“Retailers that have an online presence or brands with a strong direct to consumer presence – these have the upper hand,” said Andrea Szasz, principal in the consumer practice at Kearney, a global strategy and management consulting firm.
This will define consumption for the decade.
Now that consumers have no choice but to shop online, these tactics will only grow in importance. E-commerce sales are spiking, and the channel won’t give up all of those gains even after stores reopen, analysts say.
“[The pandemic] hasn’t introduced trends we weren’t aware of, it’s the scale and speed with which a lot of these online sentiments have emerged,” said Wright.
Jessica Richards, founder of Shen Beauty, closed her Brooklyn boutique on March 16 and turned her attention to the store’s web site, where sales for March were up by 71 percent year over year.
So are requests for virtual eyebrow consultations. Eyebrow shaping and tinting was a key part of Shen Beauty’s business, which offers services such as facials, microblading, waxing and makeup application. As a result, the retailer will launch digital brow sessions to walk customers through tinting their own brows, either mailing or preparing the products needed for pick-up followed by a virtual tutorial.
The access to digital tools like augmented reality and virtual try-on — or virtual brow consults for Shen Beauty — will drive in-home consumer experiences during the outbreak, said Wright.
“This will define consumption for the decade,” Wright said of the pandemic. “This scale of shifting in the data does...indicate that it is a fundamental reexamination of consumption behaviour.”
THIS WEEK IN BEAUTY
Wearing makeup during a pandemic can make you feel sane. People who stick to their pre-coronavirus skin-care or makeup routines are not just doing it out vanity — keeping a routine could help lift one's mood, according to experts.
Beauty brands look to "essentials." Labels are starting to manufacture personal care items like soap in an attempt to reach customers at home – and maintain their businesses amidst closure orders for companies that produce "non-essential" items.
Huda Kattan stopped taking a salary. The influencer and founder of Huda Beauty, as well as her sisters and husband who work with her, will not take a salary for the rest of the year.
Beauty brands are getting creative with Zoom. The videoconferencing platform has become a way for labels to host beauty classes and debut new products.
Il Makiage to hire hundreds of makeup artists impacted by the pandemic. The brand is starting a "virtual beauty school," employing 200 freelancers that it will pay $25 per hour to teach eight virtual classes per day (which are free to customers).
Beauty enthusiasts turn to experimentation. Taking "making further than it's ever gone" is the goal for some, including a writer who is embracing "outlandish transformations" in lieu of "normal makeup" for Zoom calls.
People are obsessed with shows about plastic surgery. Aspiration and voyeurism — especially an interest in "botched" surgery — have bred a number of shows that "lift the lid" on surgery.