How the Beauty Business Moves Beyond the Cosmetics Counter
Virtually everything core to the $500 billion global beauty industry has been upended by Covid-19: product sampling, makeovers at the cosmetics counter, salon visits, photo shoots, runway shows. McKinsey’s May industry report predicted a 20 to 30 percent decline in revenues for the beauty business worldwide in 2020, and the losses could grow even steeper if the pandemic worsens this fall.
Sue Remes is a highly sought-after beauty industry consultant known worldwide for building brands and launching products. She typically spends as much as half the year traveling for clients like Kevin Murphy, Kiehl’s, and Lancome. The pandemic has grounded her at home in Minneapolis where she is currently working on a brand refresh for locally-based Intelligent Nutrients (soon to be I-N Intelligent) but the phone hasn’t stopped ringing. She talked to TCB about how the beauty industry is adjusting to new realities.
Beauty was hard hit early in this pandemic—in China, for example, sales plunged 80 percent in February. Even in the age of Amazon, beauty brands have remained so reliant on selling through touch and feel. How are brands adapting to the restrictions of Covid-19?
Beauty, at its core, is an experiential journey. A large part of what makes the journey for the consumer, and ultimately leads to a purchase decision, is the ability to try on products. When shops and salons closed down, the multi-sensory experience for the consumer pivoted to a virtual experience. Covid-19 has clearly impacted beauty as we will no longer be able to offer the high-touch experience as we once did in stores. The pandemic has also forced brands to take a much deeper look at safety and hygiene. At the moment, there are no testers, most stores do not allow customers to touch anything and many are not allowing returns on products. Hair salons have had to completely re-think the service experience. As well as operating at reduced capacity, they are limiting services and the numbers of stylists and clients in the salon at one time. Beauty brands, hair salons and retailers are all trying to figure out how they will be able to create moments for the consumer going forward and provide the highest level of service in the safest way. Companies who invested in digital and online capabilities pre-Covid have felt less of an impact and fared better during the pandemic, but everyone is adjusting to the new normal.
How do you reimagine the beauty counter experience?
A lot of brands, particularly in the color cosmetic domain, are looking at technologies that can deliver virtual try-on. This is a technology that has been around for a few years and has been used as an online tool. It’s not perfect but it’s getting better and I believe will become a widely used tool to replace the “try before you buy” experience at the counter. Samples are also going to play a much larger role in the customer’s shopping journey and ultimate purchase decision. Manufacturers are trying to figure out how to offer testers that are clean and hygienic but equally important, housed in something that is not going to continue to pollute the planet with little pieces of plastic. The beauty industry has been a huge contributor in the area of packaging waste, so figuring out how to offer smart sampling options that don’t contribute further damage to our environment is going to be key.
Any brands that have done a good job adjusting their strategy? Who is inspiring you at the moment?
One company that is inspiring me with their innovative approach to sampling is I-N Intelligent [Remes recently started working with the Minneapolis-based brand that was founded by Horst Rechelbacher and is run today by his daughter Nicole Rechelbacher and longtime partner, Kiran Stordalen.] They use a paper-based sample pack that is 100 percent post-consumer recycled made with 100 percent recyclable material. The plastic liner is free from BPA (an industrial chemical that is used to make certain plastics and resins) and non-contaminating to the recycling system making it recyclable with your mixed paper recycling. I love that they are thinking not only about the hygiene and safety for their customers, but also for the planet! It is very full circle, innovative thinking.
You are a valued advisor to many global beauty brands. What sorts of calls have you been receiving due to Covid-19? What do beauty execs want help rethinking or changing?
In terms of rethinking and changing the way we do things, everything—and I do mean everything—is being considered at this time. My colleagues and clients in Europe seem more optimistic about the immediate future than those in North America, but everyone is sure about one thing: given the uncertainty of our future and the long-standing impact of Covid-19, we need to challenge our thinking on the way we used to do business. Virtual try on and distance selling is the new reality. Safety and hygiene safeguards put in place during the pandemic will be ongoing precautions to protect customers and employees. This is a big challenge for everyone since pre-Covid, the goal was to try and get consumers to spend as much time in the store/salon as possible and honestly, the more the merrier! The question brands face now is how to re-design the beauty experience, win and maintain loyalty while customers are reducing the frequency of their visits and spending less time in the store or the salon. It’s no surprise that everyone is looking to up their digital game.
In the midst of a coronavirus pandemic, our country is also experiencing a racial awakening that has prompted virtually every industry to examine inequities. Beauty, in particular, has been called out for a lack of diversity in leadership, on down to product assortment, and investment in BIPOC founders. Do you see any signs of progress or change?
What excites me most is that we are now talking about the amazingly talented, innovative Black female entrepreneurs that have entered the beauty space and that they are getting exposure to a wider audience. Beatrice Dixon of The Honey Pot (I am a huge fan of hers and and a buyer of her products), and Mented cosmetics founders Amanda Johnson and KJ Miller are good examples. These women have raised $1 million in capital, which is incredible considering female founders receive only 2.8 percent of venture capital funding. This gives me tremendous hope for the future of beauty. That being said, there is still a lot of work to do. BeautyIndependent.com interviewed Black founders about the challenges they face to get placement of their brands into retailers. It’s worth a read to better understand their experiences in the industry and how you can support these brands.
Hear more insights from Sue Remes on the beauty industry and carving out a successful career as a consultant, on our podcast, By All Means.