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March 25, 2020

Opportunity for beauty retailers as salons close amid Covid-19 lockdown

By GlobalData Retail

Amid the Covid-19 pandemic, sales opportunities for retailers are scarce. While health & beauty retailers are somewhat protected by the need for everyday essentials, sales will still fall this year owing to decimated demand in categories such as fragrance. While not enough to offset the overall decline in health & beauty sales, retailers must cater to consumers now finding themselves acting as their own beauticians, hairdressers, barbers and manicurists.

With enforced lockdowns across many countries, essential health & beauty items such as paper products and bathroom toiletries are being prioritised, with more frivolous purchases abandoned by many. However as the weeks go by, and shoppers want to treat themselves and regain a sense of normality, we expect them to seek out at-home beauty and grooming alternatives now that their usual destinations for treatments are temporarily closed. We therefore expect to see an increased demand for products such as hair dyes, hair removal creams and wax strips, self-tanners and nail products, among others, as consumers strive to maintain their beauty regimes.

59.8% of consumers globally use salons and spas for beauty or grooming treatments, with 18.9% attending appointments at least once a week, according to GlobalData’s Q3 2018 consumer survey. While usage is higher among females at 65.4%, attending salons and spas is particularly rife among younger shoppers, with 74.1% of 25-34s receiving treatments – with the under 44s therefore more likely to replicate salon treatments at home during lockdown.

beauty retailers

The survey also highlights the opportunities by country, with India, which as of March 24 is subject to a 21-day lockdown, seemingly holding the most potential given 84.5% of consumers attend beauty or grooming treatments at a spa or salon. However in lockdown e-commerce becomes the focus, and just 2.6% of health & beauty was purchased online in India in 2019, and while we expect this to rise during the Covid-19 pandemic, the opportunity remains with bricks-and-mortar retailers that are allowed to stay open. Online health & beauty penetration is however higher in countries like Australia, the UK, and Germany (at over 8%), meaning there is greater potential for beauty brands and retailers to satisfy demand online. Guidance, including how-to tutorials, are essential to give shoppers the confidence to tackle treatments at home.