The Fragrance Foundation France

BW Confidential reveals findings from its COVID-19 International Beauty Survey Part 2: Emerging from the Lockdown

BW Confidential sought to find out how beauty will perform over the weeks and months ahead as many countries begin to lift lockdown measures and re-open stores.

We asked industry executives how they see the impact on sales both online and in brick-and -mortar stores and what they view as the key challenges as stores begin to re-open.

A total of 392 executives responded to our COVID-19 International Beauty Survey Part 2:  Emerging from the Lockdown, from the distribution (local market, online and travel retail), brand, and supplier (formulation and packagers) communities from the period April 27-May 3.

Almost half (49%) said that they expect the market to see a strong decline in sales for 2020. A majority (57%) also said that although stores will soon gradually re-open, it will take much longer than three months for sales to recover. Indeed, one of the key concerns among executive comments is how long it will take for the market to rebound, with most not seeing any bounce back before the end of the year. This is especially the case given how long it will take for the lockdown measures to be completely lifted and how most stores will be operating at a reduced capacity for the foreseeable future due to social-distancing recommendations.

While skincare is the category that is proving most resilient, there are many questions over fragrance. This is especially in terms of its performance in the last quarter of the year, which is critical for the category’s sales.

This survey follows our poll conducted from March 19-24 to find out how the industry is dealing with the crisis and executives’ plans in terms of cuts in personnel, marketing and a possible investment in digital.

Below are the key findings of the survey:

  • In terms of problems facing stores once they re-open, some 43% highlighted the lack of guidelines concerning hygiene protocols as the main issue for retailers. Respondents said there was confusion around the issue, and they were unsure how these measures would be put into practice. Some 30% said that being unable to attract traffic would be the key issue for retailers. while 11% underlined that products being out of stock due to the interruption in production would be the main problem.
  • Asked whether there would be an increase in discounting as brands and retailers look to offload stock, 74% said this would be the case. Only 2% responded no, with the remaining 24% not sure. Some 81% of brands said they expected to see more discounting compared with 67% of those in the distribution sector.
  • When it comes to the balance of sales online versus those in brick-and-mortar stores, 38% said that consumers will continue to buy online rather than in stores once retailers re-open. Some 30% said that online sales will decline as stores open and begin selling again. Some 13% said that both online and brick-and-mortar sales will decline, while 19% stated that both will increase.
  • Concerning the outlook for 2020 compared with 2019, 49% of respondents said that the market would see a steep decline in sales this year. Some 67% of distributors predict a steep decline, while 31% of brands and 53% of suppliers believe the fall in sales will be severe. Some 38% stated that there would be a moderate fall in sales this year and 2% said they foresee a slight decline. Only 2% answered that there would be an increase in sales for the year versus 2019, while 9% responded that sales in 2020 would be flat.

A total of 392 industry executives responded to the survey from April 27-May 3, 2020. BW Confidential would like to thank all those who took part in the survey.

BW Confidential has been reporting on the COVID-19 crisis and how it will impact the fragrance and cosmetics industry since January. Stay up-to-date with all the latest news on the crisis at our COVID-19 hub: https://www.bwconfidential.com/covid-19-hub/

BW Confidential has also begun publishing the COVID-19 Industry Talks series, which asks top executives in the industry for their views on the crisis and getting through it.

BW Confidential launched the COVID-19 World Tracker (updated daily) in a bid to inform readers of the different lockdown measures – and therefore store and business closures – around the globe, as well as travel restrictions. https://www.bwconfidential.com/bw-confidential-introduces-the-covid-19-world-tracker/

For more information on the international beauty industry: www.bwconfidential.com