What’s the future for beauty retail – and what does it mean for brands?

Seekology's founder, Rebecca Saunders, sets out her views on the future of beauty retail. 

Beauty retail in the age of Covid-19 is going to be different. Very different. The retailers and brands that will survive are going to be those that are agile and able to respond to changing consumer needs, both in terms of what and how customers buy.

Writing this in mid May, the situation worldwide is still evolving and we are potentially facing tighter and looser lockdowns over a long period of time, which makes it very difficult to plan. As the founder of Seekology, a destination for independent beauty + wellbeing brands, I am passionate about physical retail in this industry where customer experience around feeling, smelling and touching product is so important. And yet as a small business the high costs of physical retail mean I will struggle to commit to paying for physical space until I feel confident this crisis is into a more stable phase.

We can learn, though, from countries that are marginally ahead of the UK in terms of relaxing their own lockdowns. Ulta has reopened stores in the US. The Body Shop has reopened stores in Australia. We will likely see more chains opening up stores across the world in the coming weeks, which will help guide us as to how to manage the complexity of social distancing in a social shopping category such as beauty. My five considerations for retailers and beauty brands are below:

1. Safety will be key

    Customers will be nervous about coming into enclosed environments; ensuring cleanliness will be critical. This could mean adding hand sanitiser stations around the store for both staff and customers, mandating use of face coverings for staff – and potentially customers too – and careful management of the number of people in store, as we are already seeing in supermarkets. Some US stores are even mandating daily temperature checks for shopfloor teams.

    We could also see the rise in appointment booking to enter stores as well as pavement pickups. And to achieve reduced customer numbers in store, floorplans may be updated to accommodate installation of perspex screens and potentially even reducing the number of SKUs available to make more space for circulation.

    Communicating clearly with customers about the steps being taken in store at the store entrance and online will be just as important as what these steps are to give customers the confidence to enter.

    2. Customer sentiment may lag

      Wizz Selvey, the founder of Wizz&Co, a retail strategy consultancy who formerly headed up Beauty at Selfridges, says “Customers will be cautious at first, we will need to see how retailers plan on opening and how they communicate what policies they have put in place to safely serve customers.  Pre COVID19 80% of purchases were made in-store as beauty is such a tactile product”.

      In the short term, I suspect customers may not want to shop on a high street, particularly if it involves travel by public transport. In France, many shops are seeing long queuing times for entry due to the restrictions on the number of customers. The combination of these two elements means we may see more customers shopping at their local shops and also continuing to do a large amount of shopping online; this multichannel customer journey has never been more important. Wizz says “there is a huge amount of research that goes into a purchase digitally too. Retailers should strive to create a hybrid of digital and personal experience to better serve customers.”

      In the longer term, it will be those retailers that provide genuinely compelling experiential reasons to go into store that will win back customers into physical retail. 

      3. Beauty category focus will shift

        Who’s going to be wearing lipstick under their face mask? The dynamics of the industry will shift in the short term, and I predict that for the rest of this year some make up categories will really struggle, firstly due to the widespread use of face coverings and secondly since the hospitality industry is unlikely to pick up significantly until 2021.

        In the next few months, categories such as skincare and hand care are likely to continue to be somewhat sheltered, with Wizz sharing that “selfcare and wellness have been fast-growing categories and this has accelerated further in recent months.  The lines between beauty and wellness are blurring and a more holistic approach to self-care will continue”.

        Again, the longer term dynamics could end up being quite different. Once people start to feel safe, Wizz believes that “services and salons will be in high demand and the lull make up has experienced will see an uplift once people start to go out again - glamour will be back”.

        We hope so!

        4. Testing and sampling will change

          Ulta has reopened stores with no testers at all. The Body Shop only have testers for products that can be sprayed. And the US department stores are tending to restrict testers only to fragrance, or ensuring single use testers where possible.

          This is going to fundamentally change the role of the store; shops will have to figure out how they can display testers that customers to look at but not touch, especially in colour cosmetics. In skincare, where the advice given to customers in store may be important (although we’re seeing plenty of retailers trialling these services online) the value to customers is often in testers and samples too.

          5. Retailers’ responses will be mixed

            Some more conservative retailers may avoid taking significant risks in this time of crisis, and if they own physical stores may be sitting on a lot of stock that they need to shift over the coming months before they have “open to buy” available for new brands and products.

            But there are reasons to be cheerful. Both Harrods and Next are continuing to invest in additional beauty stores, showing that they believe the future of beauty is bright. Also, Wizz thinks that buyers “actually need to be more adventurous otherwise there is even less of a reason for customers to visit the stores. Retailers need to be providing more experiences and more reasons for people to visit. Buyers have always been competitive to provide customers unique or exclusive products and/or experiences and this is now even more crucial”. 

            I run a beauty brand – what does this all mean for me?

            As a priority, think about how you can support and collaborate with your retailer partners to ensure their store openings run as smoothly as possible. Consider how you can offer safe sampling – this may require a bit of a rethink from a packaging perspective, and you may want to consider both single use samples and smaller sizes of your products. Working with your retailers to understand what kind of point of sale displays they will be looking for and be prepared to test and trial different ways of selling, as well as ensuring that their teams are 100% clued up on your products (this may require additional samples for retail teams too).

            Also, I would recommend you do extra homework if you are thinking about approaching new retail partners at this time. All the usual rules apply, but retailers are going to be extremely focused once they are ready to take on new brands. Make sure you have researched their existing range, their customer base and their overall strategy and are clear as to where your brand fits in.

            Finally, good luck. I hope to see lots of you in real life physical stores on the other side! In the meantime, if you'd like to support independent beauty brands, please do shop at www.seekology.co.