So, how is the industry responding, and what trends will we see drive beauty retail in the months ahead?

Integrating social elements into ecommerce

According to Accenture research, consumers are now four times more likely to purchase their make-up and personal care products online compared to pre-pandemic. This means that – despite an expected surge in demand for in-person beauty – brands are continuing to invest in online and omni-channel experiences to engage consumers.

One thing that is missing from beauty ecommerce is the social element of shopping in brick-and-mortar stores, and not just in terms of interacting with store employees. 

Estée Lauder’s new UK website for Clinique not only includes virtual consultations, but according to Vogue Business, it will soon open this feature up to allow multiple friends to shop together, essentially replicating the social experience of shopping in physical locations. Currently, Clinique allows customers to book online classes, which also includes the option to invite friends.

The importance of peer-to-peer connections for shopping has also led to the rise of social shopping platforms like Squadded, which was created by former L’Oréal brand manager, Elysa Kahn.

By adding the Squadded extension to their browser, consumers can shop together with friends on participating sites like ASOS and Boohoo, enabling them to give opinions and add items to a shared wishlist. While Squadded was launched during the pandemic – largely as a way for teens to shop with friends in their online social network – the concept could become a way for beauty retailers to drive digital experiences in future, where social is a key component.

A resurgence for concept stores

With Covid-19 accelerating consumer demand for AI and AR technology, beauty brands and retailers are re-focusing on concept or so-called ‘phygital’ stores to facilitate an omni-channel experience. 

One example of this is MAC, which opened its NYC Innovation Lab in late 2020. According to MAC, as “the discovery of products is done on social and digital networks… the role of the store is to become a place of experience and entertainment.” As such, the focus is on discovery and personalisation, with 16 virtual mirrors enabling customers to experiment with different looks, and a station designed for shoppers to create their own eyeshadow palettes (complete with personalised stickers).

After testing make-up, shoppers can also ‘save’ looks to their mobile phone, meaning they can go home and purchase seamlessly at a later date. In short, this enables online and offline to work in tandem rather than as separate experiences.

Elsewhere in brick-and-mortar beauty, Amazon recently launched its first ever Amazon Salon in London’s Spitalfields to trial technology, including QR product codes and AR to virtually ‘try on’ hair colour. While the store is thought to be a way for Amazon to enter the professional beauty market (and promote products to SMEs via its marketplace) – it is also a way to determine just how receptive beauty consumers will be to these types of in-person, technology-driven experiences. 

Beauty advisors to become micro-influencers

Throughout the pandemic, there has been renewed demand for digital beauty solutions, as consumers have increasingly turned to technology as a replacement for in-store consultants. Examples like L’Oréal’s Modiface and Perfect Corp’s YouCam enable consumers to virtually ‘try on’ make-up, helping to drive both engagement and sales. Concerns around hygiene and safety in-store have also made the technology more relevant to consumers.

So, with consumers increasingly comfortable with this type of technology, brands are figuring out (and in some cases reassessing) the role that humans and in-store consultations will now play. As such, it is likely that we will see further integration of technology into the omni-channel experience, with brands using it to empower and enhance the role of retail advisors.

One example is beauty brand Shiseido, which is investing in the education of its employees. According to Cosmetics Design, the brand’s digital academy is teaching over 7,000 students to be able to use AI and AR tools, enabling them to improve the physical experience of consumers. By empowering employees through knowledge of technology, Angelica Munson, global chief digital officer at Shiseido, suggests that their role will become even more integral. “By definition, these beauty consultants and make-up artists, have become micro-influencers of the brand. Really, 2021 is going to become the year of the empowered beauty consultant.”

Another way that beauty retail employees can enhance their influence is through social selling, enabled by software like Replika. Replika enables brands to activate a network of social sellers, also allowing them to take a commission of sales. According to Pymnts, Sephora is using Replica “to provide its in-store personnel with a turnkey social selling “My Sephora Store” to encourage online sales and forge stronger customer relationships.”

Meeting demand for sustainability

Finally, a new report by The British Beauty Council suggests that not only is sustainability a growing concern for beauty consumers – but that they are now also willing to hold brands to account. 

According to survey findings featured in the report (based on a poll of 3,000 UK consumers), 91% of people want less packaging in beauty, while 88% want refillable packaging for cosmetics. Furthermore, it found that one in seven consumers surveyed who had changed beauty products from April to July 2020, had switched in search of a more environmentally friendly product or brand.

The industry appears to be taking heed of this, with many big brands now investing in refillable options – despite these solutions being costly. The upside, however, is that they can help to drive customer retention; Glossy reports that 20% of online business at Kjaer Weis is for refills for previously purchased packaging, with the brand seeing over a 30% retention rate. 

While sustainability might be more aligned to luxury beauty, even large and mass-market beauty brands and retailers are also taking steps to meet this new consumer demand. Zara’s recently launched beauty collection, for example, comes in eco-friendly and refillable packaging – a small step in the right direction for the fast fashion retailer, who is often criticised for promoting mass and rapid consumption.

L’Oréal is also taking sustainability seriously, but despite demand from some consumers, the company insists that beauty brands still need to work hard to educate people on the importance of recycling and the benefits of re-fillable packaging.

Vismay Sharma, president of L’Oréal SAPMENA explains that “this will all depend on education. We have to educate our consumers; we have to provide them with the resources to do the right thing.” With consumers increasingly looking for transparency from brands, doing so could be a differentiator in the beauty industry going forward.

Retail