Prestige Beauty Industry – North America Competitive Dynamics & Coronavirus Impact

Prestige beauty industry segments face uneven impacts from COVID-19

An overview of the main trends started the discussion. Consumers are particularly interested in results-driven products at present, although this has always been one of the main drivers, according to the specialist. Interest in ingredient-based products, “especially in prestige”, is also on the rise, with shoppers searching online for certain ingredients before checking which items contain these.

When discussing which segments have been the least impacted by the pandemic, the specialist explained that “companies or brands that have been very true to what we believe is omnichannel retailing have really done very well.” A case in point was dermatology-based skincare, and even though bricks-and-mortar locations were often closed, consumers “found those products online one way or another”. 

Travel retail “will be challenged”, although there does seem to be pent-up demand. This was evidenced by DFS Group’s live-streaming event, where “basically an entire day’s product [was sold] in an hour”. However successful these kinds of events could be, margins are depressed by promotional activity and discounting.

The specialist also focused on how companies are faring digitally. L’Oréal “is probably the best situated when it comes to true omnichannel programming”, with its brands scoring highly on online metrics like Net Promoter Score. Estée Lauder, on the other hand, is weaker in this aspect and “will have to really  step up its game to ensure that they can continue to be a prestige player that is relevant not only to the consumers that are offline but also online”.

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