Key takeaways

  • U.S. consumers have been spending less on beauty products since the COVID-19 outbreak, while health and beauty businesses have seen significant decreases in revenue.

  • While declines in beauty and personal care have been lower than other categories, it’s clear that the short-term impact of the pandemic will be felt across the beauty industry.

  • The effects of the COVID-19 crisis and resulting economic decline are unlikely to be completely avoided, but there are steps beauty brands can take to mitigate impacts in the near term.

  • These actions include focusing on what consumers are craving, strengthening digital capabilities, shoring up supply chains and planning for post-recovery business changes.


Over the past few years, growth in beauty and personal care has been outpacing other consumer categories. However, as is true for many other industries, the impact of COVID-19 will be felt within beauty and personal care.

According to a survey conducted on March 18 by L.E.K. Consulting in partnership with Civis Analytics, U.S. consumer change in average monthly spend on beauty has declined ~5%-10% since the COVID-19 outbreak (see Figure 1). From a revenue standpoint, according to data reported by Womply on March 25, over the prior week, health and beauty businesses have experienced -29% decline in average weekly revenue from the same week period in 2019. While overall this decline is lower than many other spend categories (e.g., transportation, entertainment, restaurants, lodging), the short-term impact of COVID-19 will be felt across the beauty industry.

Figure 1
US consumer stated percentage change in average monthly spend since COVID-19 outbreak*

Additionally, the response from beauty retailers and service providers was strong and immediate. Many retailers have closed all stores, including top beauty retailers Sephora (~460 stores on March 17) and Ulta (~1,200 stores on March 19). Many national chain service providers, such as Dry Bar, also proactively shut down all locations while local and regional providers are following local government guidelines.

While it is unclear what the lasting impact of the COVID-19 crisis will be on the industry in the long term, the vast majority of consumers (greater than 80%) expect their spending on beauty categories to return to or exceed precrisis levels, according to the L.E.K. and Civis consumer survey results.

On the backdrop of these challenges is how important it is for beauty industry participants to understand how their specific segment is impacted and consider how to adjust business operations.

Impact of COVID-19 by beauty segment

At-home beauty products: Moderate overall impact

The impact of COVID-19 on at-home beauty products is varied due to the different use cases for many products, ranging from regular daily hygiene to special-/specific-occasion usage (see Figure 2). 

Figure 2
Expected impact of COVID-19 by at-home beauty products category

During these uncertain times, consumers are increasingly looking for ways to take care of themselves that fit into the parameters of social distancing and isolation. As a result, #selfcare has been trending on social media (see Figure 3). Products that give consumers a sense of “self-care” while at home, such as at-home facials, face masks, lotions, essential oils and aromatherapy, are more likely to see consistent demand during this time. Similarly, maintaining or improving skincare regimens is expected to increase due to more available time and the importance to consumers of maintaining healthy skin.

Figure 3
#selfcare spiked as a trending topic in the past few weeks during the coronavirus outbreak period

However, many at-home beauty products are used to enhance a consumer’s outward appearance. With much of the country staying home over the next few weeks or months, the demand for these products is in decline. For instance, as the number of people leaving their homes to go to work declines and many communities are under shelter-in-place provisions, the need for color cosmetics is declining. Other categories such as fragrance, sunscreen, and hairstyling products or tools are similarly impacted. According to Stella Rising, for example, the impacts are already seen as “Perfumes for Women” fell 62 spots in Amazon searches and “Sunscreen” dropped 89 spots in the week ending March 17.

Out-of-home beauty services: Severe overall impact

Salons and spa services including hair, nails, waxing, facials, tanning and other out-of-home beauty services are largely halted (see Figure 4). Whether this is due to government mandates for closing of nonessential businesses or consumer and/or provider fears regarding spreading of the coronavirus due to the close quarters required for these services, the industry is largely at a standstill in much of the country. Large corporate-owned chains such as Blo Blow Dry Bar and European Wax Center (corporate-owned stores) have closed all locations. Other chains such as Supercuts, Great Clips and Fantastic Sam’s, which are primarily franchised, rely on franchise owners to close locations in areas where it is locally mandated and allow them to use their discretion to continue operating in areas where regulations currently allow. Others such as Mynd Spa & Salon have made the difficult decision to file for bankruptcy.

Figure 4
Status of beauty/personal care service businesses by state (as of March 30)

However, for businesses able to navigate the challenging situation, there is a bright future. Significant pent-up demand for services is expected once businesses are reopened. For many salon or spa services, consumers are unlikely to replace them with fully at-home treatments and will wait until they can be serviced by a professional. This is due to the importance of the outcome of the service and the inexperience of performing these services at home. This is particularly true for services that can be conducted only by a professional, such as hair extensions, eyelash extensions and dermatological treatments.

What can the beauty industry do in the near term?

While the effects of the COVID-19 crisis and resulting economic decline are unlikely to be completely avoided, there are a number of actions beauty brands can take to best mitigate the impacts in the near term.

Focus on what consumers are craving in order to drive continued demand

Social interaction: Find ways to connect with consumers that meet the current needs during a period of isolation. For example, providing live demonstrations through Instagram Live, Facebook Live or other streaming platforms can connect a brand to its consumers and build loyalty during this time.

At-home wellness: With the uncertain situation, focus on products/services that are meeting the needs of consumers in their current situation. Products focused on wellness and self-care (e.g., skincare, essential oils/aromatherapy) can draw consumers who are searching for ways to maintain physical, emotional and mental wellness during uncertain and stressful times.

Trial: While consumers are practicing social distancing and isolating at home, they have time and opportunity to try new products. Offering trial kits or sizes allows consumers to try a new regimen, a new product or a new color, and could drive sales in the short term and build loyalty in the longer term.

Strengthen digital capabilities and focus

Ecommerce: While many storefronts are closed, it is especially critical for companies to ensure their products are able to reach customers through other channels, in particular ecommerce. Ensuring these capabilities are set up and able to handle increased demand is critical. This includes service providers who may not typically participate in ecommerce but can offer hair-care products, gift certificates or other support (e.g., booking for future appointments) online as an opportunity to continue to serve their clients while they cannot come into the salon or spa.

Marketing: Consumers are spending unprecedented amounts of time at home, in particular on their phones, computers and TVs. As a result, consumers are engaging with content more than ever, including those who historically did not engage with content. As such, reaching consumers with appropriate messages through digital marketing is highly important, can ensure brands stay top of mind, and may drive consumers to try or use new products, in particular if products are perceived to be meeting a need they have at this time (e.g., self-care, wellness).

Shore up your supply chain

Manufacturing: Assess current manufacturing capabilities domestically and abroad to understand what current levels of risk are within your system and look for alternatives if risk levels are high.

Distribution and fulfillment: Determine current restrictions for product distribution, in particular if fulfillment centers are located in areas where nonessential businesses are closed, to ensure there is still an opportunity to deliver products to consumers. Furthermore, retailers may need to consider shifting store-focused fulfillment to online-focused fulfillment.

Ingredients/inputs: Identify current levels of ingredients and working product inventory to understand the current production runway. Also consider what ingredients or other inputs may be challenging to find in the near term (e.g., plastic) and identify alternative solutions.

Cash management: Identify all outstanding receivables and payables over the next few months in order to get an accurate picture of rate of cash burn. Work with suppliers to negotiate better payment plans or terms where possible and be creative in order to keep cash flowing with lower levels of revenue, as possible.

Plan for post-recovery business changes

Product trial: Once storefronts reopen, consumers are likely to be reluctant to test beauty products in-store for fear of contamination and continued spreading of the coronavirus. Retailers must preempt this change in sentiment by providing digital tools/augmented reality technology to try on products virtually or provide individual trial sizes versus communal products.

Identify channels with pent-up demand: Post-recovery, there are going to be many channels with pent-up demand for beauty products and services, such as salons, spas and hospitality. Brands must take the time now to identify which customers/channels will be most impacted and proactively create a plan to meet their needs as the industry recovers and demand spikes.

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