The cosmetics and beauty (C&B) is a $50 billion market in the United States. Like many other retail businesses, U.S. C&B companies face significant challenges during the pandemic. This study aims to explore how U.S.-based C&B companies have adjusted their merchandising and marketing strategies to survive the pandemic. By leveraging StyleSage, a big data tool for the fashion industry, we checked millions of C&B items (at the Stock Keeping Unit, SKU level) sold in the U.S. retail market during the pandemic (from March 1, 2020, to May 31, 2021). The results show that:
First, despite the tremendous challenges facing C&B companies during the pandemic, the U.S. C&B retail market is not at all depressing. Cosmetic and beauty retailers prioritized three categories during COVID: fragrance (up 226.3%), haircare (up 150.9%), and skincare (up 165.6%), all see a significant increase in the number of products newly launched to the market than before the pandemic.
Second, U.S. C&B retailers adjusted their product assortment during the pandemic. While most C&B products still target women, the number of unisex products newly launched to the market during COVID-19 saw impressive high growth in some product categories, such as skincare. There is also a notable increase in products catered explicitly towards male consumers during the pandemic.
Third, during COVID-19, the average selling price goes up for most C&B product categories sold in the U.S. retail market. Except for bath & body and haircare, C&B retailers are selling more popular items in higher price-zones. C&B retailers also created new price zones with unique product combinations to fulfill consumers’ shifting demands during the pandemic.
Further U.S. C&B retailers adjusted their discount strategies during the pandemic. Notably, markup products were more commonly sold at a discounted price during the pandemic, although the depth of their markdowns was lower.
The study’s findings provide new insights into the C&B-specific sectoral impact of the pandemic, especially firm-level business mitigation strategies. The findings also call for more attention to the shifting product offers in the C&B market and the emerging product niches, such as unisex C&B items, that may continue to enjoy fast growth in the post-COVID world.
By Valerie Light (2021 UD Summer Scholar, Honors Public Relations Communication major and Fashion management minor); Faculty advisor: Dr. Sheng Lu
This research was presented at the 2021 University of Delaware Undergraduate Research Symposium on August 12, 2021. The full article is available HERE
2 thoughts on “How Can U.S. Cosmetics and Beauty Retailers Survive the Pandemic?”
Great job Valerie on this research! It is hopeful to read that one industry during the pandemic actually did well, seeing how fragrance, haircare, and skincare all have an increase in launching to the market. The increase in unisex products is also an interesting new development in the beauty industry I was not aware of. The information on price zones is also so interesting, I myself bought sample sets during the pandemic to test products. It was the resilience of the industry that allowed them to shift into the COVID world so well!