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