Beauty industry coronavirus

COVID-19’s Effect on the Health and Beauty Industry

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Since the pandemic came from China more than a year ago,  almost every business in North America took a hit, and the health and beauty industry is no exception. In many cases, health and beauty brands have needed to pivot their business platform to evolve to the coronavirus by producing hand sanitizers and cleaning agents. Despite this, there have been many store closures and business deficits due to the lockdown. Since the global beauty industry generates $500 billion in sales a year and accounts for millions of jobs, directly and indirectly, it is crucial to explore the impact that it holds and to delve into the franchise’s future.

The Impact of COVID-19 on the Health and Beauty Industry 

The beauty industry has been among the top ten sectors negatively affected by COVID-19. The rising unemployment rates, reduced discretionary spending, and lockdown restrictions are played a significant part in the franchise’s loss of revenue. As a whole, customers are more likely to shift to digital platforms for their orders because of social distancing and being more financially conscious because of the uncertain times of the pandemic. 

Health Industry-Fitness during the Pandemic

In 2018, the fitness industry was worth $94 billion, with nearly 70 million consumers visiting health clubs in 2017, with a record 60.9 million Americans being health club members. As a result of the shutdowns, gyms and other wellness centers had to close to comply with social distancing guidelines. Because Americans still felt motivated to stay fit and active at home, fitness and sports equipment rose nearly 23%. Since the pandemic outbreak, people created their own makeshift gyms and turned to live-streaming classes as part of the new normal. For many, fitness became a way to reduce stress and bring consistency to their lives in such a turbulent time that upended so many daily routines.

Consequently, many people took to the streets to protest the lockdowns and COVID-19 response calling to reopen gyms and fitness centers. They conveyed their belief that gyms could also operate with social distancing guidelines, with many gym owners even filing class-action lawsuits against states to address their grievances. 

As gyms and fitness centers reopen as the country bounces back from the COVID-19 pandemic, the effects are still very apparent. In most cases, appointments are needed to comply with social distancing and limit the number of people in the building. Additionally, the standard of cleaning has increased dramatically during the coronavirus pandemic, with equipment being sanitized after every use. Many gyms also have started closing to the public for hours at a time to ensure the safest environment for their customers.

Rise in Smaller, Boutique-style Fitness Centers

Reports have also suggested that smaller, more expensive boutique-style gyms have successfully responded to the coronavirus. Before the pandemic, they still operated on a smaller basis with appointment-based classes; they were prepared for many of the differences that the lockdown would bring. Furthermore, their higher cost of attendance allowed them to stay afloat when fewer people were willing to risk going into larger, value gyms. Premium gyms and boutiques would also likely have more money to invest in higher quality cleaning supplies and technology such as cleaning measures like professional disinfectant treatments and medical-grade UV-C sanitizers. Therefore, the chance of infection in these gyms is likely lower than in larger, value-based gyms. Those going to value-based gyms like 24 Hour fitness or Planet Fitness are also more likely to fall into a middle-income bracket who are more financially conscious during a pandemic who may want to pause on their memberships. 

Beauty/Cosmetics Industry

The beauty and cosmetics industry has long been thought of as an evergreen franchise, one with business potential no matter the circumstances. People will always demand personal care and beauty products since most people want to look and feel their best. Despite this, health and beauty franchises still took a hit from the COVID-19 crisis, with beauty industries being one of the top ten most affected (primarily due to the decreasing demand for color cosmetics). These industries, however, learned how to adapt to these challenges to ensure their place in the business sphere.  

Many were affected differently with skincare, cosmetics, hair salons, and massage businesses leading revenue in the beauty and cosmetics industry. For example, the skincare industry saw a rise in revenue during the pandemic due to increasing interest in skincare products during the lockdown.

Lockdown and Personal Care

As addressed previously, the lockdown increased people’s interest in skincare, and a tendency for self-care, and a desire to invest more in their well-being at home. As such, sales of luxury hand soap in France were up 800 percent the week of March 16, 2020, as the country went into lockdown. Additionally, Zalando, Europe’s most significant fashion and lifestyle e-commerce marketplace, reported a boom in pampering and self-care beauty categories, including candles, aromatherapy, and detox products; sales of skin-, nail-, and hair-care products were up 300 percent. Amazon also saw an increase in sales in nail care(218%), hair coloring(172%), and bath and body products (65%) by large percentages. 

There has also been a considerable rise in retail sales in do-it-yourself (DIY) beauty care because of the large-scale closures resulting from the coronavirus pandemic. Additionally, since people are also warier of close contact with others, they are more comfortable learning beauty techniques such as haircare, skincare, and nail care at home.

Shifts in the Beauty Industry 

On the other hand, with the increase of personal care at home and e-commerce sales at home, department stores, cosmetics stores, and other retailers have a grim future as consumer goods become more readily available over the internet. Expert beauty care will no longer be needed as customers learn how to conduct these beauty practices from their homes for cheaper. However, businesses that successfully evolved with the changing times or already had a plan for increased online sales were better prepared for this shift in digitalized marketing centered on social media.

The beauty market has shifted its focus on selling health products such as cleaning supplies, hand sanitizers, and disinfectants to stop the spread of the COVID-19 pandemic and gain some of their pre-COVID level profits back.  Companies have additionally been offering complimentary beauty services for frontline response workers in the last year. 

Businesses such as Sephora have also followed government standards and stopped their famous cosmetics sampling at their stores to favor individually wrapped sampling to promote better hygiene. While this may be safer, it is a method that does not encourage sustainability, a trend that transcends the health and beauty industry.

Current State of the Health and Beauty Industry 

Beauty brands and retailers such as L’Oreal and Estee Lauder are currently seeing their e-commerce sales double that of pre-COVID levels. The beauty market predicts a 20-30% increase in sales in 2021 as personal care products become more mainstream for individual use, according to McKinsey and Company’s May Beauty Report.

Health and beauty businesses have been selling soap and other sanitizers to contribute to the health crisis and increasing their profits. Companies such as Colgate-Palmolive have seen an increase in net profits up 28% in the previous year. 

Since customers have been mandated to wear masks since the start of the pandemic, they are increasingly less likely to invest in products such as makeup and fragrances. It has been seen that 66% of people are currently wearing less makeup when compared to last year, with 17% of people saying that they are no longer wearing makeup. These numbers are subject to change post-COVID. 

While the COVID-19 outbreak has caused a significant shift in business practices for the health and beauty industry, it has been seen that it’s nothing they cannot handle. Companies that successfully took this to their advantage and shifted to e-commerce sales have a high success rate in the industry. While the face-to-face aspect of makeup and fitness has been sacrificed, there is an excellent opportunity for change for supply chains and startups that have seen a downward trend in profits. 

Industries have found a way to bounce back and serve the needs of the public, so it is safe to say that it is not the end of the road for beauty and health companies. Their mission to make customers feel and look their best shortly as the coronavirus nears its end. Personal health and care have always been at the forefront of people’s desires, and the industry has prioritized staying afloat no matter the odds.



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