Makeup Industry Handles Coronavirus and Racial Protests
Source:inquirer.com
From:Taiwan Trade Center Chicago
Update Time:2020/07/08
In light of the coronavirus pandemic and the rampant protests nationwide, the makeup industry has endured ups and downs as it attempts to stay afloat.
Though there has been a spike in online shopping, it has not made up for the loss of profits due to the pandemic. Makeup giants like Ulta and Sephora said that the online profits are not enough to compensate for job furloughs and families’ limited budgets caused by the economic crash.
Particularly hard on companies is the loss of in-person product application. Makeup companies often have attracted customers by allowing them to try makeup on before they buy it. Since stores have been temporarily closed, the large audience of their buyers who shop in-person for the “experience” has been lost.
As a response, Ulta and Sephora have launched the virtual application of makeup, which attempts to fulfill the shopping experience out-of-store. Customers can browse and pick a variety of different makeups to “apply” to their face virtually. This launch helped the recent downturn of profits for these companies, but was not enough to rescue the full amount they had lost, which was $1.7 billion for Ulta.
Other companies, such as Louis Vuitton, have similarly struggled. Louis Vuitton reported a 19% decrease in their perfume and cosmetics department so far this year. Even with this decrease, the LMVH’s stock rose by more than $4 per share, while Ulta’s understandably fell.
In addition to the pandemic, racially fuelled protests across America after the death of George Floyd have created another problem for stores in the makeup industry. Ulta, Sephora, and Louis Vuitton all remained silent on the physical damage and looting of their stores in cities amid the protests.
Overall, the beauty sector is slightly more stable than other industries since the economic crash. Though it will likely see a 30-35% decrease across the industry, consumer data showed that high-end beauty suppliers have trended upward throughout April and May and online shopping is expected to continually increase.
Source:https://www.inquirer.com/business/retail/beauty-coronavirus-industry-outlook-20200613.html