How do you check the color compatibility of blush or lipstick or foundation in beauty stores if you are unable to touch it or have a beauty expert try it on you? That's what the $500 billion global beauty industry is figuring out with the new restrictions due to the coronavirus pandemic. 

While it has survived economic downturns throughout history, the coronavirus pandemic has brought a new set of challenges to the beauty industry. It is now dealing with restrictions on employee and customer interactions, shoppers' inability to try out testers, and, ultimately, an evolution in user preferences. These significant, unavoidable shifts in consumer behavior have challenged retailers, product companies, and retail design firms to rethink how beauty products are sold in brick and mortar stores

However, all hope is not lost. Much like the recession in 2008, people are still likely to spend money on small luxuries to help themselves feel better both mentally and physically during these unprecedented times. However, how they do it is changing.

Based on InStore Design Display's experience designing, building, and deploying retail displays for the beauty industry, we will discuss the challenges cosmetic retailers and brands are facing. We will also share IDD's tips for how to rethink the in-store experience to overcome the challenges of COVID-19. We recently spoke with Jennifer Walton, an expert in retail display concept design, to gain her insights as well. She has been pivotal in designing the in-store experience for several beauty products such as Stila, CND, Juvia’s Place, and so many more. as well as helping companies to see their potential solutions. 

Challenge #1: Limited Employee and Customer Interaction

Beauty retailers like Sephora and Ulta take pride in their staff's product and industry knowledge. Often, shoppers rely on staff expertise for shade matching and choosing the right product based on skin type and usage. 

Known as "artists," they apply makeup to a shopper's face, so they can see and feel the product at work is a way to influence purchases. However, physical distancing guidelines have restricted this type of interaction. Even when masks are worn, there is still a risk for transmission when within six feet of the customer.

Beauty retailers have a cult-like following. The Sephora loyalty program boasts 17 million members in North America alone. These members are responsible for 80% of the company's sales. Ultamate, Ulta's Rewards Program, is double that of Sephora -  its biggest competitor. Their 34 million members account for 95% of their sales. Loyalty program members both shop and spend significantly more than those who aren't members. 

The lack of interaction with experts leaves a wide gap in the customer's in-store experience. Products sold in luxury retailers also carry a luxury price point, which means buyers want to feel assured that their purchase is a good fit. Brands must find new ways to offer opportunities to educate buyers about their products' benefits and differentiators. 

Challenge #2: No In-Store Testers

Bacteria and viruses spread through both person-to-person contact as well as through contact with surfaces. This risk makes it particularly dangerous to practice communal cosmetic sampling while the coronavirus persists.

In a recent interview with Allure, Cassandra M. Pierre, a physician specializing in infectious diseases and the medical director of public health programs at Boston Medical Center, says:

 "Primary transmission for COVID-19 is through respiratory droplets, but they are very susceptible to gravity," the expert explains. "You're talking, and droplets are emitted, and they fall on something that you're sampling. That can carry that infection particle to the next person who uses it."

Sephora has adopted a no-touch policy. Meaning that customers will no longer be able to pick up and touch testers or apply products to themselves. Instead, employees have been instructed to test products on their own skin and educate the customer from a safe distance. 

When we asked Jennifer Walton, about new ways to display cosmetics without risking transmission through communal testers, she said:

"As cosmetic retailers begin to deal with COVID, they are focusing on having testers visually there, but they can't be touched. So we are researching solutions for "touch-free testers." Even big brands are using sellotape or even saran wrap to prevent people from touching their cosmetics, and therefore the products look very shotty very quickly. There's a significant need for figuring out ways to lock down the displayed product, where the color is still visible."

Challenge #3: Less Makeup is Being Worn

Estée Lauder Companies' current chairman emeritus, Leonard Lauder, coined the term "lipstick index" after noticing that people were buying a lot of lipstick during the early economic downturn in the 2000s. He believed that while consumers may be hesitant to shell out money for a big-ticket luxury item like expensive shoes or a handbag, they were willing to invest $30 on a small indulgence, even during a recession.

However, amid a pandemic, when the best way to reduce the spread of a fatal virus is to cover the lower half of your face with a mask, that theory doesn't hold up. Lipstick sales have declined significantly in the last six months, as have makeup sales overall. However, that doesn't mean the beauty industry isn't finding a way to adapt or that consumers aren't buying products, including luxury items that cost hundreds of dollars.

"Humans groom themselves. It's just what we do," says Doreen Bloch, the CEO and founder of Poshly, a beauty data company. "People are still spending, people are still engaging in the category, but they're shifting their dollars around."

When the stay-at-home orders went into effect in March and April, makeup brands released social media campaigns and tutorials on how to get the perfect work from home look. But as the lockdown went on, seeing pets and kids running around and other imperfections became the new normal. Zoom's beautify feature was an unbeatable blow as all users needed to do was check the box named "Touch Up My Appearance."

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Challenge #4: Makeup Dollars Shifting to Skin Care

Although they are lower than pre-pandemic levels, skincare sales haven't suffered nearly as severely as makeup. Now that people have more time to evaluate their pores and skin texture, interest in the category remains healthy. Popular products right now include topical face masks, serums, and moisturizers, as well as devices.

In addition to skincare products, consumers are also investing in high dollar skincare devices. In a recent blog post, Vox shared:

"Gadgets, which are having a real moment, play into this impulse of wanting quick improvement. Skincare devices like the GloPro (a $199 microneedle tool used to puncture tiny holes in the skin to stimulate collagen production and increase product absorption) and NuFace (a $325 device that runs an electric current through the facial muscles to provide lift and toning) have both seen triple-digit sales increases since the pandemic started. The category overall, which had been experiencing declining sales in 2019, was up 8 percent the first six months of this year."

It's too soon to say how makeup brands without skincare lines will fare when coronavirus restrictions are lifted versus their counterparts with skincare products. 

How to Transform In-Store Experience

These challenges are significant and potentially long-lasting. Retailers and brands will need to evolve both the online and in-store experience to combat their impacts. 

As our in-house team and Jennifer Walton discussed the future of beauty retail better, it became apparent that we will see two significant solutions popping up in brick and mortar locations —  education and flexibility.

Solution #1: Education

Due to restrictions on employee and customer interactions, shoppers' inability to try out testers, or a shift in the types of products people are buying, adding enhanced product education opportunities is a crucial step that brands can take to stay top of mind for consumers. 

Without the luxury of having an expert makeup artist explain the nuances of each product or the ability to test it out on your skin, even the savviest makeup lovers will find it challenging to choose the right products. What do you think happens when a customer buys the wrong shade or doesn't like the smell of a product that is meant to sit on their face all day? They return it. 

According to Beauty Industry experts at Allure, "Many retailers resort to "damaging out" or destroying returned items due to contamination concerns, effectively sending thousands upon thousands of new and slightly-used products straight to the landfill."

By designing displays and other in-store brand experiences that offer more in-depth product information, brands and retailers can close the experience gap left by COVID-19 precautions and reduce the number of returns and unhappy buyers. We predict that brands will begin incorporating technology or concise messaging, accompanied by explicit imagery to inform shoppers about the products. These elements will be especially crucial for the increasingly popular skincare vertical in the beauty industry. 

"It's really, truly knowing your product, knowing the details of how the customer is going to use it, and maintaining the integrity of the packaging. Samples will need to be solidly secured without sacrificing the beauty of the packing. But there has to be a visualization they can compare and shop with that is accurate, the beauty industry is after all a visual industry”

says Jennifer Walton on designing displays that secure samples while also informing customers about the product.

Many consumers are still wary about visiting a spa, so they take to at-home treatments that mimic the results they would see from professional treatments. Since these products and equipment are novel purchases, shoppers want to learn about them before purchasing. 

A well-designed product display can offer answers to frequently asked questions, quickly demonstrate how it's used, and even provide testimonials and photos of results. 

Solution #2: Flexibility

Brands are working to ramp up their pre-packaged samples to provide the customer experience makeup lovers crave when they enter a beauty retailer. However, like "damaged out" products (returned items that cannot be resold), high volumes of plastic packaging from individually packaged samples is a sustainability concern. Because of this, we predict there will be evolutions in packaging materials. 

If brands plan to have testers accessible by shoppers vs. having a sales associate dole them out, they will need to design the sample displays to be flexible to changing packaging design. 

Cosmetic brands and beauty retailers are working to understand the best approach to providing a quality in-store customer experience. They are also hyperfocused on reducing the likelihood of spreading the coronavirus. There’s no doubt we will see continuous evolutions to how we purchase beauty products, and InStore Design Display is excited to be at the forefront of that innovation by collaborating with our clients to meet the industry and shoppers at the beauty counter.

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