Globally, the COVID-19 pandemic has wreaked havoc in many industries, and the beauty and cosmetics industry is not an exception. Although the beauty industry fared better than other segments, there is a likelihood that 2021 will become one of the most problematic years it has ever faced. The outbreak of COVID-19 and the subsequent social distances and lockdown measures imposed by governments have significantly impacted the industry.
Some individuals could have predicted that personal care and beauty would remain a priority even if the entire population had to stay at home. However, this prediction may never manifest because the pandemic has shaken the beauty and cosmetic industry. COVID-19 has hampered the industry’s export and import aspect, and the consumption of beauty products has dramatically declined.
The following are the top five challenges facing the beauty and cosmetics industry in 2021:
1. Reduced Supplies
Like the chemical industry, manufacturers of beauty products encounter problems when supplying their products’ components. They experience difficulties in keeping abreast of their production and export of goods. Additionally, large retail chains have categorized beauty products as non-essential items, causing supply freezes in various countries. As a result, cosmetic manufacturers have started to invest in local distribution channels to keep their operations afloat.
2. Stores Closure
The closing of cosmetic shops and salons is another challenge affecting the beauty and cosmetics industry. The coronavirus pandemic resulted in sedentary lifestyles as it has led to the imposition of measures that restricted movements and social gatherings. Consequently, the number of shoppers visiting cosmetic stores and salons has reduced, resulting in temporal or total beauty shops’ closure. This issue has rendered many hairstylists and make-up artists jobless and forced small beauty companies out of business. Additionally, many manufacturers have called off events and launch campaigns and canceled major beauty trade shows.
Besides, many consumers state that they aspire to reduce their beauty and personal care budget by 50% until the global economy stabilizes and has shifted their interest to homemade beauty products. As a result, the industry’s revenue has declined due to reduced sales.
The beauty and cosmetics industry produces products with a mixture of several chemical elements. Therefore, interest in organic, sustainable, and environmentally friendly personal care products will continue developing because the public is still worried about beauty products’ safety.
Consumers have become aware of the level of skin care they need and the adverse effects harsh chemicals used in beauty products can have on them. This awareness, combined with the increased environmental consciousness, implies that cosmetic brands and manufacturers will have to adopt more sustainable production processes and components to win buyers and thrive in the industry.
4. Distribution Channels
Before the COVID-19 outbreak, physical stores recorded almost 85% of personal care and beauty product purchases. These outlets enabled consumers to compare different products to avoid relying on one brand. However, the pandemic resulted in the closure of about 30% of the beauty and cosmetic industry because premium cosmetic outlets closed. Some of these stores may never get to business again, and new openings might delay in 2021. Therefore, the industry’s distributors will continue to encounter difficulties when positioning their products in the market throughout 2021.
5. Sanitary Control
The COVID-19 pandemic has forced the beauty and cosmetic industry to incur extra costs to implement safety measures once their physical stores resume operations. Besides, beauty product manufacturers have to redouble their monitoring efforts in the supply chain throughout 2021.
While beauty products directly affect the consumers’ health, they require high-quality control levels during the production, storage, and distribution phases. Therefore, the manufacturers, suppliers, and distributors will have to get ready for long-life tighter sanitary scrutiny from local authorities and buyers who expect companies to assist in curtailing the coronavirus’s spread.
Considering the increased remote working, social distancing, and wearing of masks, people have reduced interest in wearing make-ups and fragrances, leading to reduced cosmetic purchases. Besides, most will continue to wear masks when customers return to work, slowing down the beauty industry’s recovery. However, the outlined challenges create an opportunity for the industry to find new capital sources and improve product quality. Addressing these challenges will help the segment survive the raging effects the COVID-19 pandemic has had on the global economy.