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Evolving eCommerce: Beauty Retailing: Incl Impact of COVID-19 - US - November 2020
Overview
 
What you need to know
The shift to consumers’ beauty routines caused by the pandemic has created challenges for the total beauty category; however, the online space presents opportunities for growth. Enhancements to the online shopping experience such as the use of virtual tools and social commerce, along with increased usage of video content, will keep shoppers engaged in the category. As consumers continue to adjust to the next normal, beauty brands and retailers will look to bring more of the in-store experience online. Mintel anticipates growth online to continue, although it won’t offset the declines in total beauty.

Key issues covered in this Report
●	The impact of COVID-19 on consumer behavior and the online beauty market
●	How the online beauty category is better positioned compared to the last recession
●	The increased need for reassurance and flexibility in shopping online
●	The role of social media in online beauty shopping moving forward

Definition
The focus of this Report is on the role online plays within the beauty and personal care categories, including where and how consumers access online beauty resources, how and why they incorporate online activity into their beauty purchase journey and how digital will continue to evolve within the beauty industry.

For the purposes of this Report, Mintel’s definition of the beauty and personal care category includes the following: color cosmetics; facial skincare; body care including soap, bath and shower products; haircare; nail care; women’s and men’s fragrances; skin protection products; beauty appliances (hair and skin) and accessories (hair and makeup). Medicated skincare and footcare are not included in this Report, rather covered in Mintel’s specific Reports on these topics.

This Report builds on the analysis presented in Mintel’s Beauty and the Online Landscape – US, December 2019 and Beauty Retailing – US, October 2020, 2019 and September 2018, 2017. For more detailed information about any of the aforementioned beauty categories, please refer to specific Report titles in the Beauty and Personal Care library.

COVID-19: Market context
The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April, remaining in place through May and in some cases June. During this time, referred to as lockdown, nonessential businesses and school districts across the nation closed or shifted to remote operations. This included beauty retailers, forcing them to pivot online and giving many consumers limited options to shop the category other than online. The lockdown also disrupted consumers’ lifestyles and beauty routines, resulting in changes to the types of beauty products used, as well purchase frequency.

During re-emergence, all 50 states have relaxed stay-at-home orders and allowed businesses to operate with varying levels of social distancing measures in place. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans. Even as stores reopen, some consumers remain hesitant to shop in stores, resulting in increasing comfort with shopping for beauty online. Further, as consumers grow accustomed to using virtual features and tools for other aspects of their lives, such as live chatting and virtual events, beauty retailers are adopting such tools to enhance the online experience.

Mintel anticipates the US will remain in a state of flux through 2021, until a vaccine is available.

Economic and other assumptions
The analysis provided reflects an estimated range of the market’s prospects in light of the upheaval caused by the COVID-19 crisis. Mintel’s economic assumptions are based on CBO 10-year economic projections released on July 2, 2020. The CBO expects US GDP to fall by 5.8% in 2020 and recover to 4.0% growth in 2021.Unemployment estimates from the CBO indicate a 10.6% rate for 2020, declining to 8.4% for 2021, which is slightly more positive than initial expectations (11.5% in 2020 and 9.3% in 2021), though expectations are that it will remain above 5% through 2025.

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