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Beauty Retailing - Canada - January 2021

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
COVID-19: market context
Economic and other assumptions
EXECUTIVE SUMMARY 
Top takeaways
Market overview
Impact of COVID-19 on beauty retailing
Figure 1: Short-, medium- and longer-term impact of COVID-19 on beauty retailing, September 2020
Opportunities and challenges
Position beauty as an uplifting act of self-care
Interest and confidence in online shopping will continue to grow
Sampling strategies can serve as an opportunity for increased engagement
Value-seeking shoppers will limit discretionary spend and trade down
THE MARKET – KEY TAKEAWAYS
Discretionary spending is measured in as a result of the economic slowdown
Canadians are prioritizing wellness
The face of the nation is aging
The Canadian population continues to become more diverse
MARKET FACTORS 
Impact of COVID-19 on beauty retailing
Figure 2: Short-, medium- and longer-term impact of COVID-19 on beauty retailing, September 2020
Lockdown
Re-emergence
Recovery
Discretionary spending is measured in as a result of the economic slowdown
Figure 3: Canada’s unemployment rate, January-December 2020
Figure 4: Canada’s retail sales, January-October 2020
Figure 5: Sephora Canada Instagram post, August 2020
Figure 6: Cheekbone Beauty Instagram post, September 2020
Figure 7: Estee Lauder Instagram post screenshot, April 2020
Buy Now Pay Later schemes make purchases more palatable
Figure 8: Paybright Instagram post, July 2020
Canadians are prioritizing wellness
Figure 9: Bite Beauty Instagram post, March 2020
The face of the nation is aging
Figure 10: Population aged 0-14 and 65+, 1995-2035*
Figure 11: BPC product repertoire, seniors vs overall, September 2020
Figure 12: MAYE MUSK for COVERGIRL, November 2017
Figure 13: Get your glow back with Age Perfect Golden Age | L'Oreal Paris NZ, August 2020
Figure 14: Narsissist Instagram post, October 2020
Figure 15: Grandma knows best when it comes to makeup advice, December 2018
The Canadian population continues to become more diverse
Figure 16: Visible minority population in Canada, 1981-2036*
Figure 17: Fenty Beauty Instagram post, January 2021
Figure 18: Sephora Instagram post, January 2021
Figure 19: Sephora Canada Instagram post, January 2021
MARKET OPPORTUNITIES 
Non-traditional outlets are gaining steam
Figure 20: Those who have tried a new shopping service for BPC products as a result of COVID-19, by age, September 2020
Figure 21: L’Oréal Instagram post, December 2020
Figure 22: The Sims Instagram post, June 2020
Figure 23: Nintendo Instagram post, January 2021
Figure 24: Urban Decay Game of Thrones Vault Set (US), May 2019
Figure 25: Elmwood Spa Instagram post, January 2021
COMPANIES AND BRANDS – KEY TAKEAWAYS 
Digital tools can bridge the gap between in-person and online shopping
Spotlight on Cover FX
COMPETITIVE STRATEGIES
Digital tools can bridge the gap between in-person and online shopping
Figure 26: Swan Beauty LLC Instagram post, November 2020
Figure 27: Lush Cosmetics Instagram post, April 2020
Figure 28: HiMirror Mini - See your beauty needs clearly, September 2018
Spotlight on Cover FX
Personalization
Figure 29: Cover FX Custom Cover Drops (Canada), June 2019
Expansion into skincare
Figure 30: Cover FX Instagram post, January 2021
Figure 31: Cover FX Instagram post, January 2021
Virtual Try-On
Figure 32: ‘I have used/would like to use tools that allow you to virtual test products’ (% agree), men vs women, September 2020
Figure 33: Cover FX Instagram post screenshot, August 2020
THE CONSUMER – KEY TAKEAWAYS 
Hygiene basics top Canadian BPC shopping lists
The pandemic has caused many Canadians to make adjustments to their typical BPC routines
Canadians are increasing their online shopping frequency
Sampling will remain an important element to drive sales
PRODUCTS USED IN THE PAST SIX MONTHS
Canadians are using a wide assortment of beauty and personal care products
Figure 34: Products used in the past six months, September 2020 vs September 2019
Not surprisingly, usage skews heavily towards women
Figure 35: Give and Take | Old Spice, February 2019
Figure 36: Products used in the past six months, men vs women, September 2020
Beauty has been deprioritized as a result of the pandemic
Figure 37: Women who have worn makeup worn in the past six months, September 2020 vs September 2019
Younger Canadians are more engaged in the BPC market
Figure 38: Products used in the past six months, 18-44s vs over-45s, September 2020
Asians have elevated BPC product usage
Figure 39: Products used in the past six months, Chinese Canadians and South Asians* vs overall, September 2020
Figure 40: Realistic Skincare Commercial, January 2019
Figure 41: Vaishali says beauty is strength, February 2017
Shoppers of all income levels are able to find appropriate products to fit their budgets
Figure 42: Sun protection used in the past six months, by income, September 2020
PRODUCTS PURCHASED IN THE PAST 12 MONTHS
Hygiene basics top Canadian BPC shopping lists
Figure 43: Products purchased in the past 12 months, September 2020
Women are far more invested in BPC product purchases
Figure 44: Products purchased in the past 12 months, men vs women, September 2020
Younger Canadians are focusing on discretionary purchases
Figure 45: Products purchased in the past 12 months, 18-44s vs 45+, September 2020
PURCHASE CHANNELS USED IN THE PAST 12 MONTHS FOR BEAUTY PRODUCTS
Canadians are increasing their online shopping frequency
Figure 46: Share of online vs in-store shopping, 2020 vs 2018, September 2020 and April 2018
Figure 47: Frequency of online shopping, 2020 vs 2018, September 2020 and April 2018
Most online shoppers also visit the retailer in person 
Figure 48: Retailers used to purchase beauty and personal care products in the past 12 months (net in store/online), September 2020
Figure 49: Retailers used to purchase beauty and personal care products in the past 12 months, online vs in store, September 2020
Younger consumers are more likely to be shopping online
Figure 50: Online retailers used to purchase beauty and personal care products in the past 12 months, 18-44 vs 45+, September 2020
Figure 51: Those buying a BPC product online that would usually be purchased in person as a result of the COVID-19 pandemic, by age, September 2020
Figure 52: Lush Cosmetics Instagram post, April 2020
Women are seeking out more specialized beauty retailers
Figure 53: Beauty and personal care products purchased at specific retailers in the past 12 months, men vs women, September 2020
Regional differences exist in online shopping behaviours
Figure 54: Any beauty and personal care products purchased online in the past 12 months, by region, September 2020
COVID-19 RELATED BEAUTY ROUTINE CHANGES
The pandemic has caused many Canadians to make adjustments to their typical BPC routines
Figure 55: Changes made to beauty routine as a result of the COVID-19 pandemic, September 2020
As women’s beauty routines are more ‘situation-dependent’, they have faced greater disruption
Figure 56: Changes made to beauty routine as a result of the COVID-19 pandemic, men vs women, September 2020
Figure 57: Clairol Color Instagram post, May 2020
Figure 58: Shoppers Beauty Instagram post, April 2020
Figure 59: DHC eyelash tonic conditioner (US), December 2020
Younger shoppers have altered their routines most, but have also adapted more easily to online shopping
Figure 60: Changes made to beauty routine as a result of the COVID-19 pandemic, by age, September 2020
Parents are turning online to find BPC products
Figure 61: Honest Instagram post, November 2020
Figure 62: COVID-19 pandemic-related beauty routine changes, parents vs non-parents, September 2020
BEAUTY PRODUCT SHOPPING BEHAVIOURS
Canadians rely on routine for shopping, but are willing to experiment
Figure 63: Frequency of BPC shopping behaviours, September 2020
Figure 64: Habitual BPC shopping behaviour frequency (% always or most of the time), by age, September 2020
Figure 65: Online BPC shopping behaviour frequency (% always or most of the time), by age, September 2020
Figure 66: Online BPC shopping behaviour frequency (% always or most of the time), Asians vs overall, September 2020
Sampling will remain an important element to drive sales
Figure 67: ‘I’m no longer interested in the option to sample products in stores’ (% agree), by those comfortable/uncomfortable receiving beauty treatments as a result of COVID-19, September 2020
Figure 68: Marie Claire Edit Instagram post, August 2020
Figure 69: Product sample-related BPC shopping behaviour (% always or most of the time), by age, September 2020
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Mintel Trend Drivers
Abbreviations

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