The impacts of COVID-19, for most businesses, hit an all-time low. Just as both small and large businesses have started to rebound from the impacts of the global virus, a new global crisis has hit the industry: inflation. Causing rising costs across the full supply chain – from transporting goods to sourcing raw materials – brands are especially being hit hard by the long-lasting effects of the global pandemic. Brands are now having to increase RRP’s to keep up with the rising demand.
However, just how hard is the current crisis affecting the beauty industry…?
The beauty industry is setting a range of industries apart as they effortlessly deal with the declining demand from inflation-weary consumers. Consumers are still willing to invest in their personal appearance, and beauty companies have reported significant growth, and substantial quarterly sales gain whilst other industries fight the constant decline that predates the Covid pandemic. FOREO, leaders in beauty-tech and at-home salon-like treatments, have seen a significant increase in sales during the pandemic that aligns with the beauty industry’s standard of opposing economic strife.
“Like many beauty brands, we experienced significant growth in our online sales both through our own site and that of our partners during Covid. Whilst we have seen some return to normal patterns we are now seeing sales that are defying some of the inflation trends. Anecdotally we believe many consumers are now considering a beauty device investment as a cost reduction from their normal monthly treatment. The cost of a device can be equated to maybe two treatments, and as household budgets get tighter our devices can result in an overall reduction in expenditure without compromising on one’s self-care.” Anel Puzic, General Manager South-East Asia (excl. Thailand)
Historically, the beauty category has defied the laws of recession, showing a significant uplift in sales due to the “lipstick index”. The lipstick index is a phenomenon that exemplified the beauty industry from the dire state of the economy as it proved that it was immune to domestic and global economic woes. Studies have since been done on the psychology behind the lipstick effect proving that when applied to include all beauty products, and not just lipstick, “recession cues persistently increased women’s desire to purchase beauty products” including all beauty categories. Consumers tend to shift spending away from other products such as electronics or home appliances to beauty-enhancing products in the beauty category. This is inclusive of the skincare industry as the researchers theorised that the products being purchased by women were in any category that “enhanced their attractiveness to men”.
Most consumers can’t live without cosmetics as they feel negatively when not done up. In addition, during times of economic downturn, people seeking jobs tend to want to look presentable and exude confidence through aesthetics. However, during the Covid pandemic we saw a shift in the beauty categories that spiked showing skincare, body care and hair care leading sales with an increase of 6% in face categories. At home, self-care products, such as FOREO’s best selling smart LED masking device UFO 2, not only boomed in sales during the pandemic due to at-home self care but saw growth through organic social media content going viral on the popular growing platform Tiktok. Certain beauty categories are a shining beacon in an otherwise murky economic climate and have proved time-and-time again that it can outstand an economic crisis.
For many, consumers view beauty as a necessity where external perspectives that do not interact with the beauty category view the beauty industry as a luxury. Despite how some might view the industry it has seen significant growth over the past few years. Outside of cosmetics, trends are leaning towards skincare being the next financially viable investment. Beauty companies are investing in this category as it is seen to have generated 136 billion dollars in revenue in 2021. Skincare products are inexpensive ways to experience at home pampering in turn, bettering mental health and well-being. Rather than pampering through expensive spa days, vacations or salon skin treatments which can break the bank. FOREO are leaders in this industry and well ahead of their time, offering clinically backed devices that offer salon-like treatments not only in the comfort of your own home but at a fraction of the price. FOREO aren’t new to investing in this category, as some large beauty companies are now, but have stood strong for a decade with devices that are results driven and user-friendly.Whilst some companies are cautious about the state of the economy and the rising cost of goods, beauty looks to continue its history moving forward in the face of a recession. Where traditional cosmetic companies are now investing in the skincare category to keep up with moving trends, FOREO continues to sit ahead of the industry offering solutions for beauty consumers wishing to upkeep wellness and skin health in the face of inflation.
Current FOREO skincare devices are available to purchase on foreo.com and from Lazada PH or Sephora PH, including their other hero collections BEAR™, UFO™ 2, and LUNA™ 4.
To find out more about FOREO, the World’s Leading Medical Skin-Tech Brand, and to keep up to date with future growth and innovation visit www.foreo.com or follow @foreo_ph.