Beauty business puts on brave AR face in hands-off Covid times

Dry, data-driven reports from financial institutions rarely stray into beauty column territory for their language but last week in analysing card spending, Bank of Ireland’s Christian Pierce noted, “May saw consumers preening and prepping”. Card spend in barbers and hairdressers was way up – not surprising as they had been closed for so long and pent-up demand was visible.

And while this service side of the beauty industry faced challenges reopening after lockdown, they pale into comparison with those faced by the industry globally in reworking how high-end beauty products and make-up can be sold when healthy sales depend so much on face-to-face interaction, product sampling and touch.

In May 2020, just months after Covid-19 hit, market researcher McKinsey noted that sales of prestige beauty products and make-up had already declined a respective 55 per cent and 75 per cent relative to 2019 figures. For women working from home and with no social engagements, there wasn’t much point in maintaining, or bothering with the faff, perhaps of a pre-Covid beauty routine.

There was one business upside, however. Throughout the past year, multiple reports – it’s a highly researched consumer sector, not least because it is such a valuable one (McKinsey estimated it was worth $500bn globally in 2019) – found that sales of skincare products such as lotions, moisturisers and the like rose as people stuck at home upped “self-care” routines.

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But apart from demand falling for obvious lockdown reasons, there was also the closure of brick-and-mortar outlets. Glossy ad campaigns build brands but the real marketing, the sort that gets tills ringing, happens at the counter. McKinsey said in most major markets, in-store shopping made up about 85 per cent of beauty product purchases prior to the pandemic. Even consumers who happily shop online, such as US millennials and Gen Zers (born 1980-1996) made about 60 per cent of their beauty purchases in-store.

Non-essential retail opened in Ireland earlier this month but it’s not beauty business as usual. Covid-19 restrictions have changed prestige make-up counters with many attempting an innovative in-person/digital hybrid model, with tightly controlled product sampling.

Beauty is the ultimate buy-before-you-try sector, sold as an “experience” rather than a simple purchase.

While pre-Covid it wasn’t unusual to see young women making themselves up fully for a night out while browsing several beauty counters, even lipsticks could be tried – the same tube by countless germy lips – that’s gone now. All premium brands, such as Estée Lauder, Charlotte Tilbury, Emporio Armani, Yves Saint Laurent and Lancôme have long staffed their counters with experienced make-up professionals who, in a touch-focused sales strategy that seems worlds away now, could pre-Covid, give demonstrations and in-store makeovers. Indeed UK retail consultancy Stellar found, in small-sample research, 85 per cent of women would be “encouraged to buy a product” after an in-person demonstration, showing the challenges this sector faces in moving online.

While a vast range of other consumer sectors – from clothing to household goods – have over the past decade successfully persuaded consumers to buy online, ironing out earlier obstacles with such comforts as accurate size guides and easy return policies, consumer preference to touch, try and buy meant the make-up industry trailed when it came to online sales. There’s also the problem that once opened, there’s rarely product returns, not generally allowed for health and safety reasons. I have two lockdown online-purchased foundations, one that makes me look like a Victorian consumptive, the other a gingerbread man, both now, expensively, destined for the bin.

That said, as with other sectors which greatly boosted their online presence in response to lockdowns, beauty did that too and not just a simple online offering but one that for several premium brands involved sophisticated interactive augmented reality.

L’Oreal, the global conglomerate whose vast portfolio ranges from Lancôme and Giorgio Armani at the luxe beauty hall end to Maybelline and Garnier in pharmacies and supermarkets, had already bought Modiface in 2018, a company that creates augmented reality (AR) beauty apps, offering vivid digital options which allow customers to see what a product might look like on them. It has now extended that technology into stores where limited product testing is also available.

MAC, too, is bringing its AR online offering into stores including Brown Thomas with its Virtual Try On, where consumers can upload their photos and “try on” more than 800 items. Products can be tested under strict controls and virtual consultations with a MAC make-up artist pre-booked.

And while these digital solutions, where shoppers still have real world interaction with an assistant, show a high level of sophistication and investment, it’s hard to measure how well they will fill the gap until Covid-19 restrictions are fully lifted. They should at least go some way to encourage buyers back to the counters.

While other sectors have seen lockdown shoppers pivot strongly online where some may stay – with all the accompanying death-of-the-high-street predictions – consumer preference in beauty suggests digital is not, yet, a satisfactory substitute for the try and buy sensory experience. Chain store Next, which sells more than 200 beauty brands on its website, last year, in the depth of the pandemic announced it had taken over several vacant Debenhams stores in the UK to roll out its Beauty Hall concept. And the former House of Fraser premises in Dundrum is to be taken over by Brown Thomas who will doubtless seek to replicate the vast destination beauty floor that was a key attraction in the south Dublin mall.

Many a dull economic report has been jazzed up with reference to cosmetic giant Leonard Lauder’s “lipstick index” , though his theory that even in a recession women will still find the money for the small luxury of a pricey lipstick looks redundant now – face masks have seen to that.