How economies recover after covid | The beauty industry is becoming more digital.

Lockdowns and isolation did little to alter the basic human desire to feel and look good. They did, however, decisively switch the channels through which humans satisfied that desire.
Perhaps as much as any consumer business, the COVID-19 lockdowns have changed how beauty marketers promote and sell their products. Formerly a transaction mediated face-to-face with beauty advisers and skincare consultants, online has taken the business by storm.

E-commerce market share climbed by more than 50% over the course of the year. The winds of change were blowing through the industry even before the lockdowns. Demonstrations on YouTube and various social media platforms had begun to attract steadily larger audiences. Over the course of the lockdowns the audiences mushroomed. Before YouTube, key opinion leaders—or celebrity endorsers, as they were known in an earlier time—addressed an undifferentiated mass of fans through a magazine page or a TV screen. The YouTube demonstrations enabled them to engage a mushrooming audience idled at home virtually one-on-one, in chat rooms on their devices.

Social media extended the function of key opinion leaders beyond celebrities to an entirely new class of “influencers”.

A beauty adviser, before COVID-19 confined to a single shift at a single counter at a single store, could now have 24/7 global reach. Technology, abetted again by the lockdowns, has also created space for the enterprising and well-placed influencer to launch a global franchise with little capital and less time, expanding the entire category.
The pop singer Rihanna
created and sponsors a line of cosmetics that is arguably the first to offer shades that can complement the entire range of human skin color.
Kylie Jenner
has developed a brand that leverages her vast adolescent following and puts her in a position to beat out Silicon Valley’s aspirants to become the first Gen Z billionaire.
The necessity of defending their franchises on the digital front opened by this influencer disruption was the mother of invention for the established beauty industry. The industry embraced the most sophisticated technology to duplicate and even enhance the hightouch experience of in-store sampling and in-person recommendation.

The leading brands have developed try-on apps and have deployed artificial intelligence to generate personalized recommendations— and to put together highly customized, high-margin product offerings. Estée Lauder, to cite a noteworthy example, offers “beauty technology” on 90% of its brand websites. In the lockdown era, livestreamed events took the place of in-store promotions, with stunning effect for beleaguered retailers as well as for brands.

In China, which took up livestreaming first, one large Hong Kong retailer reported that a one-hour livestream garnered 50,000 views and topped the one-day in-store sales record. Retailers also report that virtual events give them the same added advantage gained by the brands online: detailed information on the preferences of every customer that engages through a direct and precisely targeted communications channel.

The economic benefits of taking beauty online complement the marketing rationale. Margins are better for the retailer, who can forgo the expense of maintaining a physical location, and for the brands selling customized product to the end consumer. The brands can tap entirely new markets and market segments. They can introduce their products to the emerging markets, where profitable retail locations are scarce and e-commerce usage is high.

Apps can deliver technical presentations to medical professionals in their offices closer to home. L’Oréal, for example, seeking to consolidate a lucrative and highly defensible foothold in skincare, reached 250,000 dermatologists last year. In all, the course of the beauty industry over the past year offers investors a glimpse of the possibilities on offer in the post COVID-19 economy. By deploying and continuously upgrading technology to replace the human touch right through the pandemic, the most personal, one-to-one, and hands-on of businesses bridged the gap between individual and customized on one side and mass on the other and illuminated possibilities across the entire consumer universe.