Thursday, 16 April 2020

UK beauty retail could benefit from shuttered salons says analyst

The combination of hair and beauty salons being closed and many beauty retailers able to stay open in the lockdown could prove a big boon to the beauty sector during the period of enforced store closures.

Research firm GlobalData said that “sales opportunities for non-food retailers are scarce” at present, but with 59.8% of consumers globally using salons and spas for treatments, “the desire to replicate salon treatments at home will provide a much-needed revenue stream for beauty retailers”.

Lead Analyst Kate Ormrod said that ‘essential’ health & beauty items are being prioritized, "with more frivolous purchases abandoned by many. However, as the weeks go by and shoppers want to treat themselves and regain a sense of normality, we expect them to seek out at-home beauty and grooming alternatives now that their usual destinations for treatments are temporarily closed”.

This means a likely rise in demand both in stores and online for items such as hair dyes, hair removal creams and wax strips, self-tanners and nail products among others, as consumers strive to maintain their beauty regimes.

There has already been a noticeable increase in advertising on TV for products such as root touch-up hair colorants, while some online beauty retailers have also reported surging demand for hair removal products.

Ormrod added that the company’s research shows that of the 60% of global consumers who use salons and spas for beauty or grooming treatments, 18.9% attend appointments at least once a week, with usage higher among females. Additionally, attending salons and spas is particularly popular among younger consumers, with 74.1% of 25-34s receiving treatments. The under-44s are therefore more likely to carry out at-home treatments during lockdown.

Although, health & beauty retailers are “somewhat protected by the need for everyday essentials” and surging sales of items like hand wash and sanitiser, GlobalData still said sales will fall this year “owing to demand being decimated in categories such as fragrance”.

Just as many fashion retailers are seeing low demand for items seen as non-essential and frivolous, beauty brands and retailers are having to cope with some of their products being in low demand for similar reasons. Some fragrance and make-up products are suffering from this, despite their status as affordable treats. And products that replace salon services could take over as the most popular items due to their ‘treat-meets-necessity’ profile.

Ormrod added: “While not enough to offset the overall decline in health & beauty sales, beauty retailers have an opportunity to cater to consumers now finding themselves acting as their own beauticians, hairdressers, barbers and manicurists.”

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