The coronavirus pandemic is to e-commerce sales what the bullet train was to rail travel — a transformational accelerator of a wide-spread behavior.
During the crisis, with all but nonessential brick-and-mortar stores closed, consumers had no choice but to buy online — some for the first time ever. But as stores start the laborious process of reopening, one thing is clear: For many people, the migration to e-commerce will be permanent — and the implications for selling beauty are significant.
“In the last three to four months, we’ve seen changes that we would have expected over the last three to four years,” says Oliver Wright, global lead of Accenture’s Consumer Goods practice. “Before COVID-19, about 20 to 30 percent of the population in most countries were hesitant to make purchases online. This group has been broken through, and as a result, we’re seeing a vast majority of people says, ‘we’re not going back to what we did before.’”
According to a survey by WSL Strategic Retail, 44 percent of the total U.S. population has made an online order since the crisis began. Drilling down to beauty, 36 percent bought beauty online for the first time ever, and 73 percent of that cohort said they will continue to order online after the crisis.
Those numbers are borne out by the brands. Lubomira Rochet, executive vice president and chief digital officer of L’Oréal, says that in late May alone, e-commerce sales grew 143 percent in the U.S., 300 percent in Latin America, 400 percent in EMEA. Estée Lauder, too, saw triple-digit growth.
“It was a massive adoption of digital formats, especially of e-commerce, even for older demographics,” Rochet says. “There is a saying, ‘If we stick to something for more than 28 days, it becomes a habit.’ A big part of what happened during COVID-19 will stick, because all different demographics got used to shopping online and experienced the conveniences of the channel.”
“Once you’ve gotten used to something, you look for other occasions to do it,” agrees Wright. “There’s now a rhythm in e-commerce we haven’t seen before.”
While necessity may have been the catalyst during the crisis, that’s not what will keep consumers coming back. “Initially it was about price. Then convenience. Now, it is emerging as an immersive, relationship-building, empathy-driving space,” says Wendy Liebmann, chief executive officer of WSL Strategic Retail. “As a society, we’re craving people we trust, empathy, knowledge and the ability to get things done. We’ve learned that we can have a pretty intimate relationship virtually, with your coworker or a hair colorist who gives you advice.”
Dennis McEniry, president of online at the Estée Lauder Cos., says that a key trend to emerge from the crisis has been the adoption of video. People are watching and learning and participating, and it’s not slowing down. “The time spent on site has taken off in the last three months and is sustaining,” he says. “Sales on our brand-dot-coms are experiencing triple-digit growth, and a good portion of that is being driven by video and live-streaming.”
Tips, how-to’s, master classes, consultations with experts — all are generating high levels of both engagement and conversion. Live-streaming, in particular, has taken off in the U.S., with the educational and entertainment aspects resonating. “Live-streaming has been driving a lot of the growth in China,” says McEnery, “and it has really come through to the U.S.” At Lauder, brands were able to pivot quickly in the early days of the pandemic; within a week-and-a-half of the quarantine, brands had started streaming out live content in conjunction with tools like virtual try-on.
“Consumers spend up to nine minutes with that, but it’s a first step,” Rochet says. “Now, the second step is to go from try-on to personalized recommendations. We want to get to the virtual circle of coaching, which we saw very strongly in COVID-19 in categories like nutrition, sleep, well-being, mental health.”
Rochet sees such “coaching” becoming prevalent in beauty, as well, a dynamic that will give rise to more personalized subscription-based shopping models. “Say with skin care, you have an aesthetician as your coach. They are asking, ‘how is your skin today? What do we need to do based on the day you’re having or the weather right now or other skin considerations?’” she says. “You subscribe to a program and get a box that has been personalized just for you every week or two. We see that really happening. The world is getting smarter.”
Many experts believe that the increase in live-streaming will also accelerate the development of commerce on social media channels, much like it has done in China. In mid-May, Facebook announced the launch of Facebook Shops, making it easier for brands to sell on Facebook and Instagram. “Social commerce will disrupt e-commerce as e-commerce disrupted brick-and-mortar,” Rochet says. “It is massive in China, particularly because of live-streaming. It has accelerated super fast — already it is more than 120 million RMBTK [about $17 million at current exchange]. The acceleration of live-streaming will trigger an acceleration of social commerce. Consumers and influencers will be able to sell online on behalf of our brands. It is a bit like QVC on steroids.”
Rochet expects that social commerce will become a “sizable” business in markets other than China in the next 12 to 18 months. McEniry, too, has “big expectations,” noting that Lauder expects Facebook will be bigger than Instagram, because of the brand engagement he sees on the platform.
Still, it will be but one of many — including a brand’s own dot-com site, retailer sites across all channels, beauty pure-plays like Lookfantastic.com and huge platforms like Amazon and Alibaba. “We are agnostic as to where the consumer wants to buy,” McEnery says. “The focus is on the consumer experience, making the site experience as good as it can be and as convenient as possible.”
But for all of the insights and advances, there are still questions. Consumers have shifted from conspicuous to conscious consumption during the crisis. According to Accenture, about half are looking to shop more health-consciously and make more sustainable choices. “In the data, there are increasing questions about not how am I buying, but what,” Wright says. “As people look online, they will look for more evidence as to whether people are really driving that and the environmental impact.”
And what of brick-and-mortar, a sector of retail that has been decimated by the crisis? While the process of reopening has begun, no one expects the sector to resemble pre-pandemic proportions. Wright envisions physical stores serving the role of education and entertainment describing what he calls a new blended model.
Liebmann says companies shouldn’t even make the distinction anymore. “As brands and retailers, we have done a tremendous disservice [to consumer] by thinking it is one or the other,” she says. “You have to step back and think about the entire experience. What does the shopper want and how can I provide that through all of the tools at my disposal? How do you create a more branded and holistic retail experience in your own voice?” she continues.
There’s also the logistical aspect to continue. As McEnery points out, expectations around convenience abound. “Delivery, curbside pickup, contactless payment — all of that we are building into our capabilities,” he says.
But most of all, it’s about the shopper. “If people are interested in buying, you better let them buy as fast as they can. No walls, no barriers, virtual or physical,” Liebmann says. “You have to ask, what are the tools we have and how do we need to push them further to offer this interconnected world of beauty?”