Over the past few years, the beauty industry has trended towards niche, luxury brands fronted by influencers or celebrities. But thanks to their affordability and availability at essential retailers during the pandemic, generic beauty products — like the kind available at the drug store or supermarket — are making a comeback.
Luxury beauty is struggling
As shipping became unreliable and specialty make-up stores like Ulta and Sephora shuttered during quarantine, prestige make-up sales fell 36% in the second quarter, significantly further than cosmetics sales at large’s 22% dip. Even as make-up stores reopened, brands sold there have continued to struggle with samples shelved for safety reasons and shoppers are still avoiding nonessential shopping trips. LVMH, owner of Sephora favorites like Fenty Beauty, Kat Von Dee’s vegan brand KVD and Marc Jacobs Beauty reported that perfumes and cosmetics sales dipped 29% in the first half of 2020.
Drug store beauty shows resilience
Even though people are buying less make-up, brands that line the shelves of drug and grocery stores are holding up just fine. The respective top beauty brands of Target and Walgreens — e.l.f and L’Oreal — have both seen stock rise since the pandemic.
|
Rank (# of unique products sold) |
Target |
Walgreens |
|
1 |
E.l.f. |
L’Oreal |
|
2 |
L'Oreal |
Maybelline |
|
3 |
Burt's Bees |
Cover Girl |
|
4 |
Sonia Kashuk |
Neutrogena |
|
5 |
Dove Beauty |
Revlon |
|
7 |
SheaMoisture |
Soap & Glory |
|
8 |
Maybelline |
No7 |
|
9 |
Pantene |
Wet n Wild |
|
10 |
Pacifica |
NYX |
|
11 |
NYX |
Burt’s Bees |
|
12 |
Olay |
SheaMoisture |
|
13 |
Yes To |
Aveeno |
|
14 |
Aveeno |
Rimell |
|
15 |
Covergirl |
Olay |
In July, L’Oreal’s share price hit a multi-year high, up 7% from the beginning of the year. It’s since fallen to a 4.5% year-to-date increase, and second quarter profits suffered along with the general make-up industry. But according to Yahoo Finance, they’ve avoided “any major profit erosion” from the pandemic.
In February of 2019, E.l.f closed 22 stores to focus on e-commerce and wholesale with Target and Ulta, according to Business of Fashion. The strategy paid off. With help from collabs with Chipotle and Alicia Keys, E.l.f saw shares spike 8% in early August after beating their second quarter forecasts. Both brands have steadily been gaining buzz online. L’Oreal has racked up 40,000 new followers on Facebook since March while E.l.f has added 10,000.
Drug and grocery stores could be the new beauty destination
Even before the pandemic, chains like Target, CVS and Walgreens were carving out space in the beauty, expanding their inventories and glamming up their beauty aisles, reports Business of Fashion. If the pandemic continues to compel people to buy their make-up where they get their food or medicine, instead of making separate trips, these upgrades could have serious returns. Whole Foods has also become a player in beauty since quarantine. The Amazon-owned grocer saw categories like skincare, face masks, bath accessories, hair color and nail polish “boom” since March, according to Business of Fashion, thanks to the new “one-stop shop mindset.”
High-end brands want in on the action
“Drug store make up” used to be an insult. Cosmetics brands took pride on exclusive availability (see: Kylie Jenner’s Ulta deal). But since beauty sales picked up at drug and grocery stores, as well as Amazon, brands are swallowing their pride. Skincare brand Pixi Beauty, known for their “Glow Tonic,” recently put their products on the shelves of Texas supermarket chain H-E-B, Morning Brew reports, suggesting interest around similar deals in both the beauty and the grocery industries.
What’s next? Glossier in Wegmans? Fenty Beauty in Rite-Aid? Goop in Kroger? Until shoppers are happily spending hours putting on a full beat in Sephora again, these aren’t such far-out fantasies.
