Week in review Facebook launches rival to Zoom, Google combats virus profiteers, nostalgia and comedy rule on TV. PLUS an in-depth look at ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Week in review Facebook launches rival to Zoom, Google combats virus profiteers, nostalgia and comedy rule on TV. PLUS an in-depth look at COVID-19’s impact on the Beauty sector.
Contents
3 Facebook launches
Messenger Rooms
5 Google tightens ad
identity rules
6 Nostalgia and comedy
rule on TV
7 Deep Dive: Beauty
8 Business
13 Consumer
18 Brand
2
Facebook targets Zoom with new
group video chat feature
Click to read
Facebook launches
video-chat to rival
Zoom while WhatsApp’s
encryption wins on the
security front
WhatsApp’s killer new update just
arrived: but here’s your problem
The coronavirus-induced lockdown Click to read
across the world has seen usage of video
chat platforms skyrocket. As Zoom’s daily
meeting participants rise to 300m, up from
only 10m in December, Facebook has rushed
to develop rival services.
The launch of Messenger Rooms across
the Facebook and Messenger apps was
announced last week. The feature allows
public and private video calls for up to 50
people for free, with no time limit. Enabling
consumers to jump between chats to visit
different groups of friends, or use augmented
reality filters, creates a product that Facebook
say ‘feels more social, less corporate than
what’s currently available’.
3
Facebook claim to have learned from
the security issues that have surrounded
Zoom in recent months, in particular Zoom-
bombing, where uninvited guests intrude on
a Zoom call. Facebook users who create a
chat can also select participants, eject people
if needed or lock the room. The company
won’t watch or listen to calls, and there is
no ability for users to record video chats,
a spokesperson for the platform said.
While it will come as a relief to consumers
that their calls are more protected from
unwanted participants, Messenger Room
calls are not end-to-end encrypted, so people
are still reliant only on Facebook’s assurance
that their data will remain safe. For those
seeking added security, WhatsApp calls
offer end-to-end encryption and so present
a viable alternative – albeit for fewer
participants. Previously allowing calls for
up to four people, Facebook announced
last week that this will double to eight for
WhatsApp. Should participant numbers
continue increasing, WhatsApp stands
to be a game-changer in a market where the
security of our communications has never
been more critical.
4
Google will introduce
new measures to combat Google has removed 'millions of ads in
the past week' relating to coronavirus
misinformation and Click to read
profiteering
The early stages of the COVID-19
pandemic saw a number of companies
attempting to profit from the crisis, resulting
in a spike of online advertising for medical
supplies – potentially redirecting critical
supplies from health organizations into
private hands. Google’s initial response
focused on banning advertising for certain
product categories, with mixed results.
In an attempt to limit the spread of
misinformation, curb spam and price
gouging and prevent companies profiting All Google advertisers will soon have
from the pandemic, Google has confirmed to verify their identities
that all advertisers will soon have to verify Click to read
their identities. This change is an extension
of rules applied to political advertising in 2018.
It means that all advertisers who want to be
active on Google platforms, including search
and YouTube, will have to first prove their
identity by submitting personal identification,
business incorporation documents and any
other form of identification confirming the
country in which they are located. Users will
be able to access the name of the advertiser
and country of origin when they click on
‘Why this ad?’ button. The programme
will be initiated in the US before being
rolled out globally.
Users will be able to see the name and
country of all advertisers
Click to read
5
Nostalgia and comedy:
the TV order of the day
The effects of the pandemic have been
varied and sometimes surprising, but none tell
us more about human nature than the change
in TV viewing habits. Thinkbox, the UK’s
leading TV marketing body, released a report
comparing year-on-year viewing figures from
the Broadcasters Audience Research Board
(BARB) and a series of video diaries from
households across the UK. The headline
figure is the 37% growth in TV consumption
versus last year, confirming the hefty increase
expected by most experts.
Comedy, nostalgia and family viewing
The findings reveal a lockdown-induced are up as lockdown changes TV habits
increase in viewership of comedy shows Click to read
by over 40%. Laugh-out-loud series like the
Netflix hit Friday Night Dinner highlight a
consumer need for levity during these dark
and uncertain times. TV figures also show
the extent to which COVID19 has
strengthened family units with families
and couples engaging in what is called
‘compromise viewing’. With live events on
hold and production in limbo, it will come as
a relief to TV networks that consumers want
to relive their favourite shows of yesteryear or
share the ‘good old days’ with younger viewers
by tuning into re-runs of Only Fools and
Horses (up 20%) and Last of the Summer
Wine (up 30%).
RTL rushes out programmatic
Despite the boom in viewing, TV ad forecasts
remain pessimistic, but this challenge has also TV-buying platform
brought innovation. Rising viewership has
Click to read
seeped into on-demand platforms like All4
and ITVHub. European TV giant RTL has
rushed to announce their new programmatic
TV-buying platform, VMP Connect, which
will allow advertisers to access premium
on-demand inventory via most major DSPs.
Source: GroupM data, April 2020
TV viewing has increased consistently
across many markets during lockdown,
but evidence from China suggests
viewing will stablise as measures
are lifted.
6
Category
Deep Dive:
Beauty
This week, the latest data and intelligence
on COVID-19 and its impact on Beauty.
We’ve split the latest (and best) research
into three sections on the business,
consumer and brand impact of the virus.
In this issue category winners and losers,
#quarantinehair, DIY beauty in lockdown
and beauty brands show they care.
7
01
Business
8
1. Premium beauty businesses hit
hardest as travel retail is grounded
Premium beauty specialists with higher exposure to key channels
affected by the lockdown – high end department stores, specialist
beauty stores and travel retail outlets – are suffering more than
those beauty businesses with a mass market presence. Premium
brand Shiseido saw sales in China drop by 55% when the virus hit
in January1, with Coty expecting a 20% decline in its latest quarter.2
Travel retail has been a growth engine for the sector, but with sales
expected to be down by 70% or more in H13, businesses with a greater
reliance on these premium channels are most exposed. For example,
travel retail accounts for 11% of Estee Lauder’s global beauty sales;
for L'Oreal it's 6% as over 50% of its sales are from mass-market
consumer and dermatological cosmetics4.
Global travel retail, localities most affected by the virus
outbreak and destination markets favoured by tourists
are expected to experience the greatest negative impact
in the coming months followed by a gradual recovery
later in the fiscal year.”
Fabrizio Freda, CEO, Estee Lauder Earnings Call,
Feb 6 20205
2. Varied cross-category impact with
fragrances hit but skincare resilient
Beauty businesses are reporting a mixed sales picture across categories
as coronavirus reshapes consumer demand.
Negative impact
As Euromonitor reports6, there are some categories losing out
immediately as the crisis bites: “Fragrances may become the worst
casualty of the pandemic as consumers prioritise necessities and
trade down from high-priced fragrances to body sprays and lower
concentration formats.”
Another category taking a hit is colour cosmetics: “As make-up use
is less frequent during lockdown, colour cosmetics’ negative trajectory
is likely to persist, and a quick recovery after the crisis is less likely”.
9
Positive impact
The biggest category in beauty, skincare, is successfully navigating the
crisis. As Euromonitor reports: “Skincare will remain largely resilient,
with a strong boost in hand care and products perceived as ‘clean’, safe
and therapeutic as the shift towards preventative skin health intensifies.”
In addition, 'feel-good/pampering products like face masks are likely
to benefit, so are dermocosmetics’.
With hairdressers, salons and beauty parlours on lockdown, colourants
are also benefiting as consumers attempt to maintain grooming habits.
In addition, ‘mass-reliant categories, such as deodorants, body wash
/shower gel and overall hair care, will remain relatively steady’.
L’Oreal returned a 4.8% decrease in Q1 2020, with active
cosmetics up by 13.2%, but with consumer products down
3.6% and luxe and professional products down by 13.2%
and 19.5% respectively.
These shifts in behaviour are already having an impact on company
reporting.7 P&G’s beauty segment experienced a 1% increase, with skin,
personal care and hair care increasing by low single digits.8
3. Expectations differ on the recovery
trajectory of premium beauty sales
With China emerging from the crisis and many other markets
looking at loosening lockdowns, attention turns to which beauty
categories will drive sales in a world where consumers will have lower
levels of disposable income. Some analysts believe that there are parallels
with the 2008 financial crisis which, as Figure 1 on Page 11 shows, led
to a drop in demand for certain discretionary categories, especially at
the premium end9.
10Figure 1: Beauty & Personal Categories Sales & Growth recovery
after 2008 financial crisis
Source: Euromonitor, Impact of coronavirus on beauty and personal care, April 2020
Euromonitor states: “Premium beauty took the biggest brunt of the
downturn by going into negative territory in 2009 and not recovering
to pre-crisis levels of growth until 2011.” However, it remains to be
seen to what extent a downturn is likely to bite in the beauty category
over the next couple of years. Many see this as a blip with
the fundamentals in beauty remaining strong:
The current situation does not call into question consumers’
strong appetite for beauty products, which remains intact.
The market should recover quickly as soon as measures
to close sales outlets are lifted.”
Jean-Paul Agon, L’Oreal Chairman and CEO
114. Ecommerce offers a lifeline
but can’t fully cushion the blow
As consumers adjust to an extended period of lockdown, online
purchasing habits are evolving, presenting new opportunities for
brands. Beauty businesses have struggled to convert consumers
purchasing online. This is due to the lack of ability to test products,
ineffective colour matching and a reduced shopper experience, among
other barriers10. However, in the current climate consumers are
having to rethink their usual purchase behaviour.
People are starting to understand that this may be
the new normal for a little while, and now they need to
figure out what supplies they need in their home to make
themselves happy… If mentally you’re feeling unbalanced,
what can you control? You can control your beauty ritual.”
Kendra Butler, Founder & CEO of Alpyn Beauty
In the prestige beauty category, online sales – normally 20%
of the US beauty business – increased by 47 % in the week of
28 March, capturing about 90% of total beauty spend,
according to the NPD Group.
Although driving spend during lockdown, ecommerce still has a lot
of room to grow as it only accounts for around 11% of global beauty
and personal care sales overall11.
1202
Consumer
131. Consumers move away from
glamour in favour of self-care
and wellbeing
According to McKinsey, over half of consumers expect to
reduce spending on beauty during lockdown12. As people prioritise
self-care and wellbeing over glamour, this reduction is likely to impact
fragrance and colour cosmetics most significantly. In fact, early
indicatory data released by Amazon in the US revealed a -1% decline
in colour cosmetics sales in March vs Feb 2020, compared to a +7%
uplift in the total beauty category, and +8% in skincare.13
Lockdown-driven changes to people’s routines mean there is less need
for occasion-reliant products such as make-up, and more demand for
mood-boosting and wellness-oriented products. One example comes
from China where, at the height of the pandemic, face mask sales on
Tmall were up 15-fold compared to 2018.14 In part this sales boost
is likely down to lifestyle influencers on both Tiktok and Instagram
focusing on skincare and wellness in place of their usual content.
In the long term, analysts predict this shift could accelerate the
trend towards natural beauty and ‘glowing skincare’, already strong
prior to the crisis (see figure 2).15 For example, McKinsey predict that
Covid-19 could spark a move towards ‘casualisation’16 in the fashion
and beauty industries. E-Consultancy suggests skincare is well
positioned to engage consumers during lockdown as virtual tutorials
and consultations require less skill or practice than make-up.17
Figure 2
Glowing Skincare
Google trends index 2015-19
110
90
70
50
30
10
-10
4/12 /2015 4/12 /2016 4/12 /2017 4/12 /2018 4/12 /2019
14As consumers seek ways to destress while keeping within budget,
Mintel predicts that value brands offering added emotional value to
functional cleansing products (eg body wash or shampoo) will do well.
Post Covid-19, I think we will see the income barriers
to wellness minimise and brands will adapt a ‘wellness
is a right not a privilege’ mantra"
Clare Hennigan, Senior Beauty Analyst at Mintel
2. DIY beauty presents an opportunity
for innovation
With the shutdown of hair and beauty salons, consumers are looking
for alternative ways to maintain their look, and some are using this as
an opportunity to experiment. Globally, Google searches for DIY hair
have surged since lockdown measures were put in place (see Figure 3)18,
on TikTok, the #quarantinehair tag has more than 395,000 views19,
and on Instagram #coronahair brings up 20,000 posts.20 Clearly this
has had a positive impact on brands already offering DIY beauty
solutions; demand for Olive & June’s at-home mani kits has increased
eightfold since the outbreak21 and haircare brand Madison Reed
has seen sales of its at-home hair colouring kits soar 750%.22
Figure 3: Search interest comparing ‘how to cut’ vs. ‘how to dye’ hair
15Largely, analysts believe that the trend towards DIY beauty will be
short-lived, but with a minority of new DIY-ers continuing at-home
treatments to save money. However, the increased use of online
tutorials and beauty hacks may have a lasting impact for brands
who use them effectively. Wavemaker’s proprietary Livepanel
purchase journey data shows that five of the top 10 most helpful
touchpoints in the beauty category are found in store (eg sales
assistants, in-store displays, free samples).23 With these out of action,
brands have an opportunity to leverage virtual touchpoints such as
online tutorials to keep up their presence during the pandemic.
People want to learn techniques for applying different
products and cleaning their makeup brushes — answers
to which can be provided by both beauty brands and
independent artists.”
Doreen Bloch, CEO at Poshly
3. The clean beauty movement
evolves as focus shifts from
natural ingredients to product
safety and quality
The concept of ‘clean beauty’ is an ever-present yet ever-evolving
trend in the beauty industry which, at its simplest, promises against
‘toxic’ and ‘non-natural’ products. According to NPD, clean beauty
sales are continuing their upward trend, despite both the coronavirus
pandemic and the resulting economic downturn. In fact, clean beauty
is up 11% this year despite beauty’s 14% decline.24
Clean beauty is about safety. And today, there is
nothing people are more concerned about than safety”
Larissa Jensen, NPD’s vice president and beauty
industry adviser
While it appears to be weathering the storm successfully, many
analysts are predicting that the Coronavirus pandemic will trigger a
shift in what clean beauty means. For example, Mintel’s beauty team
believes that consumers who previously avoided preservatives and
natural ingredients are likely to be more willing to accept these
ingredients as they prioritise efficacy and safety from a health
and environmental perspective.24
16McKinsey agrees, predicting an evolution in clean beauty with an
increased emphasis on product safety and quality over organic or
all-natural ingredients.15 As a result, brands will need to educate
consumers on the benefits of non-natural ingredients.
Covid-19 will have clear implications on the evolution of
clean beauty. What started out as a natural ingredient
trend has snowballed into a movement incorporating
elements such as safety, transparency, sourcing and
manufacturing practices.”
Roshida Khanom, Associate Director,
Mintel Beauty & Personal Care
4. Nailcare to become the ‘lipstick
effect’ of the Covid-19 recession
Amid the crisis, nail care appears to be achieving strong growth.
Sales of online nail products were up 12% in the UK’s first weeks
of lockdown,25 Nails Inc. reported a 571% uplift in online sales in
the US,26 and Revlon saw 13.1% sales growth of its nail polishes
year-over-year.27 Experts are comparing the dramatic uptick in the
nail category’s sales to ‘the lipstick effect’, the idea that consumers
spend money on small indulgences during recessions.
Cosmetics Design predicts that this phenomenon will continue even
once lockdowns are lifted as consumers look to treat themselves in
affordable ways, as seen in past recessions.28 While nail care is already
reaping the benefits, the publication suggests facial care is also well
positioned as the type of smaller indulgence consumers will seek out.27
1703
Brand
181. The Beauty industry joins forces
to support workers during the crisis
Caring for the key workers
Beauty brands are looking for ways to thank essential workers during
the pandemic. Many have been donating goods to healthcare workers
and carers across the globe. L’Occitane offered thousands of creams
to healthcare front liners, Dr PAWPAW has donated their bestselling
balms, L’Oréal has gathered its brands to give away more than half a
million hygiene products to frontline workers, Glossier has distributed
thousands of their top skincare and moisturizers around the US,
and Sanctuary Spa has partnered with Work Perks to donate 50,000
body products to healthcare workers, to name just a few.
Brands including UpCircle, Urban Veda and PAI skincare are
distributing care packages to key workers with thank you notes.
The packages include essentials but also pampering products.
Donating to those in need
Several beauty brands are donating hygiene essentials to those who
may not have easy access to them. Soap & Glory has partnered with
The Hygiene Bank, a charity providing personal care to those who
can’t afford it, with each purchase of Soap & Glory products a donation
is made to the charity. The Body Shop is following a similar approach
by donating 30,000 cleaning products to shelters across the US
and Canada.
Beauty Banks, a charity providing essential toiletries, has started a
campaign called #HelpingHands and partnered with several brands
including REN Clean Skincare, Molton Brown and Lucy Bee
to deliver basic products to those in need.
In the UK, some beauty brands are partnering with charities
supporting the elderly. Fragrance house Miller Harris has partnered
with charity Age UK and donated all their scented handwash, lotions
and soaps to the vulnerable elderly. Skincare brand Oskia is using
their labs to create hand sanitisers for care homes across the UK.
Responding to shortages
In response to growing demand and shortage of hand sanitiser, several
brands including LVMH group, Estee Lauder and L’Oréal brands are
using their production labs to manufacture hand sanitisers.
19Estee Lauder has reopened a manufacturing facility to produce
sanitisers for healthcare workers. L’Oréal’s Garnier is creating a new
hand sanitiser range and donating 300,000 bottles to retail workers as
well as making millions available to food retailers. L’Oréal’s La Roche
Posay has partnered with French pharmacies to provide free hand
sanitiser in pharmacies, hospitals and care homes.
Supporting victims of domestic abuse
Since the outbreak of the pandemic, a dramatic increase in domestic
violence cases has been reported globally. Experts have highlighted
that a lockdown situation could worsen existing violence resulting in
victims feeling increasingly vulnerable and isolated. The Body Shop
(among others) has made the decision to partner with NO MORE,
an organisation working towards ending domestic violence and
assaults globally. Together, they created the ‘Isolated Not Alone’
campaign to raise awareness and demand additional funding
for abuse support services.
Avon has been an avid campaigner for women’s safety for many
years through a partnership with Women’s Aid. To combat growing
domestic violence during the crisis, Avon is pledging $1m to front-line
services supporting women and children at risk across the world.
Pop star Rihanna, founder of top performing make-up brand Fenty
Beauty, partnered with Twitter founder Jack Dorsey in LA to set up
a $4.2 million grant to help victims of domestic violence affected by
the lockdown in Los Angeles. Fenty Beauty is also donating 100%
of proceeds from the purchase of a line of products to improve
vulnerable children’s quality of life during the pandemic.
202. Beauty brands launch
e-consultations
The closure of beauty stores has led to several brands bringing
one-on-one consultations and group events online. The initiative
gives employment security to staff as well as creating a new way to
stay connected to consumers. Kiehl’s has moved its popular Healthy
Skin Hub consultations online, offering consumers a wide range
of entertainment, from mask sessions and skincare 101s
to Q&A sessions with experts.
Deciem also recently launched virtual consultation services.
The brand’s retail team is speaking directly to online consumers
through a chat feature or a video call to offer advice on skin concerns
and product usage. The brand has received positive feedback
and experienced a growth in consumer engagement.
Questions we get have gone from 900 to about 2600
in the past week, so our customers want information now
more than ever”
Nicola Kilner, Deciem
Beauty retailer Credo Beauty is using its social channels to promote
the ‘Credo Live’ feature of their website, an online consultation feature
that has been accessible since November 2018 but is now more
popular than ever. The brand highlights the importance of talking
to consumers during their purchase journey and the boost to sales
from online consultations.
Online customers who shop using Credo Live are x15
more likely to make a purchase than those who don’t”
Dawn Dobras, Credo Beauty
213. Beauty brands innovate through
TikTok and highlight the importance
of staying top of mind
Despite the current climate, several brands are seeing the importance
of keeping their product firmly in consumers’ minds by increasing
media spend instead of halting it. P&G has made the decision to
increase their media spend in order to maintain a bond with
consumers so that when products are made available they will
continue to buy them. P&G also noted that the current lockdown
is resulting in a media consumption boost worldwide, and so
a crucial time for brands to keep up their visibility.
We need to work hard to ensure that we maintain
mental and physical availability to the greatest extent
possible, so that those consumers return to their beloved
and trusted brands – which are ours – as they're more
fully available.”
Jon Moeller, P&G
Along with decisions around continuing to invest, brands are also
looking for new ways to innovate. TikTok is currently the second
most downloaded app in the US (after Zoom), and its beauty content
is ever-growing. From beauty hacks to short tutorials, its effortless and
authentic content is keeping users entertained during the lockdown.
The app has launched the #HappyAtHome campaign with a segment
focusing on beauty. Users are sharing beauty videos and challenges
globally. NYX, spotting the potential of TikTok, recently started the
#ButterGlossPop challenge and through partnerships with several
TikTok influencers and a custom song the account received 8.4 billion
views despite having only 14,600 followers on the app. The current
lockdown has led several brands including Nudestix and Fenty Beauty
to accelerate their TikTok content plans. The platform’s unfiltered and
freewheeling content format enables brands to easily continue working
with influencers who can deliver content remotely without the need for
studios or professional photographers.
22Sources
1Global Cosmetics News, Shiseido’s china sales plummet as coronavirus halts consumption,
Feb 10 2020
2
WWD, Coronavirus impact: coty expects 20% decline, 20 March 2020
3
Bloomberg Intelligence – Global beauty, home and personal care – covid outlook
4 Bloomberg Intelligence – Global beauty, home and personal care – covid outlook
5 Moodie Davitt Report, Coronavirus update: Shiseido shows its heart, 3rd February 2020
6 Euromonitor, The impact of coronavirus on beauty and personal care, April 2020
7
FT, LVMH and L’Oreal upbeat on recovery, 16 April 2020
8
GCI Magazine, P&G Q3 202 sales increase 5%, 17 April 2020
9 Euromonitor, The impact of coronavirus on beauty and personal care, April 2020
10 2CV.com, Impact on needs and behaviour within beauty sector,
11 Euromonitor, The impact of coronavirus on beauty and personal care, April 2020
12
McKinsey, 30 March – 5 April 2020, Q: Over the next 2 weeks, do you expect that you will
spend more, about the same, or less on beauty and skincare than normal?
13 McKinsey, Amazon change in yoy growth between 4 w/e 15 Feb and 14 March 2020,
4. Mintel, March 2019
14 Yimian, reporting on Tmall sales, Jan-Feb 2020 vs. Jan-Feb 2018
15
“Glowing skincare”, Google trends weekly index, 2015-2019
16
McKinsey, Perspectives for North America’s fashion industry in a time of crisis, March 2020
17 E-Consultancy, How the beauty industry is responding to coronavirus, 8 April 2020
18Google Trends, search indexes for “how to cut hair” and “how to dye hair”,
YT 27 April 2020, Worldwide
19
Tiktok, 16 April 2020
20
Instagram, 16 April 2020
21 WWD reporting Olive & June internal sales data, 16 April 2020
22 Madison Reed internal data, April 2020
23Livepanel, 2019, top 10 based on % of consumers saying they find each touchpoint useful,
Cosmetics and skincare categories
24
Coronavirus to impact beauty business trends, Mintel, April 2020
25 NPD group, w/e 16th March 2020 compared to same period last year
26 Nails Inc, internal data, April 2020
27 Nielsen, for the week ending on April 11, compared to same period last year
28
Cosmetics Design ‘Retail Expert: Covid-19 impact on beauty pretty big’, 14 April 2020
23Thank you
You can also read
