Mintel releases report on how the beauty industry survives a recession

Global market research provider, Mintel, has revealed the ‘How the beauty industry survives a recession’ report following the effect that the Covid-19 pandemic has had on the economy.

In May the Chancellor of the Exchequer told the House of Lords Economic Affairs Committee that the UK was facing a “severe recession, the likes of which we haven’t seen”. Currently, Europe looks to Spain and Italy for indicators of a post-Covid-19 future, but the talk of a recession on the horizon means it is crucial for beauty businesses to plan.

“Covid-19 has put Italian consumers in the right mindset for a recession,” says Alex Fisher, associate director, Mintel Beauty & Personal Care. “Spending will be planned, making it important for companies and brands to communicate value for money across beauty products and services.

“The last recession created specific circumstances that look set to return this time around. Small brands and startups should take advantage of cheap advertising rates right now, while beauty services must examine their survival strategies.”

According to the report, Mintel states that Covid-19 preparation has put Italian consumers into a recessionary state of mind and beauty will rely heavily on shopper budgets, meaning the discount strategy will need serious consideration.

However, Spanish consumers are said to be currently using beauty as a way to see them through these dark times – proving indulgence can still provide value to consumers who want an escape from financial hardship. Taking care of skin and hair through more routine activities and additional treatments puts Spanish consumers at ease, according to Mintel research. Spanish consumers are opening up to new experiences and products, looking for those that will ease their worries. For example, 36% of Spanish men have bought beauty & personal care products from a website they haven’t used before, according to Mintel.

Fight discount culture with value
Prestige brands have previously protected their position during recessions by communicating the value of their expertise or developing budget-friendly product ranges that go toe-to-toe with discount offerings.

The salon market suffered between 2008 and 2010, with sales of haircare products in UK salons declining by £20m over this time, according to Mintel. Consumers stopped visiting salons in favour of home-friendly alternatives. While many Italians are looking forward to visiting salons again – according to Mintel research – these visits may be less frequent and consumers will be looking for cheaper treatments.

Retailers and salons can be creative with their space, bringing new revenue opportunities. Complying with social distancing guidelines, there are opportunities to offer new activities outside of shopping hours. As well as this, if consumers need to reduce their BPC budget, it may help salons to stock a range in the retail area below their primary offering.

Offer a simple escape
Economic uncertainty creates stress and confusion for everyone, but consumers can feel guilty for indulging in relaxation. Give people permission to care for themselves by creating simple products that meet their wellbeing needs as well as their wallet.

Stay in touch with consumers
Consumers need constant reassurance during turbulent times, so staying quiet during a recession can damage trust. Support them with the innovation they need now, especially at a time when competitors may have gone ‘off-air’. Brands that stay quiet during a recession will find it hard to maintain a customer relationship.

Read the full Mintel ‘How the beauty industry survives a recession’ report here. 

This is a fast-moving issue and should be read as correct at the date of publication.