Our lives have changed profoundly over the last one and a half years and we all had to get used to staying at home for long periods, not being able to see friends and families and wearing protective face masks in public. And the cosmetics industry had to adjust to what we now call the “new normal” as well.
We saw topics like health and hygiene gain massive importance but also approaches to help consumers deal with the psychological impacts of the pandemic. Due to lockdowns, the restriction of personal contacts and the closure of retail stores we also saw a huge leap in digitalization and found new ways of connecting with customers and business partners.
Last year in May we hosted our first CLRoundtable to discuss how our industry adapted to this new situation. In 2021 we fortunately see the number of people who get vaccinated increasing and there is hope that things will get back to normal soon. But there is still a lot of uncertainty regarding the future of the industry. So, we decided to host another CLRoundtable and asked our sales experts from around the world for their outlook on the future of the cosmetics industry.
Participants:
Elizabeth Sugiri
International Technical Sales Manager, Singapore
Harald van der Hoeven
Director Product Design & Development
Jessica Guo
International Technical Sales Manager, China
Francisco Fernandez Palacio
International Technical Sales Manager
Ralf Kuschnereit
Director Gloabal Sales
Christelle Gay
Technico-Commerciale Filiale France
John Lofthouse
Director Global Sales & Marketing
What were the biggest challenges in the past year and how did you overcome them?
John:
Keeping in touch! In this strange year my biggest issue has been keeping in touch.
Time has been shifting and sometimes days turn into weeks before you notice. I find my “Actions” marker board has been invaluable in reminding me to call/zoom/what’s-app/wechat people. While communication has moved into a more digital world my reminders are definitely getting more analog.
When we do finally start seeing each other in the real world it will be strange to shift back, but looking forward to it!
Elizabeth:
Yes, also for me the biggest challenge was not being able to see the customers face to face to explain the CLR products. The customers are also confused because there were lots of zoom meetings held at that time that other suppliers would want them to attend as well.
Christelle:
In 2020 we had to face a totally new and unexpected situation with the lockdown in France. Everything closed from one day to another, business travel and events have been cancelled. After the shock of these announcements, we had to adapt quickly and found alternative solutions to keep in touch with our customers. The most difficult part is the lack of visibility and the uncertainness of the months, maybe years, coming. There is a growing concern about shortage and availabilities, everyone wants to secure their supply chain. Establishing a confident relationship is more than ever of vital importance and modern communication tools have been a priceless help to do so.
Ralf:
In my opinion the biggest challenge was for sure the uncertainness and the ups and downs. All of us, irrespective whether customer or consumer, have to adapt to the continuous changes with new and quite often unclear structures. It was a situation that none of us has ever expected and which has changed our daily lives completely.
As the cosmetics industry is always driven by relationships – sometimes you can hear it is a people’s business which I would also confirm – the biggest change was that the way of communication has totally changed. Travelling with personal contacts has more or less completely stopped and has been transferred to digital tools. Therefore, we have seen a lot of digital conferences coming up with the risk that there was already a surplus on such offers.
Also, global supply has become an issue. It seems that in some areas customers recognized how sensitive supply chains have become and will have a different look on that, so secured supply will certainly be an issue in the future.
Jessica:
In China many customers stopped developments because they were afraid of an economic downturn. The more important it is now to convince them to prepare the possible projects. Focusing on functions proving of products and keeping communication with customers to let them know the proved function.
Francisco:
My situation last year was a very particular one. I joined CLR Berlin in December ’19 and after only two months working in the company, this virus arrived and locked us all in our homes. Therefore, I started this interesting project since the current situation did not allow me to visit the clients I was going to start working with. This was a problem at the beginning since it partially limited my activity and I could not develop in the markets I was dealing with to the extent I had hoped. However, thanks to the clients’ proactivity (and most of all, thanks to the support of our agents) I was able to overcome this major problem and to establish a completely normal and even friendly relationship with them, becoming partners, even if only virtually for the time being.
Harald:
On the personal level, I am from the Netherlands and I live in Germany and I haven’t seen my parents in ages. It is what it is and I just keep my head down, so to say, but it obviously is not nice. On the professional level I see that many customers, especially those who are dependent on sales in countries and economies which are suffering from the Covid-19 crisis, are struggling. Also, those customers which are dependent on sales in brick-and-mortar shops or beauticians are having a hard time. It is up to the customers to adapt and be prepared for the future, but we can support them with staying innovative with the development of their products. Although Covid-19 has brought many problems, it has also brought opportunities. Development of new cosmetic products in answer to clear development briefs has been reduced, but this opens the door for really new product development or even blue sky stuff. We see that taking place quite a lot in the industry and, I think, we have been very successful in the communication with our customers on this.
As for skincare concepts and active ingredients, which shift in interest in the cosmetic industry, caused by the Covid-19 situation, have you seen?
Francisco:
There is no doubt that the pandemic has forever changed some of the ways in which we do things, and this has taken on an even more special relevance when it comes to business or even our day-to-day lives. And this is where the cosmetics industry has had to change direction and adapt to the current situation.
Nowadays, we have all increased the number of video calls we make every day, not only with colleagues or customers but also with friends and family. Maybe in the past, these new technologies were not part of our daily lives, but since the beginning of last year people are less lazy to arrange a virtual meeting with the person they need to contact. And this has certainly changed the cosmetics industry. Being exposed to a camera for hours of conversation with a light that enhances the visibility of the face has made people pay more attention to the physical appearance of their skin. As a result, many end consumers have started to use cosmetic products to minimize minor skin imperfections, the most common being dark circles under the eyes, pimples or wrinkles.
In addition to this, there is no doubt that hand care has been a “hot” spot throughout this pandemic. The application of hydroalcoholic gels, so beneficial in the fight against the virus, causes problems in our skin, such as dryness. Therefore, the use of cosmetic products for hand care has also undergone an important change in trend, being one of the most demanded by end customers.
Christelle:
In recent years, we have seen the rise of “clean beauty” and “natural beauty” trends. This movement seems to have accelerated with the Covid-19 crisis. With the pandemic, a feeling of insecurity has emerged which is translated in our bathroom by the appearance of clean, locally sourced, safe and eco-friendly products. Everyone wants to take care of him- or herself as well as the planet, combining naturalness, sustainability and safety.
Elizabeth:
The change is mostly seen in the concept, as the customers are focusing more on hygiene and “health and well-being “ concepts. Such a feeling created by the products are used by the customers to feel good. The trend in active ingredients are natural ingredients which are also good in their efficacy.
Harald:
It was already a trend before the Covid-19 situation started developing, but “skin health” has definitely become a big topic for our industry. The consumer is definitely increasingly interested in products which support their health. “Health” is quite hard to define, though, but we know that when skin is healthy, it looks and feels good and even the microbiota on and in our skin profit from this too. All the most important cosmetic traits of skin start with it being healthy. This trend is therefore definitely relevant. At CLR we have always had a big focus on skin health with our active ingredients. Products like ProRenew Complex CLR™ and Repair Complex CLR™ PF are renowned and proven to work in enabling the skin cells to essentially help themselves, whenever they are exposed to external insults or, in general, during the aging process, for instance. AnnonaSense CLR™ is another good product. It supports the overall health of skin by boosting the biological system with which our skin tries to maintain health, the so-called endocannabinoid system.
John:
Well-being. Over the last year I have noticed many more, well-being concepts being launched, e.g. balancing, calming, home spa, anything to help people feel better about themselves and more comfortable in/with their skin. This seems to have pushed on the probiotic /microbiota trend. CBD cosmetics also seem to be growing where permitted, and concepts around the same target mechanisms like our own AnnonaSense CLR™ have benefitted from this interest.
Ralf:
For sure there was a big temporary interest in everything that was related to disinfection. At the same time it seems that many companies who tried to enter this business came back to their former business structures and have recognized that this won’t be a long term business for them. Nevertheless, the increased usage of such products also generated an increased interest in products for recovering the skin barrier function. This might be done by ingredients that provide moisturization, give skin repair properties but also affect the skin microbiome in a positive way. Furthermore, the intensive use of masks has lead to new consumer needs to avoid skin issues coming from this usage, especially for younger people and when you have to wear mask for long periods of time.
Jessica:
Skin microbiome came up in the end of 2020. Healthy and high activity are the major topics in my area.
Some cosmetic brands seem to be untouched by the Covid-19 situation, whereas others are suffering or even do not exist anymore. Can you tell us what you have seen in the market and maybe give brands advice on how to get through this situation or even profit from it?
Ralf:
This depends on the field of application, it seems for instance that color cosmetics have suffered a lot while other industries like traditional skin care were not affected as much. Since people had to change their leisure behavior also the use of products like sunscreens or products that you use after the fitness studio have changed.
On the other hand, it also seems that there was a shift on the buying habits of customers. Many shops had to close due to the general situation so the consumer tried to buy more products in one shop rather than visiting different ones. This might offer some opportunities for brands.
But the question in general is, how far does it make sense to change to short term profitable business or to enter markets which are already well saturated. I would see a high risk that this ends up in a predatory competition in which it will be difficult to get any profits. So, it might be more important to analyze the own strengths and to invest in those fields. Additionally, it will be important to keep customer loyalty. Here digitalization and online shops can be helpful and will remain in a strong position on the market. Besides, topics like “natural” and “clean” will gain importance. The discussion on climate change was not so important any more in the last year but for sure consumers will come back on that and will value it even more than before.
John:
As Ralf said, skin care has definitely performed better than colour cosmetics. I am sure there will be a swing back as we open up again, a big concern, certainly in the UK will be a loss of premium sales points on the high street with many department stores closing their doors for good. We will probably see a continued low level of Airport sales as the travel sector struggles to recover. The real change is of course the move to online sales. Whilst this does offer some opportunities in digital marketing, a worry here is that people get used to reordering their cosmetics online and as they can’t “try before they buy” customers become more conservative in their buying behaviour leading to a reduction in the opportunity for brand innovation.
Elizabeth:
What I observed of brands like Sulwahsoo or premium brands is that they are quite active in giving out rewards to their loyal customers like giving you points for every product purchase and these points can be exchanged with their products or facial services accordingly. These brands that are surviving in this situation are also actively participating in all kinds of social media such as tiktok, instagram, facebook, twitter, etc.
Jessica:
Jala had lots of stores which were affected a lot during 2020, they already reacted by building up online channels. They try to build up the system between supply chain and the selling channels which can help to decrease the supply period.
Christelle:
It seems like all brands and companies are not equal in facing Covid-19 crisis. Of course, notoriety and financial health are related to the ability to face the storm, but that does not necessarily mean success.
The most resistant brands are also the most resilient, the ones which have been able to quickly adapt and develop their online presence or new partnership. Agility seems to be the keyword of the year.
Francisco:
I fully agree. Undoubtedly, the point that has made the difference in industries during this pandemic has been the power of adaptation (not only in the cosmetics industry, but also in other sectors such as food, tourism or sports, among others). This virus arrived, and in just a few weeks, it changed everyone’s lives, changing (perhaps forever) our daily lives and, as a consequence, our consumption habits. As a result, the companies that were able to adapt quickly to this situation were the ones that were able to survive and even improve their results compared to past years. From my experience, I saw that cosmetic companies chose one of the following two options: Many at the beginning, did not give much importance to the pandemic and therefore did not study a new possible scenario in the near future. However, those that did from the beginning (group two) started to ask for assets or claims that could be attractive to the end consumer in the new scenario that was being created. This was quickly appreciated by the end customers who found in the formulas innovations that could be beneficial for the situation we were living in. And therefore, it is they who, thanks to their rapid adaptation capacity, have been able to survive without major problems in this historical period that has been so hard for everyone.
Harald:
I don’t know whether there is any brand which is untouched by the situation we have been in, by now. In the beginning it was clear to see that the color cosmetics and, later, the sun care industry were suffering strongly. Now we can also see that hair care, body care and skincare have started to go down as well. Not as strongly as color cosmetics or sun care, but still. Those brands which have suffered the least will most probably have sales activities in countries which have been relatively untouched by the Covid-19 situation, China for instance. What I can advise brands to do, is to stay innovative, or better, become more innovative, in these times. Brands who don’t develop themselves and who don’t try to stay on top of things, might well be in trouble for the long run. From market research reports we can clearly see that innovative brands are still successful, especially those brands which are able to communicate with their consumers, or rather “fan base”, well and authentically. Social media and other internet-based ways of communication are, in my view, a must.
What development of the current situation do you wish for in the future?
Francisco:
A very general response to this situation would be the awareness that people have had of the importance of good personal hygiene, of a proper health system as well as all the medical developments that this pandemic has brought us. In the specific case of the cosmetics industry, I like the fact that people are becoming more aware of the fact that some of the problems with the physical appearance of the skin (the main physical barrier in our body) are related to the microbiome of the skin. So now the cosmetic industry is talking more and more about things like probiotics, which are essential for a healthy and balanced microbiome. Therefore, I hope that this trend will not only be a one-off but that all end consumers will become aware that starting with a healthy and balanced microbiome will bring benefits not only to the physical appearance of our skin (which of course it also does) but also to the internal processes of our bodies that are fundamental in our daily lives, such as cell differentiation in the process of skin renewal.
Jessica:
AI technology and big data analysis for business using.
Elizabeth:
It would be good if we could develop a virtual tour around our company’s facilities, products, and all the good things about CLR in order for the customers to know more about CLR. This can in turn boost attraction and increase connections between customers and the brand.
John:
I hope to get back to enjoying travelling and meeting with friends in safety. Though I suspect things will not be how they were. It will be nice not to have to wear masks particularly in social situations. Masks can help keep us safe, but we lose so much communication by covering our faces. I also hope we can learn to be more resilient and prepared for the future. I’m sure there is a long way to go before we can put Covid-19 behind us.
Christelle:
The best-case scenario is a total reopening of stores, restaurants, etc., and the resumption of economic activity. People are dying to go back to a certain “normality”. With the acceleration of vaccine campaigns there is a new hope. R&D labs are working at full capacities and we hope to make these projects a reality sooner than later.
Harald:
I could give you the sensible answer and say that it may be good to work more from home. If there is one thing which has profited from Covid-19 it is probably nature. Don’t get me wrong, but, at this point in time, I just want everything to go back to how it was. This sounds kind of sad, but I don’t mean it that way. What I mean to say is that Covid-19 has definitely taught us to appreciate the small things in life, or rather, those things which we thought were small before the whole thing started. It is definitely a life-reset and I hope that we have learnt from it, as soon as it is over. With the current vaccination-rate here in Europe it might still take a while though. That gives us more time to learn, which probably doesn’t hurt either.
Ralf:
I agree. Even if the whole situation was not very pleasant to most of us there are also some opportunities to learn from. It is a matter of discussion how far the traveling behavior can be changed and can become more efficient. On the other hand, it is also obvious that there is still a need for personal contacts, so it will be important to find the right balance here. Digitalization was certainly one of the key topics in the last year but it was also visible that the challenge is to use it in the right way beside other tools.