Prestige beauty in UK, France and Germany shows ‘signs of recovery’, says NPD Group

The ongoing COVID-19 crisis that kickstarted nationwide lockdowns across the globe early last year inevitably impacted all facets of the beauty industry, including prestige. Last year, Euromonitor International predicted a total decline of 18% for the global luxury goods market​, which included beauty and fragrances, because of the crisis.

However, data compiled by the NPD Group indicated signs of recovery in a few of Europe’s most important prestige beauty markets: the UK, France and Germany.

UK prestige beauty ‘quick to respond’ to consumer changes​

In the first half (H1) of 2020 from January to the end of June, Germany’s prestige beauty market recorded an overall 21% drop in sales value on the previous year; France saw sales decline 30% and the UK reported a 37% drop.

However, by the end of October, 2020, the UK’s prestige beauty market – covering skin care, body care, makeup, fragrance and men’s grooming – reported a total sales rise of 38% versus the same period in 2019 (January-October), with sales totted up at €543.9m (£491m).

And much of this uptick could be attributed to brands moving online, according to the NPD Group. From January to the end of October 2020, e-commerce accounted for 41% of total prestige beauty sales in the UK versus 21% for the same period in 2019.

Emma Fishwick, account manager at NPD UK Beauty, said prestige brands and online retailers had been “quick to respond to the change in consumer behaviour” ​during early lockdowns, with many creating online incentives like free deliveries, price promotions or gifts with purchase. Many had also innovated with online technologies and platforms, she said.

“Many brands switched their marketing efforts online with innovations including virtual consultations, classes and facials at home led by a skincare professional. Skin care sets and kits proved very popular because they offer value for money and encourage experimentation via trial size products,”​ Fishwick said.

In the UK, online sales of prestige skin care reported the largest growth – up 54% between January and October on the same period in 2019. E-commerce sales of prestige face cream rose 67% in the same period; face cleansers were up 66% and face serums up 32%.

Importantly, Fishwick said online growth across UK prestige beauty was set to continue as retailers continued to find “new ways to enhance their high street store offering with omnichannel presence online”.​

Germany prestige beauty buoyed by e-commerce and skin care​

Samantha Grand, director of Beauty Prestige Germany at the NPD Group, agreed and said the importance of omnichannel presence to connect online and offline channels had become “even more evident with the recent impact of the COVID-19 pandemic”. ​

During the five-week lockdown in Germany last year (March 16 to April 19, 2020), e-commerce accounted for almost 60% of the country’s prestige beauty sales; prior to the lockdown it had only accounted for 18% of sales. Grand said many prestige beauty brands had been quick to move online, with skin care showing the “strongest e-commerce performance” ​with almost 30% of prestige sales generated online in H1 2020.

Given the 14% overall decline in Germany’s total prestige beauty market for the third quarter (Q3) of 2020 (July – September), Grand said omnichannel strategies would continue to be important for recovery.

“The beauty industry will have to engage with consumers in more creative ways, involve new technologies, and find ways to make the shopping experience appealing and enjoyable during these changing times,” ​she said.

France prestige beauty sees online luxury perfumes soar​

For France, online sales had also proven important in prestige beauty last year, notably for perfumes. Between August and October 2020, online sales of luxury perfumes increased 46% in value, with perfume gift sets “particularly dynamic”​ – up 98% on the previous year.

Mathilde Lion, beauty expert for Europe at the NPD Group, said that whilst the weight of online purchases of prestige perfumes remained “modest in France”​ compared to the UK and Germany, it had still been an important channel for the category.

“Brands and retailers have shown very rapid agility and capacity to adapt in recent months by offering new methods of testing perfumes at home and by developing online or telephone advice, click and collect and live broadcasts,”​ Lion said.

She said the strong performance of online prestige perfume sales in France would “continue into 2021”.​