Sales of beauty products in the selective channel [1] in Germany increased by 3% in the in the third quarter compared to the same period in 2020, reported market research firm NPD Group and the trade association VKE-Kosmetikverbrand. However, sales over the period January-September 2021 remained down 7% compared to 2020 [2].

Fragrances and e-commerce drive sales

The fragrance category clearly appears as the main growth driver, with sales up 7% compared to 2020 and an increase of more than 4% compared to 2019. Skin care, on the other hand, has not yet regained its 2019 level and even remains below the 2020 level. Eventually, the make-up category, which was negatively impacted in 2020, stabilized in 2021 but sales remain down by nearly 20% compared to the 2019 mark.

“The fragrance category is experiencing a faster recovery in the nine countries that we follow at The NPD Group, while social life is gradually getting back to normal. We believe fragrance could even become the new ‘lipstick index’, ” said Samantha Grand, Executive Director, Germany Beauty at The NPD Group.

Actually, perfumes are less impacted than makeup by requirements to wear face masks. Moreover, according to The NPD Group, local demands may also have been stimulated by the dramatic decline in the number of international travel, with a shift in sales previously made in travel retail.

Online sales continue to play a major role. The e-commerce now accounts for 40% of the selective beauty market in Germany, compared to 20% two years ago, reported The NPD Group and VKE-Kosmetikverbrand.

However, e-commerce sales did not make up the decline of sales in brick and mortar stores that had to close during lockdown periods. However, while restrictions ended in May 2021, the number of shoppers in physical stores remained below expectations, according to The NPD Group, partly due to the absence of international tourists and the continued home working for many employees.

“The pandemic has definitely been a driver and accelerator of omnichannel strategies. But brands also took advantage of this opportunity to improve the customer experience,” emphasized Martin Ruppmann, Managing Director of VKE-Kosmetikverbrand.

High expectations for the end of the year

In such a context, the last quarter will therefore play a key role for the German prestige beauty market, with high expectations from the various players, whether for Black Friday or for Christmas sales.

However, “purchasing behaviours could be very different compared to recent years,” pointed Samantha Grand. “A study by The NPD Group in the United States already confirms this possibility for the American beauty market. The results show, among other things, that we can assume consumers will be shopping earlier this year as they anticipate supply chain shortages and resultant price increases."