Within the five biggest European prestige beauty markets, Germany shows the smallest decline in year-to-date value sales as of the end of May 2020, performing better than UK, Spain, France, and Italy, according to market research firm The NPD Group.

Prestige beauty sales declined by -23%

Due to the closure of the majority of retail stores during the COVID-19 pandemic and reduced retail traffic right before and after the closure, the selective beauty market in Germany registers a loss of -23 per cent over the first five months of 2020 (Jan.-May). [1]

The brick and mortar closure of five weeks from March 16 to April 19th was the shortest closure period compared to the other four European countries. Additionally, thanks to the drugstore channel in Germany that remained open, as well as the maturity of the e-commerce channel, the sales declined -65 per cent during the five-week closure in Germany. In comparison, France declined -88%, Spain -87%, and Italy -86% during their respective store closure period, according to The NPD Group.

Up to week 11 (March 15th, 2020) the German selective beauty market was flat compared to last year. Fragrances and hair categories registered growth while makeup and skincare showed a negative performance compared to the same period in 2019.

E-commerce main winner of the lockdown

For calendar year 2019, the online channel showed a +14 per cent growth, brick and mortar, which stands for 84 per cent of the value sales recorded a -3 per cent result.

During the closure of the majority of the brick and mortar stores in Germany (March 16th - April 19th, 2020), the market changed its dynamics. E-commerce climbed up to almost 60 per cent of the sales weight and more than doubled growth pace.

Thanks to the high e-commerce weight before the closure and the rising home-spa trend, the skincare category was able to show a better resilience compared to the total beauty market.

While E-commerce has a higher growth rate when compared to brick and mortar, it only accounted for 18 per cent of the German prestige beauty market before the brick and mortar closure,” said Samantha Grand, Director of Beauty Prestige Germany at The NPD Group. Furthermore, even five weeks after re-opening of brick and mortar, the weight of prestige beauty sales in e-commerce was still higher than in the brick and mortar channel.

The main question is how much of the brick and mortar decline will be compensated by the online dynamism, and how resilient could the prestige beauty industry be towards the new prioritization of consumers spend. Another question is if the ‘new normal’ will drive a change in assortment, pricing and promotion. 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,” concluded Grand.