Brands are looking for strategies to take advantage of shifting trends among shoppers
Irish beauty brands have seen a surge in online sales since the pandemic, but many are still playing catch-up from lockdown losses, while Brexit and supply shortages threaten stocks.
The global beauty industry is predicted to be worth over $700bn (around €600bn) by 2025, with Irish people spending €1.2bn on skincare, hair products and cosmetics in 2019.
According to Wendy Slattery, co-founder and chief executive officer of data analytics company Beauty Buddy, online cosmetics sales have doubled since the pandemic hit, but the large majority of products – around 75pc – are still bought in store.
“It’s a huge jump, but it’s still small from a beauty consumer [point of view],” Ms Slattery told the Irish Independent.
“You can see that from the likes of Boots redecorating and the likes of Sephora, which has gone into all the (US chain stores like) Walgreens and Targets. People still shop beauty in store.”
Tracey Ryan, managing director and master formulator at cosmetics collective Codex Beauty, says online sales can be more difficult than retail, where customers linger for longer and tend to make more snap purchases.
“Retail obviously completely fell away, and that was quite a chunk of our business going into the whole Covid era, so that was a bit of a knock,” Ms Ryan said.
“Online sales definitely picked up, and that has been great, but there has been a lot more competition online. There’s a lot more people
competing for attention.”
The ratio of online to retail sales has started to shift again for Niamh Ryan, co-founder and chief operating officer at Ella & Jo Cosmetics, whose salon in Ballina, Co Mayo, has reopened since restrictions lifted.
The company’s new desktop ring light, which would have been primarily marketed to beauty influencers, has also proved extremely popular with people working from home.
“It’s something that was a new market that we didn’t expect, where you have business people coming in to buy it so that they look good on their Zoom calls,” says founder and CEO Andrea Griffin.
She is now hard at work on the company’s Christmas product launches, but is watching out for potential pitfalls from supply delays.
The pandemic exacerbated existing strains in just-in-time supply chains, leading to raw material shortages and skyrocketing prices.
“Covid helped in one way because we are an e-commerce business primarily,” Ms Griffin said, “but it has had a knock-on effect in terms of the supply chain. Now we’re seeing it more than ever, where getting parts is getting harder.
“Global logistics have really been impacted. Shipping costs, both locally and internationally, have skyrocketed, so it has really had an impact on the bottom line for businesses, unfortunately.
“I think Christmas will be quite different this year, with the availability of products for people to buy.”
Lead times have multiplied exponentially, says Niamh Ryan, co-founder and chief operating officer at Ella & Jo Cosmetics, with 12-week lead times turning into six months for some ingredients, with the biggest hit to packaging.
“We’ve been really managing the stock as tightly as possible, keeping an eye on the numbers – no sliding,” she said. “There has been a huge demand on plastic, a huge demand on glass.”
Meanwhile, Brexit continues to bite, with the supply chain impact “yet to be fully manifested”, according to the Taoiseach.
While Brexit hasn’t stopped beauty brands from expanding into the UK – a short reprieve for Irish exporters from a further delay in UK customs and paperwork checks is also helping – it has caused problems on the purchasing side.
Codex Beauty’s Tracey Ryan, who founded the Bia skincare range, tries as much as possible to source ingredients close to home – such as seaweed from the west of Ireland – because sourcing from the UK “has been a bit of a nightmare”.
“We have had to cut some of our smaller suppliers from the UK because, between shipping times and not really understanding what final prices are going to be, with various taxes added on, it hasn’t really worked out,” she said.
Many Irish beauty start-ups are self-funded so have not had to go out and raise money during the pandemic. But what about those who have?
Data analytics firm Beauty Buddy is currently on a fundraising round, with almost half of a planned €500,000 (maximum) raised.
But doing things on LinkedIn and Zoom “has taken so much longer” says Wendy Slattery.
She is now looking to tap the company’s 50,000 users – who populate the app with product reviews – in a crowdfunding drive for part of the raise.
It’s a tough market for women, with just over 2pc of venture capital funding going to female-led start-ups last year.
“It’s one million percent an issue,” Ms Slattery says. “For us it’s an issue on two points because we’re female and the company is called Beauty Buddy, so straight away there are a lot of presumptions made about what we do as a company.
“You have to knock on way more doors until you find the right person. But it’s doable.”