jiayinzou

[jiayinzou]

Jiayin Zou

ID 86351335

Econ 20A

Monday6Econlive

Since the epidemic, news of tight cash flow has been heard from almost every industry. Start-up companies are struggling to save themselves, while large companies have implemented measures such as layoffs and employee pay cuts. Since the outbreak of the new crown pneumonia at the beginning of last year, wearing masks has become a habit of people. Under the cover of masks, delicate people reduce the frequency of makeup. In the past year, sales of color cosmetics products have fallen sharply, of which sales of lipsticks have fallen by nearly half. Due to the inconvenience of going out and poor logistics, people hardly buy cosmetics.

During the epidemic, many people reduce the consumption of cosmetics. The sales of cosmetics have fallen sharply, leading to a drop in demand. The department store channels of major brands have declined the most. Not only are they unable to operate, but it is even more difficult that cosmetics brands have failed to respond to how to save themselves. Therefore, suspension of operations basically means that sales also cease. Although many shopping malls are now open, consumers cannot walk in with confidence in a day or two. The shopping consumption index will not return to normal in two or three months. The epidemic must still be serious, and it will continue to affect the demons of consumers. According to data from the National Bureau of Statistics, the channel of beauty department stores declined the most, reaching -34.9%.

The outbreak of the epidemic has changed the consumption patterns of most American consumers-from online to offline. According to data from McKinsey Consulting, physical store sales account for 85% of the overall sales of beauty products, and many consumers like to try before buying. During the epidemic, many physical stores in the United States were forced to close down, and beauty products could only be sold online. Although buying beauty products online greatly reduces the consumer experience, many retailers still work hard on online e-commerce businesses, attracting consumers with online beauty tutorials and virtual trials.

According to a survey by McKinsey & Company, since the outbreak, the number of consumers willing to buy beauty products online has risen by 25%. However, the increase in online sales is not enough to make up for the impact of the epidemic on the entire beauty industry. Emily Gerstell, associate partner of McKinsey Consulting: "Based on what we are currently observing in the United States, we have adjusted our expectations for the beauty market. We previously thought that the beauty market might drop by as much as 35 %. If the current trend continues, the result may not be so bad, and we expect a drop of close to 20%."