Zenith’s latest report forecasts Beauty & Luxury Adspend
As per the latest report of Zenith ’s Business Intelligence – Beauty and Personal Luxury, there has been a decline in demand for cosmetics and fragrances due to this social distancing period. And, this will continue to hold back the recovery in personal luxury and beauty advertising to 1.7% in the year 2021. This falls below the growth rate of 4.4% for the total ad spend included in the report in all 11 key markets.
The reason behind this massive fall in cosmetics and fragrances, as people have stopped meeting personally with each other. On the other hand, the demand for hair and skincare has been normal. The demand for beauty and cosmetics will not go back to normal until the consumers return to their pre-pandemic habits. There will be reduced sales, particularly in the cosmetics and fragrance sectors.
Only eCommerce and Better environments can help to retrieve the falling reach of TV and magazines
Beauty sectors tend to spend their budget to advertise their products on TVs and magazines than any other brands. As per Zenith, in the year 2020, the beauty brands have spent 18.3% of their budgets on magazine advertising, which is 4.3 times more than any other sector. And, 42.2% on TVs which is again 1.6 times more than others. As per Euromonitor International, in 2019 11.8% of personal luxury and beauty sales were via eCommerce, compared to 13.2% for the market as a whole.
Although, Zenith has forecasted that there will be a rise in digital advertising of 5.9% from 2019-2022.
“Beauty brands were forced to accelerate their eCommerce strategies in 2020, some pioneering the use of virtual and augmented reality to allow consumers to try on and model products online,” said Christian Lee, Global Managing Director, Zenith. “Continued innovation in eCommerce technology to improve the consumer experience will be key to unlocking brand growth for 2021 and beyond.”
India and France will be the leaders in personal luxury and beauty ad spend growth
According to Zenith, France is expected to become the best performing ad market over the next two years with a growth rate of 13.3% per year on average. On the other hand, in India the personal luxury and beauty ad spend will be 15.2% higher in the year 2022 than it was in 2019.
The demand will recover slowly across North America and the rest of Western Europe, leading to annual growth in beauty ad spend of 1%-2% a year in Canada, Germany, Italy, Spain, the UK, and the US.
“Growth in beauty and personal luxury advertising will lag behind the market while consumers remain cautious about traveling in public and meeting in person,” said Jonathan Barnard, Head of Forecasting, Zenith. “But by investing in digital technology that embeds eCommerce into the heart of their operations, brands will prime themselves for more rapid growth when demand picks up.”