Health and Beauty Specialist Retailers in New Zealand

2021 DEVELOPMENTS

Beauty specialist retailers sees recovery amid the pandemic

While heightened health awareness because of the pandemic drove up sales via chemists/pharmacies, drugstores/parapharmacies, and vitamins and dietary supplements specialist retailers as consumers purchased immune-boosting vitamins and essential OTC medicine in preparation to combat the effects of the virus, beauty and specialist retailers and optical goods stores suffered from declining sales due to remote working measures, which therefore limited interaction with others and placed less of a focus on appearance, ultimately leading to declining sales for colour cosmetics in particular.

Improving sales of skin care and hair care as consumers resort to home-based self-care

The purchase of skin care and hair care also increased as the prolonged impact of the pandemic, with various restrictions including the closure of beauty salons for certain periods, encouraged consumers to adapt by pampering themselves at home, or resorting to treating or dyeing their own hair to address home seclusion fatigue.

Consumers increasingly demand organic products and sustainable practices from brands

Greater time spent at home during the pandemic led to a rise in bespoke, homemade beauty regimes. This is likely to lead to increasing demand for organic products in New Zealand, with the pandemic fostering a greater interest in conscious purchasing decisions when choosing beauty-related products in terms of ingredient sourcing or their overall impact on the environment, including packaging.

PROSPECTS AND OPPORTUNITIES

Health and beauty specialist retailers to record positive performance as discretionary income improves

As the local economy recovers from the impact of the pandemic and restricted industries return to full-fledged operational hours, discretionary/disposable incomes are likely to rise in line with improving consumer sentiment, meaning that an increasing number of consumers will likely focus more on making non-essential purchases. Greater mobility outside of the home will ensure that a greater emphasis will be placed once again on one’s appearance due to increasing socialising opportunities.

Further shift towards natural products will encourage greater transparency from brands

The trend towards low, natural maintenance for hair and skin fostered during the pandemic is likely to lead to greater demand for more natural, organic brands, which health and beauty specialist retailers must consider when expanding their product portfolios. Manufacturers are now using natural ingredient positioning as a strategy to attract a wider range of consumers, including younger, more environmentally-aware generations.

Omnichannel strategies crucial for agile health and beauty specialists moving forward

Flexible or hybrid working measures are likely to persist over the forecast period. Further time spent at home is likely to lead to further share gain for online sales in line with demand for convenience and online shopping, especially with models such as click-and-collect, which give consumers options which best suit their needs.