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    Breaking News

    German Prestige Starts Recovery

    Germany’s prestige beauty market is performing better than other countries, says The NPD Group.

    German Prestige Starts Recovery
    During the closure of the majority of the brick and mortar stores (March 16 – April 19, 2020), e-commerce climbed up to almost 60 percent of the sales weight and more than doubled growth pace.
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    Within the five biggest European prestige beauty markets, Germany shows the smallest decline in year-to-date value sales as of end of May 2020, performing better than UK, Spain, France, and Italy, according to global information company The NPD Group Inc. 
     
    In comparison, the US prestige beauty market declines are stronger, with a decline of three additional percentage points. 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 registered a loss of -23 percent over the first five months of 2020 (Jan.-May). 
     
    The brick and mortar closure of five weeks from March 16 to April 19 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 only declined -65 percent during the five weeks closure in Germany. On the other hand, France declined -88%, Spain -87%, and Italy -86% during their respective store closure period. 
     
    Before and After March 15
     
    Up to week 11 (March 15, 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. The online channel showed a +14 percent growth, while brick and mortar, which represents 84 percent of the value sales recorded a -3 percent result.
     
    During the closure of the majority of the brick and mortar stores (March 16 – April 19, 2020), the market changed its dynamics. E-commerce climbed up to almost 60 percent 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 total Beauty.  
     
    “While e-commerce is growing at a higher rate within both channels, it only accounted for 18 percent of the German prestige beauty market before the brick and mortar closure,” said Samantha Grand, director of beauty prestige Germany at The NPD Group. “We still observe a higher weight of e-commerce sales in the beauty industry even five weeks after re-opening of brick and mortar.”
     
    “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,” Grand concluded.
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