Irish consumers were spending €2.6 billion on hair and beauty treatments before the Covid pandemic upended the sector, according to a report commissioned by the Hair and Beauty Industry Confederation of Ireland. Close to half of that was on hair, skin and cosmetic products with the balance on the services of hairdressers and beauty therapists.
Those in the industry will tell you that the pandemic has since led a ramp-up in beauty spending, in particular on skincare, as consumers with ample time at home to develop beauty routines were confronted with their own faces on regular Zoom calls.
Covid also brought radical changes to the Irish retail landscape in terms of how we shop. The world of online beauty retail is now a booming sector, and those in the beauty business are investing heavily in their online offerings.
A report by consulting firm McKinsey and Company, which puts the value of the global beauty market at $430 billion (€393.2 billion), says the value of ecommerce in beauty nearly quadrupled between 2015 and 2022. And it is expected to grow by 12 per cent annually out to 2027 (twice as fast as the 6 per cent growth predicted for the overall industry).
Joann Mahon is founder and managing director of Millies.ie, one of the biggest Irish-owned online beauty sites, which specialises in premium and salon-quality brands.
Mahon first set up a website in 2013 to promote her small salon business in Kildare but over the years the online side of her business has overtaken everything else, in particular since the pandemic. Accounts for Millies Beauty Limited show that the company made a profit of €450,451 in 2019. By the end of 2022, that had more than doubled to €942,491.
“Maybe five years ago is really when I gave my attention to the online space,” Mahon tells The Irish Times. At the time, her salon business was consistently operating at almost full capacity and the only real avenue for growth was through online sale of beauty products.
“I invested more in a warehouse, a new warehouse system and a management team that actually could build that side of the business. We spent a good two years really perfecting that. Then, unfortunately, Covid hit but it had a really strong and positive effect for us,” she said.
Millies saw a “completely different scale of growth” during the pandemic, with revenues tripling and staff numbers doubling to about 50 to cater to demand. There were just under four million visitors to the site last year.
Mahon said younger Gen Z shoppers are driving growth across most categories but she said the business has also seen surprising growth among customers aged over 45, who have taken to shopping more online since the pandemic.
With the expansion of the online consumer market, Mahon said the space has become increasingly competitive, with big UK players entering the Irish market, bringing with them aggressive pricing and marketing.
“In the Irish landscape, it’s very, very competitive with UK players – Lookfantastic, for example. They’re absolutely global, they’re giants. They’re value driven, they’re very focused on the Irish market, and they’re very aggressive on their spend for ads. It can be a big challenge to compete in that space with the biggest online retailers,” she said.
“I definitely feel the bigger players are so aggressive in the space for a reason. It’s a growing market, it absolutely is,” she added.
As ecommerce beauty retailers are raising competition and cutting prices in the online space, department store beauty halls have had to adapt to hold on to custom from shoppers who now expect an “omnichannel” experience – being able to browse products online or in-store interchangeably.
Triona McGinley, beauty director at Brown Thomas Arnotts, says that about 20 per cent of sales across the two department store brands now happen online. She also references a “spike” since the pandemic.
The group reported total turnover of €319.3 million last year, with accounts noting increased investment in its digital offering. Earlier this year, chief executive Donald McDonald said Brown Thomas Arnotts’ digital business is now trading at three times the level it was in 2019.
McGinley says a “huge proportion” of their customers now shop on multiple channels. And when shoppers embrace both online and in-store shopping, their “spending increases significantly”, she says.
“Omnichannel is a 360-degree approach to what the customer is looking for, and when you have a customer who’s omnichannel, they’re more likely to shop more often,” she said.
McGinley said Brown Thomas Arnotts has put a lot of strategic investment into both its website, which originally launched in 2013, and its recently launched app – with the group seeing 33 million visitors across both platforms last year.
“Online is very important, it is your shop window. Our phones have become shop windows as well when people are scrolling on the app. It took a lot of investment to make [them] customer centric,” she said.
McGinley is speaking in the group’s Planet Beauty store on Clarendon Street, a separate building to the neighbouring Brown Thomas beauty hall on Grafton Street. First launched two years ago in Dundrum, the Planet Beauty concept is a direct result of the rapidly changing demands of online beauty trends, and how “online-first” customers like to shop.
Rather than traditional beauty hall concession stands of legacy brands, Planet Beauty shelves are stocked with up-and-coming Irish brands and selected trending products that can be quickly swapped around to reflect what is going viral online.
“One of the main reasons behind Planet Beauty was to have the ability to on-trend and off-trend. It’s where we can quickly turn on and deliver products to our customers who have been suddenly sparked by waves of TikTok content and influencer endorsements,” she said, adding that her buying team are “always on” to try to get ahead of the latest trends.
McGinley said the store caters to typically younger “digital native” customers who come into stores “armed with screenshots of viral products they discovered online”.
“That younger generation, they just know exactly what they’re looking for, and they might go straight to online to purchase it, or they might have heard about something and just want a little bit more education in store. Planet Beauty has been so important to us because it makes sure that we are the destination, whether it’s online or in stores,” she said.
The pharmacy sector is also embracing the omnichannel approach to selling beauty products. Oonagh O’Hagan, founder and managing director of Meaghers Pharmacy Group, says that anywhere up to 40 per cent of their total sales can come from selling beauty products online.
“When it comes to online beauty, it could be 20 to 25 per cent [of business], but at certain seasonal times, or if we put a big focus on a particular online campaign, it could go as high as 30 or 40 per cent,” she said.
O’Hagan bought her first Baggot Street pharmacy in 2001 and now operates 10 pharmacies across Dublin as well as their online platform, with total annual turnover of about €30 million.
In 2022 when the overall pharmacy group reported a turnover of €22.64 million and a profit for the year of €40,177, its subsidiary Meagher’s Pharmacy Online Sales Limited recorded a profit of €585,525.
Meaghers first ventured into the online world in 2014 when it launched a click-and-collect option from pharmacies. After only a few months this evolved to a fully transactional online store.
O’Hagan says they saw online business triple during the pandemic when they moved all non-essential retail to their website, and they had to double the size of their warehouse to cater to demand.
“Our online sales absolutely blew through the roof. It was the right thing to do at the time, but it was a logistical nightmare. It was a real challenge to keep everyone safe in the warehouse, and we were pretty much going through the night to get our orders out safely,” she said.
“I’m really so glad that we did do that, because it was the right thing to do for our customers and for our teams, and it really allowed us to test the water as well with online to see what opportunity there was out there,” she added.
O’Hagan says the online store has been a means to vastly expand the business’s customer base without having to invest in bricks and mortar.
“We are Dublin based, but what the online business has enabled us to do is to look after customers the length and breadth of Ireland without having a physical presence there. And now we’re shipping to 70 different countries all over the world,” she said, noting she has repeat customers everywhere from San Francisco to Abu Dhabi.
However, there can be dangers associated with beauty products sold online, O’Hagan notes, particularly when teens and even younger children can access products not suitable for them.
“We see so many young girls from the age of 10 or even younger choosing products that have active ingredients, acids and retinoids in them, because they’re hot on TikTok,” she says. “They’re ruining their skin barrier and they’re causing chemical burns.” Companies that operate online only might not see the customer coming in with the burns, she says, “but we have the mums coming in to us saying little Mary bought this product, can you do something to help her”.
“It’s really important for us as a pharmacy brand to be cognisant of the trends that are on platforms like TikTok, which are just not correct. At the end of the day, yes we’re in retail, but we have a responsibility as a pharmacy business to be a voice in all of that and make sure that we have responsible selling as well,” she added.
While the forced move to the online world during the pandemic led to that initial boost for Meaghers’ online beauty offering, O’Hagan says they are continually investing in that side of the business to retain those shoppers, including rolling out same-day delivery in Dublin recently.
Everyone we spoke to cited AI and augmented reality as key focuses for future investment and innovation, and Meaghers is no different. O’Hagan said AI has the potential to help improve the experience of shopping for beauty products online, and tackle the shortfalls of not being able to test products in person or get more information from staff.
“That’s one negative, I suppose, with online. For example, how do you know what colour to use when it comes to your foundation?” she said, adding that brands are already using AI to provide colour matching and other services.
Meaghers currently uses AI as part of its online customer service and is testing out other platforms to help replicate the in-store experience, O’Hagan says.
“I think absolutely [online beauty retail] will continue to grow and I think the brands that will really get this right are the brands that start to think about how you solve the problems of online; they’re the brands to watch for sure,” she said.
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