British retailers face bleak Black Friday as consumers sacrifice skincare purchases and shop internationally

25 Nov 2022 --- E-commerce solutions provider Global-e has warned British retailers to expect an underwhelming Black Friday today after its research found nearly half (48%) of UK consumers are shopping online from international retailers to find better deals in the US and China. Meanwhile, research from Beauty Daily by Clarins reveals that women in the UK are ditching skincare products due to the cost-of-living crisis.

PersonalCareInsights speaks to Ouli’s Ointment and LastObject to get a retail and business perspective on how these economic hurdles can be navigated.

The survey by Clarins on 2,000 British women found that facemasks are the first product they would discard if money were tight, followed by perfume and facial exfoliators.

On the other hand, the survey by Global-e on 9,000 global consumers found that almost half of British consumers shop online outside the UK as it is cheaper than local shopping.

Beauty cuts
Clarins also reveals that British women are likely to remove skincare from their makeup routines when concerned about finances.

In descending order, face masks, perfume, face exfoliators, toner, face serum, eye cream, cleanser, primer, body exfoliator and lip balm all made the top ten products female consumers would stop purchasing.

However, 92% of Brits revealed they would consider more affordable beauty alternatives before eradicating products from their beauty routine.Nearly 50% of UK consumers are shopping online from international retailers to find better deals from the US and China.

For makeup products with no cheaper alternatives, only 12% said they would find affordable options for contour products, 13% for lashes and 14% for lip liner – showing female consumers are more likely to cut down costs on skincare over makeup.

Despite the surprising intention to give up skincare, Brits still consider a facial moisturizer an essential component in a beauty routine, with 83% saying they can not live without it.

Due to the rising costs credited to inflation and rising gas prices, 93% of the respondents expressed concern about its impact on their quality of life. However, if money was not an issue, 57% of women said fragrance would become an essential part of their beauty routine.

Searching for affordable brands
Meanwhile, the rise in living costs is also driving British consumers to look abroad this Black Friday for better deals. 

Affordability was marked as the top reason for conducting the international search – “slightly higher than the global average (47%),” shares Global-e.

Additionally, for the UK respondents to the survey, affordability was followed by whether brands had a wide variety of products (33%) and offered low shipping costs (28%).

On the other hand, expensive shipping (59%) and a long or expensive delivery time (43%) were the top reasons for Brits to abandon a cart when shopping internationally, continues the company.

Of the products purchased online, the most popular category is clothes, shoes and accessories, at 74% for UK shoppers and 61% globally. This is followed by health and beauty at 29% for UK shoppers and 30% globally.For the UK respondents to Global-e, affordability was followed by whether brands had a wide variety of products and offered low shipping costs.

Nir Debbi, co-founder and president at Global-e says: “Amid the cost of living crisis, it is unsurprising that many consumers around the world are looking for affordable alternatives online and looking to international markets to make some of these purchases.”

E-commerce across nine markets revealed that the UK was the third (25%) most popular market for global consumers to purchase from, following the US (46%) and China (42%).

Meanwhile, among UK shoppers, China (57%) and the US (47%) are the most popular markets for cross-border shopping, followed by Germany (11%), Spain (10%) and France (9%).”

Retail and business perspectives
As a reasonably new brand, Stephanie G-M, CEO at Ouli’s Ointment, tells us that it was scary to see the wholesale decline during the COVID-19 pandemic and then “shift massively this year.”

“So far, we’ve had to increase our prices and offer fewer sales but better and more creative offerings, especially with small stock-keeping units. The key takeaway is to listen to my customers and stick to what sells best as we move forward,” she says.

“We are on good ground seeing as our products are multi-use and aim to eliminate the need for a lot of products because people want to buy less.”

Moreover, a recent report highlighted that the beauty industry is expected to “shift radically” toward self-care rather than luxury as producers feel unprecedented inflationary pressures from a post-pandemic economy, the Ukraine conflict and ensuing supply chain impacts.

Kristian Jørgensen, CEO at Lastobject, a Danish-based brand, also discusses how inflation has affected his business.

“We are seeing two effects. The first, higher prices from our suppliers, for example, one product, was increased by 10%. This leaves us with a choice of either operating with lower margins or increasing the product’s price. For now, we decided to stick with our price on that product, but that may change in the future.”

“Secondly, the general fear in the market that a recession may come as a result of increasing the interest rates and slowing down the economy means that some retailers are more risk-averse and less likely to take in new brands at the moment,” she continues.

The company is maintaining operations by operating a leaner business focused on sales rather than long-term product development.

“The best advice is to ensure you have enough cash to withstand the ebbs and flows. There will always be good times and bad times. The important thing is to make sure you adjust your business and your cost base to make it through the bad times, so you’re still around for when the good times come back,” suggests Jørgensen.

Globally, inflation is high, with companies facing increasing expenses via wages, electricity and supplies. Clarins reveals that British women are also likely to remove skincare from their routines over makeup when concerned about finance.

In recognition of the struggle, Chatler Parfume previously shared five tips on combating inflation, Vagaro offered tools to benefit small businesses and ICSC shared insight into consumer shopping predictions.

Social media influences
Global-e also notes that social media channels influence international sales, with 46% of British consumers purchasing from a global brand after coming across it on social media.

These consumers are most influenced to buy from Instagram (58%), Facebook/Meta (42%) and TikTok (32%).

“More than half of those aged 16 to 24 cite TikTok (69%) as the most popular platform to discover brands on, with Instagram (55%) coming in second. While older platforms like Instagram and Facebook come out on top for the older age groups, 27% of 35 to 44-year-olds have purchased because they engaged with the brand on TikTok, showing it isn’t only the youngest demographic that brands can reach on the platform,” shares Global-e.

Furthermore, 62% of Brits prefer to shop directly from brands’ websites, compared to 33% who prefer shopping on a marketplace.

By Venya Patel