All things considered, the beauty industry was remarkably resilient during COVID-19, led mostly by digitally-born indie brands. ‘These companies,’ said Vennette Ho, Managing Director of Financo Raymond James, ‘were set up to take advantage of abnormally low customer acquisition costs from March 2020 to May 2020, while many traditional companies hunkered down and focused on preserving cash.’ Here, Vennette speaks to Beauty News about how indie brands fared in one of the most challenging years in recent history, how self-care inspired a nation, and how M&A looks to come out of a pandemic.
CEW Beauty News: How did Indie beauty fare in 2020, and what aspect of a pandemic made it fairly resilient?
Vennette Ho: I think that, overall, beauty fared better than expected because the industry, at its core, is centered around self-care and feeling good. With all of the pressure that came with the pandemic, it compelled many consumers to try to take better care of themselves and find little affordable joys – and beauty accomplishes both. This time was a time of discovery for a number of brands in DIY categories (nail, skin care devices, at-home hair color) to hair care, skin care, wellness and yes, even color cosmetics. And we are now seeing that it wasn’t just a COVID-bump – instead, it was a huge springboard for awareness and building a strong and loyal customer base.
BN: How were indies challenged by supply chain restrictions?
VH: Supply chain limitations impacted businesses across the board and was a top concern for all brands – big and small – in 2020. It caused companies to get creative and resourceful and to think more about how to set up a more reliable and sustainable supply chain for the future.
BN: What about the rise of Black-owned and Asian brands over the past 17 months, as a result of social unrest and injustice?
VH: Amazing Black-owned and Asian-owned brands have always been a key part of the beauty industry but often did not have visibility. Representation needs to span across all vectors of our industry – from representation in leadership and board rooms to representation in stores. Initiatives such as the 15% Pledge are a great start, but more work needs to be done.
BN: What was Indie beauty M&A like during the time period?
VH: M&A has come roaring back, for sure. The past year has only further demonstrated to strategics the relevance and enduring strength of Indies and their unique customer propositions. Meanwhile, private equity and venture capital investors have seen that this is an industry that is incredibly resilient even during the most difficult of times. We expect to see a number of exciting transactions getting done soon.
As the sponsor of the Indie Brand categories at this year’s CEW Beauty Creators Awards, Financo Raymond James will participate in CEW’s July 13 Beauty Creators Finalists Reveal, where for the first time an entire (virtual) event will be dedicated to sharing this year’s Finalists in 29 categories. Join the beauty industry next month for the Finalists reveal, and to hear from industry experts about 2020’s highlights, including an indie brand spotlight from Financo Raymond James. Click here to register for the event.