Suppliers feel effects of the COVID economy

Photo by Atikah Akhtar on Unsplash

Several South African skincare suppliers report that the second wave of COVID-19, which hit in December, has had a serious effect on demand from salons and spas.

According to RégimA distributors, regular clients are now choosing either salon treatments or product purchases, but not both. Because clients are extremely nervous to enter salon spaces (in shopping malls particularly), despite all COVID protocols being in place, the demand for in-salon treatments has dropped.

Says one distributor: “Clients are now buying only the basics of skincare. There is a continuous flow of new business, but these new salons have replaced the salons that have closed. Smaller home salons are busier as clients are more confident going into a private space for their treatments.

“We have seen the re-emergence of parallel markets in a different form, namely, some salons and product manufacturers entering what could broadly be considered ‘the retail space’, while others remain in the professional space.”

Another RégimA distributor notes that some salons are struggling, with their businesses now halved. “Home salons are recovering slowly but larger clinics in malls have to deal with high rent.”

During the second wave, RégimA observed a sharp increase in customer queries related to things that would normally be resolved in discussions with their therapist. “So the separation of customer and therapist has had a markedly deleterious effect on levels of knowledge and awareness of customers in general.”

After the first wave of COVID, Exclusive Beauty Solutions (EBS) saw a steady increase in sales, but when the second wave hit, although salons were still operational, there was no increase in sales.

Says EBS’ Dalize Havenga: “Sales just flat-lined. Salons said they had lost customers to immigration and financial restraints. EBS is launching a new Anesi product in these trying times, and the response to the online launch has been very positive. We are all trying to stay as positive as possible and keeping our businesses afloat as best we can, hoping for an increase in sales and new salons following the announcement of Level 1 restrictions.”

The basics

Julia Leeson, trade marketing manager of Environ Distribution SA, reveals that the retail side of the business, although slow, has started to see a turnaround. She continues: “We have noticed that the main volume movers are the essential skincare products, so salons are selling more of the basics than specialised skincare and the customer is cutting back on non-essential products.

“It’s the professional side of our business that has been the hardest hit. With the drop in salon treatments, the need to replenish professional products has reduced. The last few months in the second wave have been no different to when we first entered this unchartered territory.”

Leeson notes that the trade Environ supplies to has been surprisingly positive despite the hardship. “We have found that as a supplier, our relationships have been solidified and deepened with our stockists and we continue to make the necessary adjustments and pave a new path without deviating from our core values and ethos of what we believe premium skincare should look like.”

Tough January

Marisa Dimitriadis of SIX Skincare and Spalicious reports that December 2020 was, surprisingly, excellent. “We had a 20% growth on December 2019 and even opened new accounts, which is not the norm for year end. However, in January the wheels fell off completely. It was as if the industry disappeared. We did 50% of 2020 January revenue. Our hotel spas did not order one single item.