What happens to unsold beauty products?
Elizabeth Rust investigates the fate of the countless beauty products left unsold in the wake of the COVID-19 pandemic.
When the UK government imposed the first lockdown in March 2020, Gareth McKeever had a bit of a problem. What was he going to do with all the shower gel and hard soaps he made to supply hotels in the Lake District? Not wanting to bin them, he ended up donating them to Manna House homeless shelter in nearby Kendal.
Gareth, along with his wife Claire, is the owner of Pure Lakes, an artisan handmade natural skincare company. In a small manufacturing workshop, they make all of their creams, soaps, and therapeutics to order, which is why they were able to quickly adapt to the closing of the hospitality industry. “Unlike big beauty brands, we don’t have hundreds of thousands of products waiting to be sold. We only make what is ordered,” Gareth says.
But what about big billion-pound beauty brands, such as L’Oreal, that supply the shop shelves and hairdressers that closed overnight because of the COVID-19 pandemic? Within their 2020 annual results, L’Oreal disclosed that for their Western European geographic zone, sales were down by 10.3% with makeup and sun protection products hit particularly hard, while the UK’s Office for National Statistics reported that the non-food sector has been the hardest hit by restrictions, with January 2021 seeing a decline in sales of 24.4% when compared to December 2020 when nationwide restrictions of non-essential retail were re-introduced.
Yet while online sales have remained strong, as Zoom calls became the new office, and people turned to the Internet to buy their lengthening mascara and red lipstick, it still hasn’t made up for the loss of brick and mortar sales. So how do big cosmetic brands adapt, and what happens to all those rows of rainbow eyeshadow palettes that once crowded the shelves?
"L’Oreal claims that because they are one of the world’s largest beauty companies, they can balance unsold stock between countries"
Sarah Cross, co-owner of the makeup brand CODE Beautiful along with her sister Emma, believes that big beauty brands are seeing a loss in sales because their businesses are built on a low-cost, high-volume model. Cross who lives in Wales with her four-year-old daughter has seen an increase in her makeup sales since lockdown, which she says is down to having a very direct relationship with her customers. “If you email a big beauty brand, you’ll probably get a standard corporate response. If you email us we’ll reply in a couple of hours with an honest answer,” she says.
“Our brand philosophy has always been about creating products that our customers ask for in the way that they want them. We only have a handful of skews that are makeup essential, like our Lid Lift Enhance that solves the problem of tired-looking eyes,” she says. Over the next year, she’s planning to slowly release six products that she says her customers have specifically asked for.
Retail analyst Heather Ibberson at EDITED, the retail market intelligence company, would agree that small beauty brands often have a stronger connection to their customer. Successful small beauty bands—she gives the example of skincare brand Summer Fridays that launched with their Jet Lag Mask cream—focus on “one hero product” and then slowly build up their range.
This is perhaps why Christina French and Jenny O’Neil, owners of Essench, have struggled to find a place in the marketplace for the CBD skincare range they launched in August 2020. With stores shut, and shelf space limited as stores tried to shift the products that they already had, they’ve now decided to turn to the Internet to develop Essench’s online customer. Luckily, Christina says that because their creams are made in small batches, they don’t have a “ton of stock”, but she has been known to donate pots of cream to a man in her Kingshurst village with motor neuron disease.
"Small beauty brands often have a stronger connection to their customer"
Yet despite losses, Ibberson says L’Oreal, which owns a slew of popular makeup brands like Maybelline, Lancom, and Kiehl’s, are still at the forefront of digital advances, particularly with the introduction of augmented reality makeup filters on Instagram, Snapchat, and Pinterest. “But as with any new technology, the customer needs time to become familiar with using these tools as part of their daily lives, which may take some time,” she says.
So does that mean makeup is sitting in warehouses just waiting to be sold? Unlike leather bags or belts, makeup does have a shelf life, which according to the Cosmetic, Toiletry, and Perfumery Association, is about 30 months unless it has a "Best Before" date. Unopened makeup generally lasts a long time, especially if it’s stored under suitable conditions and not subjected to extreme temperatures.
L’Oreal claims that because they are one of the world’s largest beauty companies, they can balance unsold stock between countries. In the UK, the stock is centralised and managed according to market needs, including getting rid of old stock through promotions like buy-one-get-one-half price. Then there’s also the charitable sector. Any unsold beauty products are also donated to the redistribution charity In Kind Direct where L’oreal’s products have been disturbed to 1,400 charitable organisations in 2020, places like schools, social enterprises, and community groups.
And while it has been speculated that unsold beauty products have been destroyed or sent to landfill past, there’s also a very elusive wholesale sector where unsold beauty products are sold on to another company. Any eagle-eyed internet searcher will be able to get their hands on discontinued beauty ranges on eBay, Amazon, or third-party retail websites at much lower prices than they originally sold for. Discontinued popular products like Maybelline Kissing Koolers or Revlon ColourBurst lipstick may no longer be on the shelves, but it’s not difficult to find them online.
Websites like BuyMeBeauty in the US specalise in selling discontinued or hard-to-find makeup which it buys from manufacturers or wholesale distributors, such as Cover Girl blush selling on their website for $3.99 when a comparable product can be bought for $5.99 in-store or Essie nail polish at $5.99 when it can be bought for $8.99 in-store, albeit in previous season’s colours and packaging. In the UK, websites like HighStreetBrands4Less buy beauty products wholesale and then sell them on to their customers. Owner Steve Penistone explains that there are a large number of wholesalers in the UK. His job is to then understand what’s popular from last season’s range and buy it for his customers so that they can still get the product.
"There’s an elusive wholesale sector where unsold beauty products are sold on to other companies"
“We have customers who buy certain product lines on a regular basis because they can’t get them in the shops anymore. We also have customers who simply don’t want to pay the car parking charge for going to the high street. We then have international customers who can’t get the products domestically, think our price is competitive, buy ours, and then sell it in their own country,” he says.
Still, Steve expects that even though people aren’t going to the office, and demand for beauty products may have dropped, this will be a relatively short-term phenomenon. He’s optimistic about the future. He may also be able to get his hands on some real bargains for his customers when it comes to the unsold beauty products of COVID-19.
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