Updated: Oct 4, 2022
Like many industries, the beauty industry was hit hard at the start of the COVID-19 pandemic. Stores closed, and brands switched to manufacturing hand sanitizer and cleaning products (Gerstell et al., 2020).
The beauty industry is a 500 billion dollar a year industry employing millions of people. Its survival is vital to the economy and the livelihoods of many. Prior to the pandemic in-store purchases were at a 85 percent high and then with the onset of the pandemic some 30 percent of stores closed, and some will likely never reopen. What’s worse is that revenues dropped 20 to 30 percent in 2020.
This pandemic has hit the industry harder than it was hit in the great recession. Yet, there are some signs of resiliency. Online purchases are up and do-it -yourself beauty products are making a big hit, but online sales are not offsetting the decline of in-store purchases, and stores that are selling beauty products are seeing a marked drop in sales.
So, what can a manufacturer do to encourage sales?
CSR And Value Sharing
Some manufacturers offered free beauty services to front line first responders implementing their Corporate Social Responsibility (CSR) during the onset of the pandemic, but it is simply not enough to offset the gap between a society that is suffering and the power and influence of a manufacturer.
To regain the ground they lost, manufacturers would benefit from the concept of value sharing for their CSR strategy. According to this concept, it is up to manufacturers to bring business and society together instead of working against each other.
When the society hurts so too does the manufacturer. Through value sharing a manufacturer can help to heal a society in the throes of a pandemic and heal itself at the same time.
For years companies have been perceived as profit mongers at the expense of the environment and society. What makes it worse is CSR can reinforce the negative views society has about businesses because in the past some companies have skirted the issues and have only done what is necessary to alleviate social pressure.
Manufacturers must first reevaluate their CSR strategy to see where they are skirting the issues. What they should do instead is embrace society and work with it and not against it.
Manufacturers must create economic value while at the same time create value for society.
Manufacturers must reconnect with society while it is in the throes of this pandemic.
CSR currently is used to maintain one's reputation, but now companies have to dig deeper and get below the surface. Shared value is about expanding CSR, taking it a step further, and merging with society instead of remaining just on its perimeter.
The author's Porter and Kramer use farming as an example. It is more than just increasing a farmer’s wage to improve fair trade; it's about providing resources to help farmers improve their growth and strengthen “the local cluster of supporting suppliers and other institutions to increase farmers' efficiency, yields, product quality, and sustainability. These types of actions lead to more revenue and benefit both for farmers and the companies that buy from them” (Porter & Kramer, 2011, p. 5).
There are three concepts a manufacturer can utilize to expand their CSR and increase value sharing.
Manufacturers should invest in products that are reasonably priced, organic, and safe for the environment and the skin.
Demands for this type of product are growing. Also, heavy make-up and masks do not mix, but shoppers still want to pamper themselves. Keeping prices low and advertising it could help with purchase intention.
Energy efficiency and cutting back on the use of plastics will have a positive impact on society.
Treating the employee as an asset instead of a liability improves productivity and keeps the employee employed, so cutting costs by doing away with health insurance is not a move in the right direction.
The Fluctuating cycle between manufacturers and society will be reinforced with purpose and create a whole new meaning regarding capitalism where both a company and society can prosper if and only if a manufacturer employs value sharing
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