Sanitizers, Cleansers, and 'Clean Products'

• As Canadian officials warned against false advertisement promoting that skincare and cosmetic products prevent the spread of COVID-19, skincare and beauty companies have began advertising sanitizers, cleansers, and clean products. 
• The front page of one of Canada's largest skincare companies, Constant Skincare, displays hygiene kits, skin-boosting serums, and boxes of soap.
• The latest issue of Canada's largest cosmetic magazine is titled the Clean Beauty Issue, and defines clean beauty as products that are 100% natural and free of toxins.
•  Sephora which is an international company that has a large presence in Canada, provides a 'Clean at Sephora' label on products, that meet the standards of clean beauty. Three of the four best-selling skin products meet the 'Clean at Sephora' requirements.
• Canadian skincare company Saje Natural Wellness is promoting a natural home cleaning kit on their front page, and skincare and body care products are listed behind diffusers, diffuser blends, and essential oil remedies.

Hydration and Maintence

• Hydration and maintenance products have become much higher trending as compared to make-up and other products to cover blemishes.
• A worldwide trend, which is also popular in Canada, contains coconut oil in hydration products, which are also infused with other natural ingredients). This trend originated from Southeast Asia, who recommends coconut oil infused with coffee grounds.  
• Coconut oil hydration kits have an extremely high popularity rating worldwide, as a product from House of Beauty (which is sold in Canada), has recently had over 18,000 reviews and the average score is 4.5 out of 5 stars.
• Along with free shipping (or shipping at a reduced price), Constant Skincare offers consumers a free hydration facial masks in addition with any order over $50.

Efficiency and Global Awareness

• With the slogan of the ability to fit three months of makeup in the palm of one's hand, Langmuir, who was the prior founder of the major Canadian-based cosmetic company BITE, left the company to pursue the creation of a clean skincare product that promotes efficiency. Langmuir began designing the product in late 2019, however it wasn't released until recently and is gaining popularity throughout Canada. The COVID-19 outbreak is personal for Langmuir, who was diagnosed with an autoimmune-deficiency disease; thus it can be expected her products in the future will center around cleanliness and efficiency.
• As COVID-19 is a global issue, consumers are becoming more aware of the damage their products have at a global level, thus trends towards refillable cosmetics have become popular in Canada. Refillable cosmetics allow consumers to order refills of their product in plastic containers, and use special equipment to refill the initial cosmetic kit.
• Many cosmetic and skincare companies have become partnered with TerraCycle (which is a Canadian recycling company), in an effort to develop cosmetic containers that can be easily recyclable.

Summary

• Following advise from Canadian officials, skincare and cosmetic companies in every region are closing their stores across the country. Consumers are advised to stay at home not only from officials and industries, but also celebrities such as Prince Henry and Meghan (who are self-isolating in Canada).

• Many cosmetic companies are offering free or discounted shipping, and curbside pickup. 

• Due to the fact that no skincare and cosmetic products protect against COVID-19, industries in the sector have began promoting sanitizers and cleansers (in which the majority are not skincare products).
• With the addition of sanitizers, cleansers, and clean products; products that moisturize and maintain skin are becoming more popular as compared to highlighter and other products that intentionally change appearances. The most popular of these are clean products, which are free of toxins and are completely natural.
• Partly due to global awareness from COVID-19, products are based around efficiency and global sustainability.

Food Delivery Demand Increases

• As restaurants are forced to operate as take out or delivery only, and people are self-isolating in their homes, food delivery is increasing and adapting as a way to support businesses and serve people's need to receive food without going out themselves. Services providing meal delivery include Uber Eats, DoorDash, SkipTheDishes, and Foodora.
• Food delivery services allow people to order from restaurants online, and have food delivered in their homes, via an app. Since the beginning of the COVID-19 outbreak, 4% of Canadians are using food delivery services more often. Sylvain Charlebois, professor of food distribution and policy at Dalhousie University, believes more people will use food delivery as the COVID-19 situation continues.
•  Uber Eats is waiving delivery fees in Canada and the U.S. for independent restaurants in an effort to help small business owners and increase food orders from small businesses. Customers should look for the app's EAT LOCAL banner.
•  Grocery stores are seeing an increase in their home delivery services as well as more people self-isolate. These services may be through the stores themselves, such as Walmart and Costco, or through independent delivery services, such as Instacart, PC Express, and Inabuggy.

Food Delivery and Grocery Stores Increased Safety Measures

• To help keep delivery drivers and customers safe, customers can now request contactless delivery from many food delivery services, including DoorDash, Foodora, and Uber Eats. SkipTheDishes has made contactless delivery mandatory. This allows delivery drivers to leave food at the customer's front door without interacting with the customer directly, in an effort to limit possible exposure to COVID-19.
• Companies and customers are using cashless payments more frequently to reduce the spread of COVID-19 caused from the exchange physical cash exchanges. SkipTheDishes no longer accepts cash payments.
• Grocery stores are increasing sanitation processes, especially in areas such as checkouts, cooler doors, and pharmacy counters to mitigate the spread of COVID-19. Safeway is taking measures to keep employees and customers safe, including: reduced open hours, canceling product demos, requiring employees to wash hands every 15 minutes, adding floor markers to checkout lines to ensure safe distance between customers, closing unstaffed self-service and bulk food areas, opening stores to seniors one hour prior to official opening times, and installing Plexiglass cashier shields.
• In addition to Safeway, Walmart is another store offering early shopping hours to seniors and people more vulnerable to COVID-19.

Grocery Stores Rationing

• Some stores are rationing high demand items, such as hand sanitizer, due to customer panic buying, in an effort to counteract running out of certain products.
• Canadian grocery store Loblaw is limiting certain items, like toilet paper, and is informing online delivery customers that there may be more substitutions in orders depending on product availability.
•  Sobeys Belmont reserved 50% of new stock for seniors "after people had previously cleared out shelves and stockpiled packages with little concern for those more vulnerable."

Lin Qingxuan

•  Lin Qingxuan is a cosmetics company that was founded in Shanghai in 2003. The company creates natural cosmetics by using "Chinese herbs as raw materials." It has over 300 retail stores and more than 2,000 employees.
• Lin Qingxuan had to close 40 percent of its stores because of COVID-19.
• Lin Qingxuan's sales would reach a million during the Chinese New Year but due to "travel restrictions and limited supplies," Lin Qingxuan's stores that were open didn't receive many customers, which resulted in sales declining by 90 percent.
• To combat this revenue loss, more than 100 of Lin Qingxuan's beauty advisors became online influencers. They used social media platforms, such as WeChat, to interact and engage with customers.
• Lin Qingxuan live-streamed sessions on Valentine's Day, which gained 60,000 viewers. As a result, 400,000 bottles of camellia oil was sold.
• Overall, Lin Qingxuan's "sales in Wuhan achieved 200 percent growth compared to the prior year’s sales."

Coty

•  Coty is a beauty company that has a portfolio of 70 brands focusing on cosmetics, hair color and styling, skin and body care, and fragrances. CoverGirl, Burberry, and Rimmel London are some of the brands owned by Coty.
• Coty's revenue by the third quarter of 2019 was $1.99 billion. However, the company now predicts "its net revenues for the third quarter" of 2020 to decrease by 20 percent because of COVID-19. As for a specific revenue loss, Coty CEO Pierre Laubies said it's way too early "to quantify the effect of the virus on Coty’s business."
• Coty is temporarily closing one of its factories in the United Kingdom because of a decline in demand for products due to COVID-19.
• One of the ways Coty is combating revenue loss is by creating a "'global response team' that meets daily to 'actively monitor the situation very closely.'"
• Coty is also relying on e-commerce to boost its sales. The company said this strategy worked because its sales from the United States doubled on Amazon recently.

Chipotle — Food Delivery

• While Chipotle outlets have opted to remain open despite the outbreak, there has been a sharp drop in business amid coronavirus concerns, with just about every restaurant nationwide in the U.S. being hit hard.
• Chipotle's stock has dropped more than 41% "since the coronavirus-related sell-off began on Feb. 24."
• In order for them to combat revenue loss from the lack of patrons in their outlets, Chipotle has focused more on marketing the food delivery aspect of their business model. They have begun offering free delivery for orders of $10 or more.
• To allay customers' fears about delivery workers tampering with their food, Chipotle is also using a new tamper-evident packaging seal. This will make sure that customers know that their meals have not been tampered with during the delivery process.
• They are also willing "to accommodate customers who do not want to get out of their cars to pick up their food by offering them Chipotlanes, which are drive-thru lanes available in select locations for digital orders only."
• As part of its new marketing strategy, Chipotle has expanded its free delivery service with a new Uber Eats partnership.
• Chipotle has seen its digital sales soar when they partnered with DoorDash in 2018. Should past results be any indicator of success, Chipotle can look forward to and expect dividends from this new partnership. However, because new strategies adopted by Chipotle are multi-pronged and still relatively new, whether these strategies would work in the long run still remains to be seen.

Chinese Restaurants — Food Delivery

• Despite there being no evidence of COVID-19 affecting the Chinese population in New York City than any other ethnic groups, Chinese restaurants are feeling the full brunt of the commercial impacts of COVID-19.
• As a result, businesses in Chinatowns across the U.S. have dropped up to 70%, with restaurants that are used to have bustling with customers such as the New Golden Gate Seafood Restaurant being practically empty in recent times.
• Haidilao, a popular Chinese chain hotpot restaurant recently launched a hotpot delivery service in New York just three weeks ago.
• Because the substantial decline in business has made launching delivery services more urgent, Haidilao partnered with the third-party platform, Hungry Panda, an app that targets mainly the Chinese demographic in America, as well as another similar delivery company, Chowbus.
• Da Long Yi Hot Pot, another Chinese restaurant, has witnessed a 50% drop in revenue ever since the news of COVID-19 broke. They have also recently launched a lunch delivery service in February. According to the owner, Chen Ze, this strategy adopted by this restaurant has been successful, with the lunch delivery service being "popular with white-collar workers in Manhattan, with 40 to 50 orders each day."

RESEARCH STRATEGY

Crescita Therapeutics

• On March 24, Crescita Therapeutics, a commercial dermatology company based in Canada, announced that it will be temporarily closing its office and production facility in Quebec in accordance with the mandate of the Quebec government to shut down all non-essential businesses in the province.
• Product sales are down for the company as most of its clients in the aesthetic and medical aesthetic markets in Canada have temporarily closed. The pandemic's effect on countries such as South Korea, China, and Malaysia has also led to a decrease in the international business of the company. The company is expecting to see lower royalties from international sales as demand drops and border restrictions are imposed.
• Crescita Therapeutics is implementing initiatives to mitigate this revenue loss and help the company's financial flexibility. One of these initiatives is to temporarily reduce the base salary or fee of members of the company's executive team, such as the CEO and CFO, as well as its Board of Directors by 25-40%.

Other Helpful Findings:

• To limit the spread of COVID-19, Lush, a beauty company with 258 retail outlets in the US and Canada, have closed all North American stores, canceled events and product demonstrations, and scaled down its manufacturing and distributing operations.
• Following the increased demand for cleaning and sanitizing supplies, Nezza Naturals, in partnership with Victoria Distillers, is producing hand sanitizers which will be distributed by the two companies for free to essential services staff such as doctors, nurses, bus drivers, and grocery store workers in Victoria, Canada. While they are currently focused on their local community, Nezza Naturals and Victoria Distillers are planning to make this initiative an ongoing project to expand their reach.

Research Strategy:

Labrador Gem Seafood

• Labrador Gem Seafood is a global seafood company based in Canada that is owned by Danny Dumaresque.
• In the wake of the COVID-19 crisis, the company lost Japan as its major market for sea food. This was caused by China's reduced importation of sea urchins from Japan.
• Japan imports sea urchins from different countries around the globe, an aspect that created an oversupply due to reduced demand from China.
• Labrador's strategy involved aggressively focusing on North America as its main market. The company sought to take advantage of the Seafood Expo North America, one of the world's largest shows for seafood, to increase their customers and spur demand in the Nother American market.
• However, this approach did not work as the Seafood Expo North America was canceled due to the COVID-19 pandemic. This implies that the company executives have to visit each individual company to generate new sales leads. This approach was both costly and time-consuming.

Ferrovia Ristorante

•  Ferrovia Ristorante is a diner owned by John Yuen that has been in business for 20 years. The company is located in Thornhill.
• Due to the pandemic, the government issued a directive to shut all diners and bars in a bid to contain the spread of the virus.
• As a result of closures, restaurants such as Ferrovia Ristorante are experiencing reduced sales revenue while costs such as rent continue to accrue. In Ferrovia Ristorante's case, the rent owed in April amounts to $12,000, excluding labor costs.
• To combat reduced sales revenue resulting from closures, Ferrovia Ristorante shifted to takeouts.
• However, takeouts as a strategy failed as the company managed to sell only $300 worth of food in a span of 3 days. According to Yuen, takeouts as a strategy was simply unsustainable thus forcing the diner to close down and lay off its workers.

Chinese Cuisine & Hospitality Association of Canada (CCHAC)

•  CCHAC is an association that represents the interests of Chinese restaurants in Canada. The association works with different stakeholders in a bid to promote Chinese cuisines and restaurants in Canada.

• In the wake of the current global pandemic, Chinese businesses have been hit the hardest by the crisis. This is due to rumors, misconceptions and misinformation spreading about China and the coronavirus outbreak. As a result, there is a huge stigma associated with Chinese businesses including restaurants.
• As a result of the discrimination and stigma associated with the pandemic, CCHAC reported that their members have experienced 30% to 80% reduction in sales volumes over the last few weeks.
• In order to combat this predicament, CCHAC applied a similar strategy to the one they applied during the SARS outbreak of 2003. The association organized a 2-week food festival to promote Asian restaurants across Canada.
• According to the CCHAC president, Catherine Hou, the festival was a huge success and managed to restore public confidence. Hou indicated that "one participating restaurant experienced $20,000 in one-day sales as a result of the Asian-themed restaurant festival. Another small-scale restaurant, sized under 3,000 square feet, had made some $15,000 in sales at the start of the festival on February 14."

From Brick And Mortar To Online

• In an attempt to slow the spread of COVID-19, skincare companies such as Kiehls and Sephora have closed all of their Canadian locations for the time being.
• Because Sephora had shut down its Canadian locations for the time being, they have shifted their marketing approach towards targeting the online consumer base by providing incentives such as free shipping on its website.
• Sephora has also extended its return policy once its stores have reopened as another added incentive to shop with them.

D2C Beauty Brands May Be Persevering

• Due to COVID-19, direct-to-consumer brands seem to have an advantage with their online storefront which ships directly to customers. Because major retailers are shutting down, beauty brands, which rely on direct to consumer channels for their business, may be poised to win.
• For example, trèStiQue, which has a significant Canadian customer base, have services built into their business model that makes shopping for beauty products during a pandemic, such as the current coronavirus situation, even simpler.
• trèStiQue has a unique try-before-you-buy program. Customers would be able to choose products and then have 30 days to use the makeup product at home before deciding whether they would like to buy or return the received products.
• This strategy has been a success, with trèStiQue stating that 70% to 80% of the try-before-you-buy customers opted to purchase the product, which is a good conversion rate in this current climate as brands look for fresh, innovative ways to keep their businesses going during this troubling period.

New Industry Opportunities

• The current COVID-19 situation has provided new opportunities in the form of new industry events that have appeared online.
• These events are designed to assist corporate leaders as well as business owners in the cosmetics, beauty, and skincare industry to survive and even thrive during the COVID-19 disruption.
• For example, the Breakthrough Brands Summit are looking for brand leaders in the beauty space to join their summit.
• Canadian direct to consumer businesses may opt to join this summit to polish their skills in order for them to thrive during this turbulent time.

No-Touch Policy

• Sephora is one of many skincare and beauty retailers which offers product sample testing in their stores.
• Recently, there has been outrage on social media, urging beauty retailers to remove makeup product testers from their stores in order to prevent the further spread of COVID-19.
• While Sephora's recent statement has not addressed its plans on whether or not they would cease from offering sample testing products to their customers, other beauty companies such as MAC, a cosmetics company founded in Canada, has introduced a strict no-touch policy for makeup artists due to fear of "spreading germs through samples and demonstrations."
• While this rule is currently imposed on MAC stores in the UK for the time being, there is a possibility that Canada may follow suit in the near future.

Cancellations Of Health And Beauty Events

• Organizers have been scrambling to reschedule or cancel beauty industry events, with some being brought forward as far ahead as March 2021. 
•  Revel In Beauty, Canada's leading trade show and educational event for professionals in the beauty industry to network and learn about the newest tools to refine their business, have canceled their April event, with the rescheduled date still unannounced. Similar events in the health and beauty industry have followed suit with the new dates still uncertain.

RESEARCH STRATEGY

Physical Crowding of Grocery Stores to Buy Food Stock

• Following the outbreak of COVID-19 in Canada, consumers are physically crowding grocery stores to buy and stock foodstuffs.
• The Canadian National Post recently published a picture and insights about customers physically crowding a Costco store within Montreal, Canada, to purchase and stock food and supplies as of March 13, 2020.

A Surge in Food Orders

• As the effect of the COVID-19 outbreak gets felt across Canada, consumer demand "is surging for everyday foods" from groceries.
• One company owned by Longo's recently revealed that demand is quite high at the moment, and it will take about a week to process an order. Grocery Gateway also recently announced that it is beefing up staff due to voluminous consumer requests, to reduce "wait time."

Elimination of Food Delivery Fees by Some Apps

• An insight surrounding the new behavior in food delivery in Canada following the outbreak of COVID-19 is the elimination of food delivery fees.
• One of the companies that have eliminated food delivery fees in Canada is Uber Eats. The company recently announced the waiver of "delivery fee for customers" for over 100,000 independent restaurants, some of them located in Canada.
• Food consumers are benefiting from the removal of food delivery fees.

Initial Hike in Food Delivery Fees

• Following the outbreak of COVID-19, there was an initial surge in food delivery fees across Canada. In March, Food delivery fees went up by about 16.3%.
• This initial increase in food delivery fees occurred before some Canadian "food delivery apps" responded and eliminated their fees.

Non-Contact (Contactless) Food Delivery Options

• Instacart is an "online grocery delivery system" that has adopted the "leave at my door delivery" option across Canada. The company reveals that there is "a significant surge" in consumer adoption as well as opt-in usage of this new feature.
• Instacart is an "online grocery delivery system" that has adopted the "leave at my door delivery" option across Canada. The company says there is "a significant surge" in terms of consumer adoption as well as opt-in usage of this new feature.

Demand for Water, Canned Vegetables and Rice

• Consumers in some cities in Canada are increasing their demand for canned vegetables, water as well as rice.

• An example of a Canadian grocery company experiencing a surge in demand for canned vegetables, water as well as rice is Longo's. The company revealed that the above items are among "some of the most in-demand" grocery food items.

• According to Longo's, the demand for canned vegetables, water, and rice has gone up to by three times following the outbreak of COVID-19. Longo's is known as a "family-owned grocery store" chain that has its headquarters in Ontario, Canada.

Research Strategy