The End of the Booming Mask Economy Is Near

From Gap to Vistaprint, companies are betting on masks to save them. But what happens when the bubble pops?

If you arrived at the Vistaprint website looking to bulk-order some promotional pens or business cards or other swag you could send en masse to your remote staff as a morale boost and accidentally landed on its masks page, you most certainly would think you’re in the wrong place. A slick, minimalist grid floating over airy white space flaunts mask collaborations with the most street-cred artists around — L.A. psychedelic multimedia artist Jen Stark, Dutch illustrator Parra, New York graffiti legend Futura Laboratories, and famed graphic designer Geoff McFetridge. If art’s not your thing, then politics might be — there’s also an Election Collection; a Halloween series for the kids; and a rotating cast of seasonally astute patterns, like J.Crew-style buffalo plaid or a gray camo print.

With the site’s clean lines, crisp colors, and stripped-down navigation, the entire shopping experience bears an uncanny resemblance to that of Apple or any other purveyor of a design-forward, highly engineered, premium-priced product. The main difference: Vistaprint’s site is selling an arguably hotter item right now, the unexpected wardrobe must-have of 2020: the face mask.

Amid hundreds of new mask brands that have sprung from thin air since March, Vistaprint has become an improbable front-runner. With its eye-catching graphics and next-level engineering — moisture-wicking fabric, flexible nose bridge, adjustable ear straps, and articulated chin — the masks have been featured on best-of lists everywhere from Wired and USA Today to PopSugar. At $18 per adult-size mask, they’re on the high end—yet since Vistaprint started selling them on April 20, it’s sold more than a million masks.

Pre-pandemic, the company’s vibe was less Apple and more Staples. Unless you were an office manager, conference organizer, or a marketer, you’d probably never heard of the 25-year-old, Netherlands-based subsidiary of $2 billion Irish conglomerate Cimpress that provides custom-printing services to 17 million small-business customers around the world, pumping out signs, banners, and all the conference water bottles, keychains, thumb drives, tote bags, and refrigerator magnets you could cram into the corner of a closet, never to be seen again.

Once Covid-19 started spreading through Europe, though, it didn’t take long for Vistaprint’s executives to see that no one was going to be ordering any of that any time soon. On March 9, the day Italy instituted its national shutdown, CMO Ricky Engelberg had been on the job for less than six months when he got the order from his new boss, Vistaprint founder and CEO Robert Keane: You have a month to start selling face masks. Go. “When I started at Vistaprint, if you’d asked me to do a Family Feud–style game of ‘things I might be doing in the next year,’ getting into the mask business would not have been on the board,” Engelberg says.

Before this spring, most Americans had never considered a face mask — they were strictly the domain of ER docs or tourists from Japan. But by April, when the pandemic shifted into full swing and medical-grade N95 respirator masks were in catastrophically short supply, the CDC issued guidance that wearing simple fabric masks could be our best bet to keep ourselves, and others, safe from the virus.

It also set off the kind of industrial mobilization we’re more used to seeing during wartime: Thousands of DIYers armed with sewing machines started making masks for friends and frontline workers — and nearly all of them, it seems, went on to start an Etsy store (we’ll get to that later).

The universe of face coverings today mirrors the segments of any other accessories category, from the $1 cotton mask from Hanes to a $1,000 gold-studded face shield by Louis Vuitton.

By mid-March, small designers like Christian Siriano had already pivoted to masks — then came the clothing manufacturers, realizing that if they shifted, they could remain open as an “essential business” during the shutdowns. In early April, hoodie maker American Giant joined with Hanes, Fruit of the Loom, Los Angeles Apparel, and seven other brands to make a million masks per week for frontline workers; launched a monthly subscription service featuring masks with licensed designs from DC, Sesame Street, Sanrio, and Nickelodeon. By mid-April, the NBA Store started selling team-logo masks, and by the end of the month, you could get a Star Wars mask from Disney. With each passing week, a mall’s worth of brands seemed to add to the national supply: Gap Inc.’s brands started selling masks in May, followed by Anthropologie, Everlane, Madewell, Adidas, Under Armour, Rag & Bone, Off White, Tory Burch, Eileen Fisher, Marc Jacobs, and on and on. The universe of face coverings today mirrors the segments of any other accessories category, from the $1 cotton mask from Hanes to a $1,000 gold-studded face shield by Louis Vuitton. It’s hard to think of a historical precedent for such a large and diverse cast of businesses to focus, so quickly, on a single product.

By rapidly pivoting into mask production, these companies not only helped meet a legitimate public health need—they also threw themselves a lifeline. Many retail brands were already on life support when the pandemic hit. Since March, retailers including J.Crew, JCPenney, Lucky, Brooks Brothers, and Neiman Marcus have filed for bankruptcy, while Lord & Taylor and Century 21 have or are on track to liquidate. Before Covid-19, McKinsey estimated that sectors like apparel and footwear would grow only 3% to 4%; now it’s predicting the categories will contract by up to 30% by the end of this year. Aside from sweatpants, face masks have become apparel’s only bright spot: According to KeyBanc, by 2021, the U.S. market for face masks could amount to $6 billion.

With masks now available at every Home Depot, gas station, convenience store, and, yes, even vending machine, there’s barely a place where you can’t purchase one. Inevitably, a vaccine will arrive. We likely won’t abandon masks completely, but sometime in the next year we simply won’t need them at the same rate or volume. What happens to the hundreds of companies now betting everything on masks when the demand suddenly disappears overnight?

There are few articles of clothing easier, or less expensive, to construct than a mask. Sew together two or three layers of fabric, attach some elastic rings for ears, and voilà. There are no zippers, rivets, or pockets to worry about, so labor is minimal. And compared to a T-shirt, masks are an efficient use of fabric, which many brands found piling up in the early days of the pandemic. “They’re a few bucks to make at the most unless you’re using specialized fabric,” says Vincent Quan, an associate professor of fashion business management at New York’s Fashion Institute of Technology. Companies like PVH, whose brand portfolio includes Van Heusen, Tommy Hilfiger, and Calvin Klein, spend millions of dollars purchasing fabrics like a commodity. When they can’t be put to use, these large inventories become a liability. “These fabrics have shelf lives, so they can’t just sit,” says a senior executive at a major sportswear brand, speaking on background.

A small apparel or accessories maker might employ just a handful of sewers and cutters, which can make it easier to pivot quickly to a new manufacturing process. “In a big factory,” FIT’s Quan says, “there are production lines specialized for pants, woven tops, etc., that are in a constant rhythm and flow outputting the merchandise they are accustomed to making.” Changing that flow to adjust to mask production can take several weeks, at least.

When the Vistaprint team got the directive from their CEO to pivot into masks, the company already had a preexisting global supply chain — factories in China, Italy, and Mexico — that printed, cut, and sewed apparel and banners at a massive scale. Retooling those factories to produce masks in the monthlong surge effort “involved capital and capital investments,” Engelberg says. “But in some cases, it was just repurposing other, older machines that already existed or shifting some machinery into other factories.”

The site was slammed from the get-go — the day the masks launched, globally, Vistaprint sold one mask every five seconds, with no advance marketing.

The more extreme learning curve for Vistaprint was sophisticated design, marketing, and merchandising to the average consumer. So Engelberg — a former VP of experience innovation at Nike — quickly recruited the pros. He hired Champ, an L.A.- and Portland-based agency headed by former creative directors from Nike whom Engelberg knew from his time there, to work on the first masks’ graphics and design. “We were all just squares in Zoom trying to figure things out in real time,” says Engelberg of the freshly assembled product team spanning eight countries, which had to design for different regulations to sell in Europe versus the United States.

Vistaprint was accustomed to dealing with bulk orders from business customers, but to compete as a consumer business against the world’s top sportswear and fashion brands, it needed to look the part — and meet customers where they were. “We knew that a lot of people were going to be sitting on the couch during the pandemic, browsing on their phone,” Engelberg says. “So we had to create a great mobile-centric experience, which we didn’t have.” They recruited Work & Co., a hot e-commerce design studio in Dumbo, Brooklyn, that builds websites for brands including Ikea, Google, Mercedes-Benz, and Apple, to build a new mobile-first website in all of two weeks. (The company also helped with mask design.)

By the time the mask site launched on April 20, Vistaprint had flexed into a consumer-facing brand machine. The site was slammed from the get-go — the day the masks launched, globally, Vistaprint sold one mask every five seconds, with no advance marketing, followed by a PR campaign the following week. “Almost all advertising for masks was prevented on Google or Facebook at that point,” Engelberg says. Existing small-business customers were key to early sales. “For a brand like Vistaprint, with such a strong existing customer base, to say ‘we have a great mask available for you’ met a lot of people’s needs instantly.” In June, as masks started becoming politicized, Vistaprint’s in-house team, along with the Portland, Oregon–based agency Ghostship and L.A.-based post-production house Loom, debuted an anthemic 30-second ad distributed on Facebook, Instagram, and Pinterest, recasting masks as tools for human connection. By July, the company repurposed the customization capabilities it typically deployed for corporate clients, offering anyone the ability to create custom-designed masks. The higher-profile “artist series” launched in mid-August.

Nevertheless, Vistaprint’s main business — promotions largely dependent on conferences and in-person work activities — is still on indefinite pause, with no clear rebound in sight. A survey of promotional products companies conducted by NAPCO Research early in the pandemic found that between mid-April and mid-May, their sales fell an average 43%, with demand down in every product category. “There is a pretty significant pause in investing for a lot of companies around the world as it relates to external marketing,” Engelberg concedes.

Vistaprint says it’s now producing a couple hundred thousand masks a month. Between that and some pandemic-popular products, like social-distancing floor decals and takeout menus, it adds up to a new source of revenue. Even so, this won’t stop the bleeding: Vistaprint’s fourth-quarter earnings report showed a 32% decline in reported revenue year over year and an 11% decline for the 2020 fiscal year.

Right now, masks appear to be the one solution for everyone’s problems. “If you’re not selling anything, then [pivoting to] selling something probably makes sense,” says Barbara Kahn, a professor of marketing at Wharton Business School and author of The Shopping Revolution (2018). “A lot of companies had extra fabric and people not buying clothes. If you can turn that into masks, at least you get something out of it.”

This spring at Gap, there was nothing to lose. Of all the iconic American retailers on the verge of extinction even before the pandemic hit, Gap Inc. was near the top. In February last year, after years of declining sales growth at its flagship Gap and Banana Republic brands, plagued by a lack of marketplace relevance, it announced plans to close 230 stores. CEO Art Peck, a 15-year company veteran, was shown out in November. And this January, Gap scuttled a move to spin off its most successful brand, Old Navy, in an IPO. The first quarter of 2020 was the 51-year-old company’s worst ever, as it closed 90% of its stores, furloughed 80,000 store employees, and booked a $932 million loss.

The introduction of masks across all of its brands, in mid-April, was an adrenaline shot. In May alone, Gap’s brands sold 3 million masks. In the second quarter, mask sales contributed $130 million to overall sales. Boosted by mask searches — Gap brands come up high in the Google Shopping results for “face masks” — masks were key in driving Gap’s massive surge in online sales, which were up 95% in the second quarter, accounting for 50% of all the company’s sales. Seventeen percent of Gap’s 3.5 million new customers this year bought a mask, and the company had 165% more new customers than in 2019. More than T-shirts, more than jeans, more than, well, anything, masks are now Gap’s bestselling item.

More than T-shirts, more than jeans, more than, well, anything, masks are now Gap’s bestselling item.

For many brands like Gap, masks are the new customer acquisition tool, essentially a lower-priced entry-level item to attract people to the brand. Think of a Burberry scarf, a Coach keychain. “It’s always been a luxury strategy to offer an entry-level product to make younger, less affluent customers aware of the brand,” says The Shopping Revolution’s Kahn. With heritage luxury brands expected to see sales drop as much as 35% in 2020, according to Bain & Co., it’s not surprising that they too have come around to masks. In late August, Burberry became the first major luxury brand to launch a face mask “collection,” available in blue or beige versions of the company’s vintage plaid pattern, for $120.

For some smaller brands that got an early edge in the mask game, it’s completely altered their trajectory. L.A.-based Hedley & Bennett, a 70-person maker of professional chef’s coats and waxed-canvas aprons, pivoted into masks by late March. Its high-end fabric masks went viral on the internet — “Instagram in particular created a surge,” says founder and CEO Ellen Bennett — with zero paid digital marketing. Suddenly sales went up dramatically on other products, including aprons, tote bags, and socks, Bennett says. Prior to Covid-19, Hedley & Bennett’s business was split about 50/50 between hospitality industry customers and online direct-to-consumer sales. Now, online consumer sales are about 80% of the total — particularly useful at a time when restaurants and hotels aren’t exactly stocking up on new gear. The company has sold more than 1 million masks, and total sales are up five times over last year. All of this, says Bennett, “has focused what we’re doing and accelerated where we’re headed as an apron and kitchen-gear brand.”

But as the market for masks reaches saturation, companies need to spend more on marketing to stand out, earn repeat business, and convert new mask customers into purchasers of other stuff. Basically the challenge of any new direct-to-consumer brand, à la an Away suitcase or ThirdLove bra. So those email mask offers from Old Navy, the Vistaprint ad following you onto the New York Times, the cute little Etsy boutique stalking you everywhere you go on the internet — all of that costs money.

Since the start of the pandemic, there’s been a historic 74% increase in social media spending, according to a June 2020 survey of CMOs conducted by Deloitte, Duke University’s Fuqua School of Business, and the American Marketing Association. While marketers have cut back in almost every category, from TV and print to outdoor display, mobile ad spending is up 70% since February. Digital ad spending within the apparel industry as a whole declined 5% from Q1 to Q2 this year, as brands backed off on promoting everything from shoes and socks to formal wear, but ad spending on “accessories” was up 136%. Included in this category: masks.

What makes the mask-making moment so extraordinary is the sudden surge of demand, matched by the nearly instantaneous surge of supply to match it — with the foreboding sense that the demand could stop at any moment.

At Etsy, the online crafts marketplace, masks are now its top-selling product. When the CDC made its fabric mask announcement back in April, Etsy immediately emailed its sellers and told them that the platform was experiencing “unprecedented demand” for mask searches. By Q2, new sellers to the site increased 100% and accounted for nearly a quarter of the 29 million–plus face masks — $350 million gross merchandise sales — sold on the site. As a result, Etsy saw an influx of 18.7 million new and “reactivated” buyers and a 94% year-over-year increase in sales of products other than face masks.

But Etsy, with revenue now up 137%, has also more than doubled its marketing expenses compared to the same quarter last year, including launching a beefed-up new offsite ad platform. As the company put it in its quarterly report: “We leaned in across many of our marketing channels to build top of mind awareness, and to better engage new and existing buyers everywhere they are — on Etsy and off.”

“This isn’t a bubble,” says Joshua Gans, a professor of technical innovation and strategic management at the University of Toronto’s Rotman Business School and author of Economics in the Age of Covid-19. In economic terms, a true bubble refers to a scenario in which the price of an asset rises higher than its fundamental value. It’s often driven by market exuberance, like inflated startup valuations or housing prices. But in this case, Gans says, “the demand for masks is real. It is just temporary.”

What makes the mask-making moment so extraordinary is the sudden surge of demand, matched by the nearly instantaneous surge of supply to match it — with the foreboding sense that the demand could stop at any moment. It’s akin to the micro–trends that blow through categories like toys or fashion. Take the fidget spinner fad that crested and subsided within the span of a few months in 2017. After viral videos on YouTube fueled demand for the little twirling toys early that spring, Chinese manufacturers ramped up production, flooding the market. In late May, the toy accounted for 17% of daily online toy sales; by July, the craze was all spun out. Companies that had rushed in to make and sell them were left sitting on piles of toys. With masks, it’s the scale and velocity of the sudden mask demand, paired with the low barrier to entry to meet that demand, that makes it so unique. “We have these surges when there are natural disasters, but this is quite something different,” Gans says.

The closest we’ve come to it before in any kind of large scale way has been during wartime. In World War II, General Motors shifted almost 90% of its divisions to produce military equipment. Hershey pivoted from making candy bars to making D-ration bars. Coca-Cola opened 64 bottling plants abroad to serve GIs on the front lines in Europe. Companies ramped up production and streamlined processes: Ford cut the time needed to build a plane, for example, from 200,000 hours of labor to 18,000 hours. This massive period of retooling allowed some companies to emerge stronger and dominate their industries for decades.

But there are, of course, the lesser-known tales of the companies that pivoted — and then, as a result, disappeared. New York–based Commonwealth Aircraft Co. was brimming with business during the war. Then it shifted production from its popular single-prop Skyranger plane to produce two glider aircraft, manufacturing more than 1,000 of them for the U.S. war effort. But there was no market for the gliders after the war, and restarting the Skyranger line was hampered by the fact that the old tooling had been recycled for scrap, and the company had failed to update its design to compete with newer planes. Commonwealth went bankrupt and ceased production in 1947.

Even without any clear end of the coronavirus in sight, demand for fabric face masks is already beginning to subside. By now, everyone who’s going to get a mask already has at least half a dozen. Even some Etsy sellers are starting to see mask sales decline. Ultimately, companies like Vistaprint that can really differentiate themselves on quality might squeeze a little more juice from the boom by focusing on higher-end masks that people will hold onto for emergencies.

But if demand continues to drop, so will the mask-related revenue currently giving troubled brands some hope. Gap’s continuing to go all in: It found such success in mask sales that in July it spun out an entirely new B2B mask business, manufacturing in China and selling to other companies in minimum quantities of 100,000 units. Gildan Activewear, owner of American Apparel — which saw a 71% year-over-year decline in net sales in Q2 on weak demand in its “imprintable” T-shirt business — said in May that it was considering making masks a permanent part of its business, forecasting potential demand for 150 million of them a year.

“Masks will be important, for sure, through the second half of 2020,” says FIT’s Quan, who spent three decades in product planning and merchandising for brands and retailers. “And depending upon the level of vaccinations around the globe, it will continue through 2021, maybe into the second half.” But companies need to move on to bigger things, and soon. If you’re a company that’s used to selling shirts and pants, it’s hard to survive on masks alone for too long. “Think about the price points,” Quan says. “You have to sell a hell of a lot of masks to compensate for even an item like a woven top. I don’t really think that the major brands are earning so much money on the masks that it can keep them afloat.”

To a large extent, masks have allowed many companies to delay a reckoning that’s been long in the works. At the end of day, Rotman’s Gans says, “Covid has mostly accelerated existing trends. If you are on the bad side, it is time to review whether it is worth struggling to get to the other side of this pandemic.”

I write about business, science, and things that people do for fun. Work published in Fast Company, Inc., Men’s Journal, Proto, Marker. Vermonter by choice.

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