Beauty companies have a growing focus and rising investments into developing their digital strategies and online presence. The objective of these strategies does not only include online sales but also to build strong brand image, raise brand recognition, analyse consumer habits, drive innovation and also to offer a competitive pricing platform. There are good growth prospects in the digital space but it is not without challenges, such as the intense competition in a fragmented market space.
Albeit still a small channel, it has more than doubled in value between 2009 and 2014, reaching US$25.2 billion. Industry trends, such as customisation or demand for niche beauty and technological developments have been driving growth in this channel.
Internet retailing has reached its highest penetration of almost 8% in Asia Pacific, and, given the region’s major appetite for technological innovations, this trend is likely to continue.
With growth in mobile-based internet retailing especially dynamic in markets such as China and Africa, retailers need to optimise their sales platforms to handheld devices.
Beauty product customisation is a growing trend to watch in global beauty and rising number of virtual “try on” and skin analysis sites and apps, e.g. L’Oréal?s Make-up Genius or SkinBetter, aim to tap into it.
Digital platforms for beauty product online sales are growing in numbers and scale, these include multi-channel retailers, e-tailers, social media sites, mobile apps, direct sellers and beauty box subscription services.
Online-only brands, such as Glossier, with a strong story or emotive associations engage more closely with consumers which can help them differentiate themselves from competition.
Encouraging clients to share product information, comments and ideas can be utilised as an effective and relatively cost-efficient marketing tool, however consumer-generated content needs to be managed carefully.
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