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How Ecommerce Is Impacting The Growth of the Cosmetics Industry?

  • June 14, 2021
  • by Shivani Rajput
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Estimated reading time: 6 minutes, 53 seconds

Ecommerce hasn’t left any business sector untouched. But is it doing any good for the cosmetics industry? Is it a good idea to take your cosmetics business online? Let’s find out!

Is Ecommerce The Future Of The Cosmetics Industry?

What is the first thing that comes to your mind when you hear the word “cosmetics”? Perhaps a bunch of lipsticks, foundations or a small colourful makeup counter in your nearby department store. Isn’t it?

But the cosmetic industry is much more than just multicoloured lipsticks and foundations for which it is known, well traditionally!

In reality, the cosmetics industry produces nearly every product that can be used externally on your body, from makeup products, to skin and hair care products. Not just that, cosmetics companies are making good use of technology and eCommerce trends to offer better services to their customers. We can’t say a lot about the future, but one thing is for sure — E-commerce is the future of the cosmetics businesses. And in this article, we will discuss how E-Commerce is leading the beauty industry towards a bright and shining future!

Rise of Ecommerce in The Cosmetics Industry

Traditionally, the cosmetic businesses have always relied on offline, “in-person” retail sales to attract new buyers and retain the existing patrons. But with the advent of digitalization and the growth of digital commerce, cosmetics companies have already started holding a firm foot beside the leading eCommerce industries.

Statistically speaking, the cosmetics market is expected to touch $463.5 billion by 2027, worldwide.Leading industry players like Estée Lauder, L’Oréal and Unilever have ruled the global market for years. But with the growing popularity and demands of sustainable, cruelty-free and vegan products, more and more brands are emerging and trying their luck in the industry.

While the beauty industry has been around for about a century, modern cosmetic businesses have become more technology-driven. For instance, L’Oréal has successfully developed a wearable sensor that tracks the user’s sun exposure, along with a mobile application that calculates the sun damage to the skin of the user. Similarly, a Japanese cosmetics company Shiseido launched their IoT powered skincare system that assesses a user’s skin condition via a mobile app.

These examples are enough to tell where the modern cosmetic industry is heading and what its future looks like. Now, let’s take a look at the factors giving rise to eCommerce in the beauty sector.

Factors Giving Rise to Growth of Ecommerce In Cosmetic Industry

1. Personalisation

The biggest way in which cosmetic companies are appealing to their online customers is by providing them with personalized services.

Today, leading cosmetic companies are developing online beauty assessment systems by deploying their beauty experts, data scientists and developers. With these solutions, they are providing in-person beauty consultancy to their customers.

This is just an example, but companies are using this kind of personalisation to bridge the gap between their online stores and worldwide customers. Interestingly, most cosmetic businesses are surpassing the experience their customers might get at an offline makeup counter.

Cosmetic companies are collecting data about their new customers and maintaining the same for older ones to provide a unique and customised online shopping experience tailored specifically to their needs.

2. Competitive Pricing

Competitive pricing is another great factor that is responsible for transforming the beauty industry. Smart pricing strategies, for example, are helping businesses to stay ahead in the competition and top the global marketplace.

Believe it or not, online shopping is all about securing the best products at the most affordable prices. The reason why customers prefer shopping online, rather than from brick and mortar stores is the availability of the same product but at heavy discounts. Companies use this behaviour of customers for making their marketing decisions.

It will not be wrong to say that cosmetic companies use pricing as a secret weapon to lure customers. The fact is, they’ve got huge margins to do so. Brands within this space are capable of adjusting their prices competitively without giving up on their profit margins. In simple words, they can make huge profits while maintaining competitive pricing – and that’s a win-win situation!

3. The Global Endeavor

The modern world of cosmetics e-commerce is like a global endeavour, it is no longer limited to the customers within a state or a country. Today, customers can buy their favourite products, be it national or international, from their mobile phones in minutes.

Cosmetics e-commerce has made it possible for brands to target customers worldwide. It is like an excellent opportunity for businesses to expand themselves globally. International makeup brands like Mac, Bobbi Brown, Too Faced, etc. have become the homely brands for makeup lovers.

How Technology Is Influencing Customer Behaviour Within the Beauty Industry?

Online retailers have left no stone unturned for driving sales on their platforms. Not only are they using powerful digital marketing technology, but also making full use of other marketing trends. Most of these marketing efforts aim at providing an exceptional multi-channel marketing experience to the customers.

Below are the secret tools that online cosmetics companies use to increase their brand awareness, sales and profits :

1. Social Media

Hands down… Social media is the biggest contributor to the growth of cosmetics e-commerce. One platform that is helping brands to target their worldwide customers is none other than Instagram. It allows brands to advertise their products in the most effective and visually appealing manner while allowing customers to purchase directly from the post itself. This direct-purchasing ability has improved sales and conversion rates for all kinds of cosmetic brands.

2. Celebrity/Influencer Marketing

Cosmetics brands like Kylie Cosmetics, Estée Lauder have become the most popular brands over the last few years, with a significant growth. Almost all makeup brands reach out to celebrities and influencers even before launching their product. Some even make them their brand ambassadors, which create a hot “buzz” among customers and take their brand awareness to a next level.

The same goes with Influencer marketing. Instagram influencers play a major role in promoting brands and introducing the latest products to their followers. It has proven to be the best marketing strategy for cosmetics brands and helping them to generate more revenue.

3. Customised Products

One way of setting an online cosmetics store apart from the offline one is by providing customised products to the customers based on their skin types, complexion and issues they’re dealing with. It helps customers to narrow down their search and get the response as they would get in the physical makeup centre. This personalised approach makes customers feel supported and connected to the brand and also provides them with the best shopping experience.

People prefer purchasing products online because they are able to find the best deals, see the ingredients, customer reviews, recommended skin type and blogs written on the products at their fingertips. This differs from the offline shopping experience as it is more time-consuming and less personalised. Shopping at an offline store can never offer the same speed and product information, which is readily available online.

4.Augmented Reality (AR)

Augmented Reality is relatively new to the cosmetics industry, but is offering great results in enhancing the performance of online businesses. This innovation allows customers to try out the products before purchasing them. Online cosmetics stores are using virtual mirrors for recommending the right products according to the complexion and skin type of customers.

This technology is still in its development phase and will surely offer a new dimension to revolutionise the online beauty industry in the coming years.

So, this is where the online cosmetics industry is going. E-commerce is definitely impacting the growth of the cosmetics industry, of course, in a positive way. With the introduction of new technologies and market trends, beauty brands are undergoing a great transformation and growth. Hence, it is the right time to hire a reliable eCommerce agency and take your cosmetics business online for exponential growth and success.

If you’re planning for the digital transformation of your cosmetics business or looking for a great start in the online cosmetics industry, then RVS media can help you. As a reputed eCommerce web development company, we can help you establish your online beauty brand and grow your business like never before. Contact us today!

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