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Viewing report
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Retailing Beauty Products Online
GBC Consulting, July 2011, Pages: 110
By 2020, 40% of the global population is expected to be online reducing the digital divide between developed and emerging markets. The biggest growth will be in Asia Pacific. For example, China is expected to have 700 million online users compared to 280 million in the US. In UK, online retail is growing six times faster than high street sales and is forecast to hit £37bn a year by 2014, according to a retail survey. The rapid expansion is hitting high street retailers who are struggling to remain competitive with 40,000 shops closing over the past decade. Many more familiar brands will disappear from town centers as a growing number of retailers close shops and trade solely on websites.
Globally, beauty and personal care internet retailing represents only 3% of overall internet sales in 2010. The small share of beauty and personal care sold through the internet is limited by the somewhat slow uptake of e-commerce enabled retail sites by the key beauty distributors such as beauty specialists, pharmacies and drugstores and department stores. The majority of beauty products available online are through niche sites, and general retailers such as Amazon.com
Online performance depends on more than just business model alone, The two biggest and fastest growing online retailers Apple and Amazon, a pure player and a multichannel retailer, are evidence that company strategy and execution are more important than model alone.
The strongest growth will be seen in emerging regions, especially Asia Pacific, which is expected to grow to about the same size as Western Europe by 2014, and Latin America, which will grow to rival North America in value terms by 2014. The BRIC markets are becoming far more important for the beauty industry than ever before: BRIC countries will all be pivotal for future growth: these four countries alone will contribute over half of the total US$43 billion absolute growth in global beauty and personal care over 2010-2014.
Consumer squeeze on spending impacts online sales positively, following constrained consumer spending, the online channel has benefited within most fast moving industries increasing in 2010 in share of the distribution with wide-ranging products.
Looking forward to 2014, the star category will continue to be skin care, which will increase its lead to become by far the biggest value category in the global beauty industry. This will be driven primarily by strong demand in Asia, and China in particular as rising disposable incomes in the region mean strong growth in premium-priced skin care, especially skin whiteners. Sets/kits, fragrances and skin care are the products with the largest share of purchases online.
Social media is no longer an add-on for internet retailers; it's been integrated into everything they do. Online retailers that have spent the past few years ramping up their internal social media marketing infrastructure and their presence on sites such as Facebook and Twitter, will take social media to new heights in 2011. And as they do, they will evolve the way they market across all media, not just online. We expect that in 2011, 80% of companies with 100 or more employees will use social media tools for marketing, up from 73% in 2010 and nearly double the usage rate in 2008. As the use of ecommerce video proliferates, retailers are learning lessons about what works. Videos produced by retailers tend to perform better than those supplied by manufacturers. And videos that show in informal settings are preferable to clips that are edited together from still images, video footage and other marketing material.
Internet retailers has to use Facebook, YouTube and other sharing sites to increase the visibility of videos, maximize search rankings and expose their brands to larger audiences.
Many retailers are adding video links to email campaigns, which allow users to access clips on their smartphones, tablets or PCs. The goal is to reach as many consumers as possible, wherever they might be and all platforms and devices are potential access points. Smartphones are fuelling the rapid online sales growth as customers place orders on-the-go.
Some key questions answered
- How to use new digital media for beauty products online?
- What are the priorities for beauty manufactures?
- Which products or categories selling most online and why?
- What tactics manufacturers use to influence sales and demand for new products?
- How beauty manufacturers influencing demand by changes in package and pricing?
- What is the mindset of online shoppers and how they make their decisions?
- What strategies or methods to follow to for online success?
- Which country or region to focus most for better marketing of beauty products?
- Which marketing channel to use for effective sales?
- What is the future like for online retailing of beauty products?'
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