The online cosmetics is an industry that is currently booming. In fact, 31.3% of consumers said they bought at least one cosmetic product online in the year 2020, making the beauty sector the 4th largest e-commerce market in terms of its number of customers.
So how is the beauty industry is changing? Our digital experts took a closer look at the main digital innovations that are shaping the beauty sector.
2020: Key Insights
According to figures from analyst firm Zion Market Research, by 2024, the global cosmetics market is expected to reach $863 billion.
In 2020, online beauty sales increased by 73% since the previous year, over the same period. While consumers, especially millennials, are increasingly opting for e-commerce solutions to purchase cosmetics, the in-store experience is still preferred as it allows for product testing before purchasing.
Indeed, this is exemplified by the fact that 80.7% of global beauty product sales are made in stores.
As for the consumption of beauty products, Asians rank first with 41% of the market, followed by North Americans at 24% and then Western Europeans at 18%.
In Switzerland, the consumption of high-end cosmetic products per capita is twice as high as in France or the United Kingdom. Indeed, the annual cosmetic budget of a Swiss consumer is about 290 CHF, or 263 EUR, compared to the average 134 EUR for European consumers in 2019.
Beauty and COVID 19
The pandemic has radically transformed consumer behavior. According to Euromonitor, the rise of digital media, the importance of general hygiene and the revival of at-home beauty care have all contributed to reshaping the global beauty industry.
The way the fashion and beauty industries and leading brands engaged with their audiences was greatly applauded in 2020. For example, cosmetics factories transformed and adapted their labs to produce hand sanitizer and New York fashion designers used their workshops to create hospital face masks.
New consumer behaviors have emerged:
• Online shopping made easy
The year 2020 saw a sharp spike in online shopping. Indeed, according to Euromonitor, 34% of consumers can now be considered “digital beauty” buyers. Consumers are becoming increasingly comfortable with buying cosmetic products online without testing them first.
It is also important to highlight that they are strongly influenced by social networks when making these purchases.
• Improved personal hygiene habits
The results of Euromonitor’s study show that 93% of consumers wash their hands at least twice a day and that more than half of them do so five times or more.
This improvement in general hygiene has led to an increased need for hand care products, including hand lotions and creams that soothe dry or chapped skin from frequent washing.
• Self-care at home
The global pandemic has caused hair salons and beauty salons to shut down temporarily, social distancing, induced among many the need to save money. These factors have all contributed to the fact that people are now taking care of themselves at home.
The Euromonitor study noted that more than half of women in the world (55%) paint their nails at least once a month, and nearly two-thirds of women and one-third of men apply a face mask at least once a month.
Digital native beauty brands: a phenomenon that is revolutionizing consumer behavior
Digital Native Vertical Brands (DNVB) are brands born on the Web and market “direct-to-consumer”. What sets them apart is that they follow a vertical business model that eliminates the middleman from their value chain.
Indeed, this system was made popular in the beauty industry by the brand Glossier, founded in 2014 by Emily Weiss, an American blogger who was able to transform her Into the Gloss website into a globally successful brand in just three years. With only a small range of 20 skin and makeup products, she built a $390 million empire that operates as a successful DNVB.
Digital Native brands rely on their community, which is often comprised mainly of younger generations that share their opinions, interests and experiences on social media.
Indeed, generations Y and Z often use social media, especially Instagram, as an inspiration platform and to discover new brands. These consumers also trust influencers and their product recommendations.
The key success factors of Digital Native brands:
• A direct dialogue with consumers:
With a “customer-centric” approach, these brands maintain an ongoing dialogue with their consumers via social media. The key objective of this is to gather consumer insights by taking into account consumers’ opinions on products in order to create new product launches and improve their customer experience.
The Glossier brand, for example, identifies product ideas by crowdsourcing on their Instagram account and on the founder’s blog. Other brands like Laboté and Proven have based their entire product strategy on consumer requests so as to offer their customers personalized cosmetics that are tailored to their expectations.
• Authentic storytelling:
Digital Native brands communicate beyond the product in order to highlight the brand’s values through storytelling, with the aim of influencing consumers and persuading them to buy.
• Beauty brands and social media influencers:
Brands must maintain good relationships with influencers because they are considered as a powerful tool for customer acquisition.
Influencer selection, marketing campaigns and sales performance monitoring are now key aspects that contribute to your brand awareness and that will help increase your sales.
• Product transparency:
As consumers become more and more sensitive to the ingredients of their cosmetics, Digital Native brands have taken this into account. Highlighting the transparency and sourcing the origins of their components when marketing their products. Today, the priority for many brands is to reassure consumers about the quality of their ingredients.
• A flexible launch cycle:
Flexibility in the launch of new products on the market allows brands to adapt to the evolution of customer demands. Take Kylie Cosmetics, for example, which regularly captures the interest and curiosity of consumers by launching limited edition and themed collections.
• A flexible and effective operational model:
In order to accelerate marketing and ensure flexibility of offers according to the latest trends, most Digital Native brands outsource the design and production of their cosmetics and then purchase finished products with packaging created with the brand’s image.
⇒ Read more : Artificial Intelligence and Healthcare
The best digital trends in the beauty industry
• Virtual makeup:
“The makeup app” is one of the most impressive innovations in the beauty industry. It allows consumers to choose from a range of looks and try them on virtually via a smartphone camera.
For example, Sephora was able to showcase its catalog while offering beauty tips via its virtual makeup application.
Following the same principle, L’Oréal provides a set of different looks that you can apply to a photo of yourself or directly on your face via your smartphone’s camera.
You can try on different shades of foundations, lipsticks and eye shadows to see which suit you best. Indeed, from one photo, you can compose a complete personalized makeup look.
O.P.I is another beauty brand that has also embarked on the virtual makeup journey. The O.P.I. application allows you to scroll through different nail polish shades on a “model hand” that matches the user to help them select their ideal nail color.
• Virtual hair salons
Using a smartphone or a connected mirror inside the hair salon, you can now test a range of different types of hairstyles and haircuts, from a simple trim to more outlandish and sophisticated hairstyles, without having to take the full plunge.
Placed inside the hair salon, the connected mirror is not only a great way to attract and retain customers, but also an effective way to help the hairdresser get a better idea of the exact haircut a customer wants.
• Digital in the store
With all the developments and innovations in digital media, cosmetic stores are updating their spaces. Now there is no need to try on endless amounts of makeup on to finally be able to choose the products that will perfectly match your skin tone and face.
With just a few clicks, each customer can choose the products that flatter them best, without having to test them directly. This is a true time-saving tool that has a real added value for customers.
• Chanel develops an AI capable of identifying any shade of lipstick
Chanel has developed an application based on artificial intelligence. It is able to identify the shade of lipstick from a photo by simply scanning it, and can then find the closest reference among the 400 existing shades within the luxury beauty brand.
Once identified, the application will then offer the user to “try on” the shade via augmented reality.
• Interactive terminals
Marionnaud and Sephora offer this new beauty service in their stores. The interactive terminal acts as an intermediary between the brand’s website and the physical store.
For example, if a product is no longer available, consumers can order it directly from the interactive terminal, here they can select a date on which to return to the store and pick up their purchase.
The interactive terminal has many possible uses, especially in the beauty industry, where it can serve as a personal virtual advisor and as a tool for presenting the brand’s various products. This device allows consumers to feel privileged and also promotes customer loyalty.
⇒ Check this out : The digitalization of Sephora stores!
Beauty Product Innovations
• The Kao Nanofiber Mask
This is a spray mask that sprays nanofibers. Once sprayed on the face, the mask forms a very thin film, like a second skin, which hydrates the skin. Its use could even be extended to the medical sector and used to treat scars for example.
• The Amorepacific’s 3D mask
Amorepacific, the leading cosmetics group in South Korea that owns brands such as Laneige and Innisfree, is betting a lot on “Smart Beauty”. The brand unveiled its 3D printed mask at CES 2020 in collaboration with Lincsolution.
Amorepacific’s system uses an app to define facial dimensions and print a custom hydrogel mask tailored to each individual’s body type and skin needs.
• Optune by Shiseido
The Japanese cosmetic brand Shiseido also offers a high-tech product called Optune. This innovation has the following features: after a thorough analysis of your skin, the device creates your personalized treatment based on 80,000 possible combinations.
The application also takes into account your menstrual cycle, mood, weather conditions, ambient humidity and other factors. The final treatment is thus perfectly tailored to your skin’s needs.
The key players in the cosmetics industry have understood the strategic importance of technological and digital innovation.
For more information and digital industry insights, do not hesitate to contact us today: https://eminence.ch/contact-agence-marketing-geneve/