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According to Lamine Lahouasnia, retailing analyst with Euromonitor International—which will be included in the marketing trends presentations at the in-cosmetics 2013 show taking place in Paris, April 16–18, 2013—global Internet retailing only accounted for around 4% of total retail sales in 2012. However, during the past decade, e-commerce has grown rapidly. “To put this into context, in 2002, Internet sales were under 1%,” points out Lahouasnia. “Perhaps unsurprisingly, North America and Western Europe lead the pack. However, Asia Pacific is the third most penetrated market and has the potential to be on a par with North America and Western Europe.”
The picture for beauty and personal care is somewhat different because the category has underperformed against other product categories online. Two regions stand out as exceptions, which are Asia Pacific and Eastern Europe. “Despite being developing markets, both Poland and China have higher Internet sales penetration than the global average of 3.9% in 2012,” states Lahouasnia. “In particular, consumers in China have flocked to the Internet in search of cheaper prices, aided by fast broadband speeds and the rapid adoption of smartphones. Other emerging markets [that] have shown high Internet penetration of retail sales include Brazil, Argentina, Lithuania and Hungary.”
Will Davis, director of structural package design and branding firm Studio Davis, believes the time has come to invest in new forms of packaging, decoration and media to help articulate new product claims. “The beauty shelf is a competitive category that is generally full of ‘innovative new claims,’ but generally has a very specific category language in its packaging. Remove a brand name from a range of competitive beauty packs, and it’s sometimes difficult to tell the difference,” he argues. His suggestions for remedying this include ideas for a brand’s in-store presence as well as online. In-store, he would like brands to create more visually exciting shapes and forms with innovative decoration techniques, which, in turn, will help better articulate the products’ unique story, improve shelf pop, and engage target consumers.
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Davis maintains that large beauty brands too often play safe, using generic packaging for innovative new products. Furthermore, many are not embracing consumer buying and trialing habits, such as purchasing online, discovering new beauty trends via blogs, sharing information through the likes of Facebook and Twitter, or experimenting with digital personalization—all of which are efforts also known as augmented retailing.
A quick look at YouTube reveals it is no longer just a place for video clips of cats doing silly things. Instead, it’s a social media platform being embraced by young beauty “ vloggers,” or video bloggers,, who are creating their own channel to review, communicate, and even sell new and niche products.
Davis provides the following examples:
- Tanya Burr was working at a makeup counter three years ago when she started posting makeup tutorials. Now, Burr’s vlog has 54 million channel views, and before each vlog is an ad for the new Liz Earle makeup range, an example of clever product placement. Additionally, Burr has signed with a YouTube talent agency.
- “Beauty guru” Michelle Phan, aged 25, attracted 700 million video views to her channel and signed 36,000 customers to her home delivery service within 24 hours.
“With this sort of viewing data, high-end brands have to take notice,” states Davis. “The YouTube platform enables vloggers to get closer to target consumers, giving viewers the opportunity to sign up, make comments and drive the channel’s content.&rdquo
This approach enables brands to build authenticity based on real people retelling their personal experiences, as opposed to marketing spiel, and by fostering personalization, where consumers share what works for them.
Unlike the technology that is used to make a printed icon come alive, augmented technology enables consumers to personally trial a product using their PC or mobile device. Davis draws attention to a YouTube video where a built-in camera (on a laptop or iPad) uses a face recognition app to detect elements of the user’s face so a product can be superimposed on the face.
Holition, the London-based agency behind this, is exploring new ways of selling via augmented reality. Using this video, consumers can explore what pair of glasses best suit their faces. But such technology also could potentially be used to explore lipstick and nail polish colors superimposed on the digital shopper’s face, and an online purchase button could easily be included.
The Estée Lauder-owned brand Smashbox partnered with image recognition and augmented reality platform Blippar to host a virtual shopping wall at a high street catwalk show sponsored by the U.K.’s Look magazine. The initiative allowed consumers to purchase products from Smashbox using their mobile phones while at the Look show event. In addition, they were able to do so from the magazine, which showcased key makeup looks and products from the show enhanced with shoppable augmented reality.
Davis notes of the brand and its efforts, “Is it a cool L.A. fashion photography studio that creates a range of beauty cosmetics and embraces social media, or [is it] a cosmetics brand that embraces social media and has a cool L.A. fashion photography studio? Does it matter?”
Packaging Print Technology
Rolling Optics is a multi-layered print technology that provides a deep 3D impression, and this video clip demonstrates how someone can see right into the packaging with this technology. “This is potentially useful to a beauty brand that wants to communicate active ingredients to penetrate deeply into the skin,” maintains Davis.
Initiatives for the Future of Your Brand
There is no doubt that social media is changing fast and creating many new opportunities for beauty brands. For example, not so long ago, companies believed fragrance could never be sold online because the consumer cannot try the product. But now, “Planned purchases such as fragrances have enormous potential online as consumers can afford to shop around,” points out Lahouasina. “Impulse-driven categories, however, are far less likely to generate a serious challenge in the current climate.”
Even with that said though, the evolving online landscape may change all this, with continuing efforts and other developments, such as same-day delivery and lockers that consumers to pick up goods at their own convenience, becoming more widely used and known by consumers. In today’s marketplace, paying attention to the digital environment is a must and moving forward with smart digital strategy is a must.