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Retail Shifts Push Beauty Purchasing from Stores to Online and Back Again

Posted: October 16, 2013

In a post called "Direct to the Top," Kline Blogs looks at the popularity of direct sales in beauty, including where the key feeders are and how the channel is expected to grow over the next few years.

The post notes, "Since 2007, the direct sales channel for cosmetics and toiletries has posted a compound annual growth rate (CAGR) of almost 6%, considerably above the average all-channel growth rate of 2%, according to Kline’s latest Beauty Retailing USA biennial report. Driving this growth is e-commerce, which has experienced over 25% growth over the past five years. However, every direct sub-channel shows robust sales growth, with the exception of person-to-person sales: infomercials, home shopping networks, and all other (which includes non-electronic media such as catalogs, direct mail order, and direct response print offering cosmetics and toiletries).

"Many retailers are dynamically acting to gain dominance in online cosmetics and toiletries sales, several of which are profiled in detail in this report, with sales and growth estimates. For example, Amazon has declared 2013 the year when it makes major advancements in the retailing of beauty. Amazon has transformed the shopping environment in almost every category it has approached, successfully chipping away from big-box retailers in everything from books to consumer electronics.

"On the other hand, DermStore has always focused on the cosmetics and toiletries industry. DermStore.com focuses primarily on clinical and niche luxury skin care brands including: Jan Marini, Decleor, Skinceuticals, Glytone, Murad, Philosophy, Ahava, Elta MD, and Peter Thomas Roth. The company also offers brands that are specific to men, such as Anthony for Men, Grooming Lounge, The Art of Shaving, and Nickel. The online retailer is expanding in a different dimension. In 2012, DermStore opened a salon with spa services in Hermosa Beach. This location serves as the only bricks-and-mortar retail store for the company. Furthermore, Beauty Fix owned by DermStore offers a monthly sample box for $49.99 for a kit containing both prestige and mass products.

The post wraps up, "For a better understanding of what Ebay, HSN, Guthy-Renker, QVC, and other direct sellers are doing to succeed in this exciting cosmetics and toiletries channel, refer to Kline’s Beauty Retailing USA report."