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Selling Online

By: Imogen Matthews
Posted: December 5, 2006, from the December 2006 issue of GCI Magazine.

Blogging, tagging, bookmarking and social networking are words that have spread like viruses across the Web. Many young people choose to spend their free time online rather than watching television, and companies are just starting to wake up to the opportunities this has created. However, the beauty industry has a long way to go before it catches up to these consumer habits, with most companies spending a miniscule amount of their marketing budget on Internet advertising.

To put the market in perspective, a report by Forrester Research predicts that global online sales of consumer goods for 2006 are expected to reach $138 billion, but cosmetics and fragrances are far behind other retail categories—computer hardware and software, auto parts, apparel and footwear, for example.

According to Simon Pitman, editor, Cosmetics Design Europe*, the outlook for online cosmetics and toiletries is good. “This is due partly to big increases in the number of online sites selling fragrances and cosmetics, as well as growing confidence among consumers about making such purchases over the Internet,” said Pitman. He suggests that it is preteens and teenagers who are most likely to engage with cosmetic Web sites, citing the example of Britney Spears’, curious fragrance, which was Amazon.com’s number one fragrance in December 2005.

Young women are the prime target for magazine’s that have launched online versions. Increasingly, this is where companies such as Chanel and Estée Lauder are looking to spend their advertising budgets. At Future Beauty and Body Visions 2006, a marketing conference held in London in September 2006, Jenny Cossons, Condé Nast Interactive’s director of fashion and beauty advertising, demonstrated how new technology is bringing beauty advertising to life. Online video ads hand control to consumers, allowing them to fast forward or rewind sequences—an ideal way to demonstrate makeup application and maximize the value of the ad.

“Estée Lauder is one of the most forward-thinking online brands, and Bourjois, (which) has never previously worked online before this year, has launched a competition to win lipsticks in glamour.com,” explained Cossons.