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The Online World—Beauty Counter of Tomorrow

By: Liz Grubow
Posted: April 6, 2010, from the April 2010 issue of GCI Magazine.

In the past 20 years, there has been a dramatic change in the methods by which consumers gather information, interact with beauty products and choose the retail channel of their preference. In North America, Asia, Western Europe, Russia, India and Brazil, there are new patterns emerging in which brand owners are encouraging direct and open dialogue with their consumers through online outlets. While department stores, drug and specialty stores, and direct-to-consumer channels are still viable channels for beauty sales, online sales have skyrocketed, and brands can no longer afford to ignore e-commerce as a critical part of retail strategies. In 2009, NPD Group, Inc., a market research company, reported that the Internet was the only retail channel to post an increase from the previous year in beauty product sales. What does the rise of e-commerce and digital marketing mean for the global beauty industry?

On a global scale, the Internet provides the same benefit to the consumer regardless of geographic location. Online retail offers a more convenient point of purchase and more ways to compare prices, endless product options and more information about those products without leaving home. The Internet is becoming intertwined in the daily lives of consumers everywhere, and is considered the most widely used resource for information gathering. As a result, consumers are making more informed purchase decisions, and are no longer limited by the products available in their direct offline community, otherwise known as brick-and-mortar stores.

Blog Power

In the U.S., Europe, South Korea and China, blogs are trusted sources of information for millions of readers daily, providing objective information in the form of product reviews, recommendations and resources on demand. Blogs have, in effect, replaced the beauty counter of the past, providing a more “personal” interaction for purchase decisions.

Since 2007, the influence of the blog has grown immensely, bringing with it the perks of a legitimate information stream and the attention of beauty marketers and public relations executives. Blogs provide an important experiential aspect for consumers to interact with others in their own kitchen or at the coffee shop—whether it’s a girlfriend or acquaintance, or someone they’ve never met from across the country or across the globe. And in areas such as China, blogs present an opportunity to connect with women in other regions that those consumers otherwise may not have the opportunity to communicate with.

As the popularity of blogs increases, greater legal issues and government regulation abound. In the U.S., beauty bloggers were specifically targeted in October of 2009 when the Federal Trade Commission ruled that blogs must clearly state the connection between a product endorsement and the brand owner, disclosing any compensation received. In China, bloggers continue to experience a growing number of government restrictions on what they are allowed to say and where they are allowed to say it. Even pervasive sites such as Facebook and YouTube have been outlawed by the Chinese government.