Retail transformation and innovation continue to be key priorities for sector managers.
The search for formulas to help fashion brands through the change process that the entire value chain is subject to involves, amongst other strategies and tactics, active observation of what is happening in other sectors or industry segments.
The digital transformation is a global phenomenon that is quite common in this day and age; therefore, learning must become more diverse and look beyond the boundaries of fashion retail in and of itself.
One of the sectors that has been growing the most over recent years is the cosmetics and perfume sector: one of fashion’s sister sectors, as it fits into the lifestyle category.
In fact, many fashion brands have recently included the cosmetics and perfume product category amongst their selection through fragrances, skincare products, and/or make up as an additional source of income and a way to attract consumers.
In financial terms, the perfume and cosmetics markets are growing at an unstoppable average pace of 5% each year. In Spain, consumption of products from these sectors has been on the rise for four years at a stable 2% annual rate, reaching 6,954 million euros last year.
Additionally, it must be noted that Spain has positioned itself as the fifth in Europe in terms of its beauty products market, boasting a yearly consumption of 150 euros per capita and above the European average, which is at 137 euros per year.
What are the keys to the sector’s growth and what can be learned by fashion from beauty retailers? Let’s review the cosmetic and perfume sector’s hat-trick.
The game of demand and “big beauty data”
Not only are the consumption patterns of beauty products and cosmetics changing, but also the consumer in general – paying more attention to self-care and wellbeing.
The brands of the cosmetics and perfume sector are taking a quite active role in their customers’ knowledge process, putting their faith in strategies that are mostly digital –with an emphasis on social media and based on Big Data and Analytics technology– to create an accurate and dynamic snapshot of the beauty consumer and to meet consumers’ needs with products and services that fit demand.
To this end, the beauty industry stands out as a very active analyst of millennials – the target profile and one which is also shared by the fashion industry. In order to accomplish the aforementioned, they turn to data analysis technologies and predictive analytics to adjust demand while also manipulating stock.
Likewise, the beauty sector has a lot of brand examples that support the strategy of using scarcity to bring about better consumer engagement and interest.
The point of sale as a key to create a memorable customer experience
While e-commerce is advancing at an unstoppable pace in the beauty sector (just like in the fashion sector), the physical point of sale continues to be paramount to create a memorable customer experience and get to know the consumer even better.
In terms of beauty retail, there are numerous examples of good practices in which stores have become true experiential temples where the customer can test the product, get information on it from specialized sales assistants acting as beauty advisers and have a valuable customer journey.
Here, the technologies combined with personalized sales assistance lay the foundations for the success of beauty retail. Getting to know, testing, and playing with the product is just the tip of the iceberg. Underlying those aspects, cosmetics and beauty retailers have technological advances in terms of stock management and predictive analysis that always provide a competitive advantage from the customer experience point of view.
Innovations in products and brand value proposition
Simultaneously to the aforementioned, and very closely related with the transformation of consumption habits, the beauty sector is reinventing its value proposition.
In recent years, many indie brands have popped up with innovative ideas in all the categories revolving around beauty –from makeup to personal care– all closely linked to the evolution of consumers’ tastes.
Product diversification, natural and organic cosmetic lines, and customization are the great attributes connected with the sector’s innovation – a sector which is constantly studying the context and learning more about the consumer to improve its strategies for approaching potential customers.
In short, the cosmetics and beauty industry is an interesting example to study and to take as a source of strategic inspiration for fashion – not only due to the two industries’ similar types of consumers, who are all worried about their lifestyle, but also because of their strategic faith placed in tools and tactics to assist with growth and change.