Beauty Store Business

DEC 2018

Beauty Store Business provides solutions for better retailing! New products, industry news, savvy business moves and important trends affecting both brick-and-mortar and online retailers are included in each issue.

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Page 18 of 63 | December 2018 15 AMAZON'S BEAUTY MARK Beauty is one o the most enduring markets in the world. When the economy is on the decline, beauty sales remain steadast. So, it's no surprise Amazon has aggressively pursued this market. Orbis Research predicts that the global cosmetic products market (beauty and personal care) will be valued at more than $805 billion by 2023. And Amazon's claims on the beauty market are already producing dividends. Its U.S. sales o health, personal care and beauty products are expected to reach $16 billion in 2018, a near 38 percent increase, according to eMarketer. The retailer's luxury beauty segment has grown 57 percent, comprising $250 million in sales. It used to be that luxury, proessional and indie beauty brands staunchly reserved their oerings or retailers within their niche. Their determination to protect their brand image, reputation and pricing meant that sightings o their products in mass retail settings were more likely due to unauthorized sellers. But today, you can ind all three o these beauty categories on Amazon. Independent, emerging and boutique brands, such as 100% Pure, in addition to sellers, such as Wilshire Beauty, can be ound in Amazon's Indie Beauty department. The retailer eatures close to 300 brands, including Manuka Doctor and Elchim, in its Luxury Beauty department. Its Proessional Beauty department sells salon, spa and dermatological oerings, including OPI, Pureology and Dermablend. Customers can also use its locator eature to ind related services. It's been reported that Amazon has addressed the ears o some brands by oering to crack down on third- party, unauthorized resellers o their products on the site. With incentives such as brand protection, brand exposure and the potential or a bounty o unsolicited new customers, Amazon's beauty ootprint is expected to be massive. Already, the retailer's 2018 second-quarter sales o health and personal care items totaled $1.9 billion (a 23 percent increase). Sales or beauty products reached $950 million (up 26 percent; estimates reported by One Click Retail). According to eMarketer, Amazon's anticipated sales o $16 billion in health, personal care and beauty in 2018 will represent more than 44 percent o total retail ecommerce sales o health, personal care and beauty products in the U.S. PLAYING TO YOUR STRENGTHS When experts postulate how a modest online bookseller that launched in 1994 catapulted to the very top o today's retail industry, they draw the same conclusion: customer service. Customer obsession rather than competitor ocus is one o Amazon's our guiding principles. The others include passion or invention, commitment to operational excel- lence and long-term thinking. With customers as its ocus, Amazon has topped the charts in customer service rankings or years. It ranked No. 1 among the Top 50 leading retailers in global retail customer experience in the 2017 ForeSee Experience Index. Amazon also ranked No. 1 in customer satisaction in the Internet Retail category in the 2017 American Customer Service Index retail report, reportedly, or the eighth year in a row. In response to Amazon's rankings, ounder and CEO Je Bezos shared, "We wake up each day thinking about how to delight customers and invent on their behal." For Amazon, delighting customers has included oering ree shipping, speedy delivery, a loyalty program ull o perks (Amazon Prime), an expansive assortment and some o the lowest prices available, not to mention the convenience o online shopping. But, don't ret. Here's the great news: Superior customer service and customer experience are also the smaller retailers' keys to relevance and success in an Amazon- dominated retail era. "Regardless o whether you are a large or small retailer, the undamentals o retail are the same–the right product at the right price with an experience that is aligned with what the customer wants," says Imtiaz Patel, managing consultant or Accelerated Growth Solutions, a boutique management consulting irm that has consulted some o the most successul enterprises in the world, including Walmart and American Express. He adds that it's crucial that smaller retailers get to know their local customers on a personal basis. "In some ways, this is like going back in time to an era when local shopkeepers knew their customers and made personal recommendations," he explains. "There is a real opportunity or small retailers to have a successul, thriving business i they ocus on the advantages o being small." As smaller retailers compete with the likes o Amazon, they must remember the most enduring characteristic o beauty: It is experiential. It involves the senses. Partici- pants breathe in the scents, eel the textures and look or the true colors. It's communal–best enjoyed with others, whether shopping buddies or helpul store sta. Beauty retailers must beckon customers to their stores by "Regardless o whether you are a large or small retailer, the undamentals o retail are the same." —Imtiaz Patel, managing consultant, Accelerated Growth Solutions Imtiaz Patel Clay Campbell Brian Farn Billy Vito La Venia

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