November 8, 2016
Online sales and the use of technology have made their way into some surprising markets as nearly anything can be found for sale online. One of the markets that have found a very successful niche in online sales is the beauty industry.
Previously, the sales model for beauty products was based on personal interaction. Customers would interact with a salesperson for advice and direction, then purchase directly or make a purchase through a drugstore. That model has changed significantly from both sides: consumer and manufacturer. Let’s take a look at the ways technology has changed this very personal sales process.
The market interaction
The fundamental market is changing direction as millennials continue to increase their market share and buying power. Millennials are suspicious and avoid buying via the established process. Macy’s model for cosmetic sales provides a view of the traditional market approach.
Individual vendors establish a sales position at a counter. Individual salespeople provide education and motivation for the closing of a sale. The buyer’s increased self-reliance and the availability of online education has significantly diminished the need for the millennial to interact with the beauty product purchase in the established way. Instead, millennials are demanding a “try before buy” philosophy, requiring that manufacturers provide samples for the customer’s use before purchase.
The new education model
As mentioned, online education and marketing have begun to alter the face of beauty product sales significantly. The simplicity of a simple search on Google for any product imaginable leads to the buyer at least researching at a base level. That research may lead to an online sale or may cause the buyer to purchase at a more convenient location.
Department store sales are decreasing rapidly while the market continues to grow. In fact, sales have increased four percent overall, with online sales claiming that total increase. At a deeper level, blogs and detailed instructional videos are guiding the buyer and providing important direction for what to buy. Though this method has a greater impact on makeup sales than skin care products, because of the instantaneously visible results, both have benefitted.
As print continues to struggle to maintain its edge and relevance, online marketing grows and is increasing in variety and technological method. Marketing through Facebook and other social media solutions is growing. The constant presence of advertising and the ties to the customer’s recent searches has an impact through experiential immersion. The experiential nature of this advertising is driving the consumer towards a more diverse method of selection. The buyer is less and less focused on the brand and more on the product itself and who is recommending it.
Marketers like Avon have missed the changing market and are struggling to stay viable. L’oreal and Estee Lauder, on the other hand, have recognized the personality driven market and have responded through their constant awareness of “fresh faces” in their advertising and sponsorships. Sephora and Ulta have set the course by responding to the “try before buy” through their use of trial stations and putting their products on the other side of the counter.
Overall, a once stagnant market is changing dramatically. Macy’s 120 years of sales experience means less and less as the customers take control of the market. Look for a continued change in this $64 billion market.