Sales of cosmetics and toiletries through alternate channels have exploded, growing by nearly $1 billion since 2005, according to the latest Beauty Retailing USA 2010report by worldwide consulting and research firm Kline & Company.More double-digit growth is expected as consumers are increasingly drawn to the convenience of at-home shopping to meet their beauty needs.
Consequently, brand marketers are exploring new tactics to build online buzz. Daily deal sites, such as Groupon, LivingSocial, and so-called “flash sale” sites such as HauteLook, Rue La La and Gilt Group, are fueling e-commerce sales by creating awareness and enticing interest about new products or services by offering one-time discounts in order to create trial.
Doskow also notes that the bricks-and-mortar front is far from lagging: “Beauty has become the new revenue sweetheart in the traditionally slow-growing drug store channel as pharmacies reinvigorate their beauty offerings to lure customers with a more upscale, specialty-store look. For example, Walgreens’ acquisition of Duane Reed and its high-end Look boutiques is expected to promote growth for both the chain and the channel. Meanwhile, CVS, Rite Aid, and others have begun offering new and improved customer loyalty programs and expanding shelf space for their beauty merchandise.”
Furthermore, Kline’s study reveals that as brands increasingly look to leverage mobile and e-commerce to create seamless and ubiquitous purchase options for their customers, single-channel marketing is being rendered less and less viable.
“We expect a great deal of cross-channel promotion that will drive solid growth over the next five years,” predicts Doskow. “The Internet and mobile technologies are empowering consumers to be even more aggressive in their product and price comparisons and driving marketers to deliver value-based products to meet these demands.”