Humans are visual creatures. We make a lot of decisions based on what we look at. People are obsessed with beautiful things and beings. And it makes more sense when you get to know that the history of makeup and cosmetics spans at least 7,000 years and is present in almost every society on earth.

Makeup and cosmetics have always been a successful product segment of eCommerce. But, the global beauty industryhas been shaken by the COVID-19 crisis and this is how the industry is responding to it:

  • Brands like AVON donated $2 million worth of essential personal care and hygiene products soaps, body wash, to limit the spread of COVID-19.
  • Many leading brands like Kylie Cosmetics have announced the production of hand sanitizers.
  • Various live events planned by the industry players were replaced by virtual events. For instance, attendees of the Marc Jacobs Fragrance launch party for its Perfect Fragrance on August 26could watch a musical performance, get their portrait drawn, have their photo taken by a fashion photographer and participate in an experimental art project — all from their couch. How cool is that!
Source: Glossy.co
  • Several brands like Sephora, Ulta and other beauty brands shuttered stores and shifted online as a result of Coronavirus disruption.

The Rise, Fall & Rebirth of the Online Cosmetics Industry

Last few years have been very significant for the beauty and cosmetics industry. According to Statista, in 2017, U.S. e-commerce beauty sales grew by 1.6 billion U.S. dollars while brick and mortar beauty sales decreased by approximately 168 million U.S. dollars.

Year 2017 was an indication of how rapidly this industry is going to grow. Further in 2018, the global cosmetics industry grew by an estimated 5.5 percent compared to the previous sales year. But how did that happen?

Convenience is considered as the king of the retail world yet many other factors were responsible for the spike in online sales of makeup and cosmetics. Let’s explore a few:

Beauty Box Subscriptions

One of the most innovative and exciting additions to the online cosmetics industry was beauty box subscriptions. In exchange for a fixed monthly fee, brands like Birchbox and Ipsy will regularly send a box of mystery cosmetics. It was done in order to give the customer a chance to try out products they probably would not have purchased on their own. The best part of these beauty boxes is that the total value of the box often exceeds the monthly fee.

Social Media Influencers

Social media plays a very important part of cosmetics shopping. Beauty brands such as Kylie Cosmetics, Huda Beauty, etc have a huge following on social media platforms like Instagram, Twitter, and Facebook. Social media influencers act as a powerful source for promoting these products and surprisingly, the Coronavirus outbreak has also proved how important influencers are to the beauty industry.

Unfortunately, in the year 2020, the sales of cosmetics slowed down for the first time because of the pandemic. But the industry is getting back into the game as the shopping behaviour of the consumers has evolved. The economic and societal impacts of COVID-19 are expected to be massive by the end of 2020, with the beauty industry experiencing rapid shifts in buying patterns, channel activity and consumer needs.

Let’s take a look at the roller coaster ride of the U.S. prestige beauty market to understand the scenario (source: cosmeticsandtoiletries.com):

  1. In January-February 2020, the U.S. prestige beauty market was up $78 million year-over-year, per NPD data.
  2. By March-April that gain had been erased, producing a year-over-year sector decline of $1.4 billion.
  3. A drop of $850.8 million for the May-June period.
  4. In the second quarter of 2020, NPD reported that U.S. prestige beauty sales totaled $2.8 billion, a -36% decline compared to the same period of 2019.
  5. Online sales spiked 90% in the quarter, representing about 61% of industry sales volume.
  6. As of Q2, the online channel comprises 70% of the market share.

Coronavirus Impact on the Online Cosmetics Industry

Here I am listing some of the emerging trends amidst COVID-19 outbreak that have acted no less than the rebirth of the beauty and cosmetics industry:

Demand for Personal Care Products is Rising

Proactive personal care is on rising due to fear of COVID-19 spread. According to GlobalData Covid-19 data, 43% Australians, 74% Chinese and 82% Indians expect brands to provide tips on personal health and wellbeing.

Skincare Products are High in Demand

As the demand for self-care products like hand wash and sanitizers are on the rise, as a ripple effect, skincare products are also high in demand. Fear of the side-effects due to frequent use of hand sanitizers and disinfectant has led to this increase.

Beauty at Home is the New Norm

As people avoid going out for beauty treatments, the beauty brands have grabbed this opportunity to extend their services at homes. They are offering e-booking of the services and the customers can seek consultation and services from the comfort of their home.

Contact less Packaging & Delivery

With the growing obsession of hygiene, cleanliness and immunity among consumers, beauty products are now packaged in ways that reduce risks of contamination and offer long shelf life.

So, if you are someone who is planning to invest in this niche, make sure that you take all the above-mentioned factors into consideration. Moving forward, let’s explore the business model and the important features of an online cosmetics marketplace.

Related: Customization and Personalization of Online Cosmetics Marketplace

How to Start an Online Cosmetics Marketplace?

If you want to learn how an online cosmetics business works, you need to have an in-depth understanding of the business model of the eCommerce cosmetics marketplace.

Here is the pictorial representation of the business model of an online cosmetics marketplace by FATbit Technologies:

Take a look at some of the market players from this industry:

  • Giella Customization
  • Function of beauty
  • Unique fragrance
  • I love skin inc
  • Esalon
  • Insitu

If you want to build a marketplace similar to any of the above, you can easily do it by using a readymade solution like Yo!Kart. Developed by FATbit Technologies, Yo!Kart has served 1000+ clients all across the globe from various niches like fashion & apparel, liquor & wine, grocery, etc.

Go Ethnyk, Luxembourg is a prospering Cosmetics Marketplace powered by Yo!Kart. It was launched with a single aim to offer sellers of all ethnicities a chance to sell more without paying hefty subscription charges. Retailers can create a new store with just a few clicks and enjoy optimal visibility on Go Ethnyk.

Must Read: Online Cosmetics Marketplace Powered By Yo!Kart

Wrapping Up

2023 has been a roller coaster ride for the beauty and cosmetics industry. But the good news is that the customers are now switching to online modes of shopping. With this shift in shopping behaviour, many doors have been opened for aspiring entrepreneurs.

You can address the pain points of the customers and introduce innovative ways of providing customer satisfaction. You can take assistance from the industry experts to understand the industry trends and launch a fully customizable eCommerce marketplace. The benefit of a customizable and scalable marketplace is that you can integrate more features and tools in the future according to the demand in the market.

Originally published at: https://medium.com/@akankshachandan/how-to-sell-makeup-and-cosmetics-online-in-2020-778007387d44