Beauty Retailers' Formula for eCommerce Success
Personal care ecommerce sales are expected to increase by double digits through 2012. Everyone from pure plays like Amazon and Drugstore.com, to traditional retailers like Target and CVS, to department store brands like MAC and Clinique, to even mass brands like Neutrogena and Olay are trying to get a piece of the action.
So what's it going to take for these guys get a disproportionate amount of those online ecommerce dollars? Assuming the basics like security, privacy, and usability are taken care of. It comes down to three things: price, convenience and access.
Price
Don't fool yourselves -- this is the No. 1 reason consumers purchase products online. This includes all the statistics you read about free shipping being the top incentive for online purchases. It all comes down to absolute price. And when the next retailer is just a click away you can't win just on user experience. Many online shoppers use Amazon's in-depth product pages to research product information, then leave the site to purchase the item at a cheaper retailer.Convenience
After price, convenience is the hottest reason consumers purchase products online. The Web helps consumers find the right products for them, links products that have similar benefits, reminds them to replenish regularly-used items, etc. Which presents a tricky challenge for mass brands -- if your consumer is already shopping in a drug store or mass retailer once a month, why wouldn't she just purchase her beauty products while she's there? After all, the items are small, light, and easy to carry.Access
Lastly, access is the trump card. With 4,000 beauty brands in the United States, your local drug store, department store, and mass retailer combined only carry 200 to 300. The Web is pretty much the only way find those new or niche brands that don't have wide distribution. Brands and retailers can use access to products that a consumer would normally not be able to find as a way to capture and hold on to repeat customers.
So who's nailed a great balance of these three principles? Look at an adjacent category and you find Zappos, who has the largest selection of shoes of any online or offline retailer. They make it unbelievably convenient to purchase and return items. Plus, they offer competitive (but not always the lowest) prices.
The take-away here is this: Beauty retailers and brands who nail these three issues will win the bulk of the beauty ecommerce dollars moving online. Now, who's that going to be?
- Emrah Kovacoglu, Founder and CEO, Total Beauty Media, Inc.
