Beauty Industry: One of a Kind in Retail Sector

By: Retail CIO Outlook | Friday, August 28, 2020

With the widespread digitalization in retail and the plethora of options, the rate of online purchases has started experiencing a paradigm shift

Fremont, CA: The beauty sector in the retail industry has seen massive innovation and entrepreneurship in the last couple of years. Innumerable brands have been launched to present an endless array of newer, more sustainable ingredients. A trend that has remained loyal to the beauty industry since its origin is the high sales rate in brick and mortar stores. Even though there are replenishment sales on Amazon and, Glossier has shown exceptional business online, the traditional model of going to a store to try out the latest product still dominates the industry. Unlike other sectors in retail, online purchasing of new products has not yet caught on in the beauty business. The industry experts’ opinions point out nothing but the difficulty to try on a product to check if it works for th

e client before a purchase is made. This has been the biggest driver and an added advantage for the brick and mortar stores. Beauty products’ suitability varies for each customer, which is why retail is one of the last industries to adapt to an online shopping exercise, even after its embracement by the customers at scale.

With the widespread digitalization in retail and a plethora of options, the rate of online purchases has begun to undergo a paradigm shift. The customers started relying on the brand names to find the credibility of the products. These c

ompanies are focusing more on selling direct-to-customer and depending less on retail stores for businesses. The new-age brands are strategically building awareness to generate revenue for faster scaling, even if the traditional retail has not been eliminated. Companies that include the feature of selling directly to customers in its structure are commonly known as "digitally naive." These are the companies that have made a difference by disrupting the legacy retail store selling.

The sudden development in the direct-to-consumer businesses is perceived to be an essential sign of transformation in retail for beauty products and established retail channels. Frisson Beauty, a new-age brand whose infrastructure is completely digitalized believes that many of these changes are “powered by AI, which is increasing personalization, all while focusing on the sample, personalization during sampling, loyalty/rewards, cross- and up-selling and promotions are all key to successful direct-to-consumer.” The biggest challenge for any beauty brand is to sell directly to the consumers without involving a retailer. To fulfill this agenda, new brands are recognizing a market that has been neglected or taken for granted by many majors, more established companies that are targeting their promotion at customers whose requirements haven’t been addressed. Those consumers are hyper receptive to the brand’s offerings because the message it portrays is focused on a particular area that they have been looking for.