A.T. Kearney press release
The strategy and management consulting company has released the "Beauty and the Beast" study on on-line cosmetics buying behaviours in France, Germany and Great-Britain, and their consequences for the manufacturers and distributors.
This study, performed on 4,000 people, shows that 40% of regular on-line buyers already buy cosmetics on the Internet. Perfumes, skin-care products, personal-care products and hair-care products are the categories the most often bought. Make-up is number three when considering only female buyers.
The respondents in this survey share their cosmetics buying 50/50 between retail shops and the Internet. The multichannel buying behaviour, thus, is now the norm for this category of products.
Amazingly, cosmetics on-line buying motivations vary only marginally as compared to the other products, while it seems that buying behaviours are very different (the need to “feel” and touch the products, a relationship with an advisor for selective and professional products, understanding of the advantages of the products, no way to send back a product once open, etc).
In fact, price, convenience and the possibility to get specific products are the three most often listed factors (price being, by far, the number one in France, contrary to Germany and UK, which favour the convenience of the on-line buying). These preferences do not seem significantly linked to the sex, the age or the household income.
At this stage, the elements linked to the expertise of the brands are not that important for cosmetics on-line buyers (advice by experts or consumers, diagnostic, sampling). However, some points are key elements, especially for “premium” brands. The “true” retail shop is still a valued channel for the consumers who emphasize the expertise of the brands; the development of these functionalities on the sites is likely to be a challenge for the distributors and the manufacturers.
Amazon is the main on-line distributor in Germany and UK, but only in the fifth position in France, where Yves Rocher is the undisputed number one. Considering the high-income on-line buyers only, Amazon is still at the top in Germany and UK, while, in France, Sephora is boosted to the number-one position.
“In front of a decidedly multichannel consumption, one of the critical challenges for the manufacturers and the distributors is to design a homogeneous brand expertise, on-line and in the retail shops, but also to innovate to benefit from the complementarity of the channels and of their specificities,” Samuel Cazin, the Manager of the French part of the study, says.
The study points out three commitments that the manufacturers and distributors should consider:
• Firstly, due to an increase of the on-line sales four times that of the entire market, manufacturers as well as distributors should define strategies for the on-line distribution specific to benefit from this growth without cannibalizing the other channels, or destroying value.
• Secondly, the manufacturers shall demonstrate that buying on-line or in retail shops provide their consumers with the same expertise from brands. This could be done, for instance, by incorporating some “e-category management” know-how. Further, distributors should also come with consistent offers. This implies to redesign the respective roles of their retail shops and of their sites, be they e-shops or no, as well as their complementarity and their specificities.
• Thirdly, the consumers’ expertise of cosmetics on-line buying is still short, as per the study. As a consequence, the consumers use only the basic functionalities of the sites (to say it, looking for the cheapest price) and overlook other aspects that could make for a difference in the offers, and which could help manufacturers and distributors to stay with higher levels of prices.
Obviously, the manufacturers do have an opportunity to benefit from the on-line experience, and not to think “retail shop” only. This is particularly important nowadays, as many actors of the e-commerce do not follow the rules about discounts and ads, are not always in line with what the brands think of themselves or with the values they support. More than the consistency of the brand, manufacturers and distributors will have to design their Internet sites so that the on-line buying is not based only on the price.
Peter Pfeiffer, the German partner of the study, concludes, “The cosmetics world, thanks to the peculiarity of the products, may benefit from the Internet to provide its customers with added value and to take advantage of the synergies of the multichannel way. E-commerce is still seen as “The Beast," which eats margins; well-established brands have entered this way of doing more for defensive reasons than for ambitious ones. Nevertheless, this is not enough. There is too much at stake for the manufacturers and the distributors if competition is about prices only.”
For further information
• Download the main results for France
• See the international version of the study on the A. T. Kearney website