How The Beauty And Cosmetics Online Retail Industry Needs To Adapt To The New Normal?

Naman Vijay Sep 25, 2020

The emergence of the COVID-19 pandemic has reshaped the world. Across industries and sectors, businesses have been forced to make difficult choices to survive in what has rapidly become the new normal. And perhaps nowhere has this change been more evident, and its impact more striking, than in the global online beauty industry.

Prior to the onset of the coronavirus, the sector generated an estimated USD 500 billion worth of sales annually. It also provided employment to millions across the entirety of the supply chain, from lab researchers and scientists all the way through to beauticians, stylists, and other vital contributors to the fashion industry.

But despite its previously recession-proof nature – attributable to high margins and habitual buying behaviours – even the world of beauty and cosmetics hasn’t managed to escape this current downturn unscathed.

According to a study by McKinsey, the majority of leading cosmetics and personal care players have reported weak first-quarter sales.

This sharp impact has been attributed to two key reasons: the disruption of existing supply chains and transportation networks, which has detrimentally impacted the import and export component of the sector, and a decline in product usage due to the home confinement of much of the customer base. These issues have been further compounded by widespread store closures, which has had a knock-on impact on the brick-and-mortar portion of the industry.

Despite this overwhelmingly negative prognosis, a silver lining has been noticed. While store sales have dropped, online shopping for beauty products has surged, with customers flocking to fill their shopping carts with protective equipment, skincare and hygiene products, and cosmetic wares.

Organic and natural products have proved especially popular with the young, internet-savvy and environmentally conscious consumer base. This upswing has further been driven by a new wave of online reviewers, stylists, and fashion experts, who cater to an audience with more time than ever before to spend online.

It’s clear that the global beauty industry has entered a new phase. Brands that are ready and willing to realign their focus to the online segment stand to emerge stronger than ever before, with a direct line to a large and loyal customer base.

But as brands continue to jostle for customer attention in a radically restructured world, only those capable of providing a holistic, and adaptable, retail experience are likely to come out winners. To that end, here’s how the industry will need to adapt to the new normal expectations of consumers:

Retooling the online shopping experience

The rapid spread of COVID-19, and the wave of lockdowns that have followed in its wake, have forever altered the dynamics and expectations of shopping. In-person shopping will now be accompanied by a lingering sense of unease, with consumers instead preferring contactless alternatives to the traditional retail experience. It is imperative that brands respond swiftly and decisively to these shifting norms.

This is best achieved by providing an online shopping experience that places transparency, intuitiveness, and availability above all else. By guiding a customer through a shopping experience, much as a sales assistant might in a brick-and-mortar establishment, a customer can be made to feel valued and noticed, even as they receive the guidance from an experienced professional they seek.

Streamlining and simplifying the return of orders

The traditional retail experience, especially in a country like India, has always been reliant on the touch and feel of products. This is especially true of the beauty and cosmetics segment, in which subtle variations in the shade, texture, and scent of items can only properly be gauged in-person.

With COVID driving the sales experience online, shopping for these items has become an exercise in uncertainty for many customers. As such, it is crucial that businesses approach this issue with understanding and empathy, and streamline the process through which customers can return items that don’t meet their expectations.

Typically, a consumer looking to return an item would need to repack it, reach out to the online store and then ship it to the address mentioned, which by itself can be an overwhelming experience. In the light of current events, beauty and cosmetics online retailers should facilitate initiation of returns easily via a branded online portal on the store, and reverse pickups.

Integrating customers into the delivery loop

Given the inevitable increase in order delays across multiple fronts, the order anxiety felt by many online shoppers has understandably compromised the online shopping experience. It’s no longer just about bagging a good deal, but also about how the customer feels from the point of purchase completion to the order being delivered. This is the period when most customers tend to experience purchase regret, leading to higher number of WISMO calls and RTO because they are uncertain about the order status.

Since beauty and cosmetics brands will fall under the day to day requirements for most consumers, switching to a competing brand will be more common now. That’s why brands will now need to integrate proactive communication with their customers post-purchase, especially about their order status.

This can be achieved in two ways. One, by setting up a branded tracking page on the site that the customer can use at any given point in time to see where the order has reached, instead of taking them to a third party courier partner site to do the same. Two, by automating order status notifications using a logistics intelligence solution which alerts them on both email and SMS.

Integrating proactive communication and easy tracking into the system will also help beauty and cosmetics businesses reduce their WISMO calls drastically, helping them optimize the costs of e-commerce operations.

Optimizing delivery times for maximum fulfilment and customer success

Most beauty and cosmetics brands tie up with multiple logistics partners for order fulfilment in various areas. Considering the drift towards online shopping, brands will also need to serve remote areas to make their products available to a wider consumer base. But more often than not, it is this partnership that causes delays based on the serviceability of the logistics carrier, fulfilment rate and available resources. The result of which are order delays or failed deliveries.

Beauty and cosmetics brands need to optimize their logistics routes, choosing the right partner for fulfilment for every order. This means tracking logistics partner performance, serviceable areas, order fulfilment and failure rate. E-commerce businesses must now invest in a logistics intelligence platform that comes with a recommendation engine, enabling them to process an array of carrier partner data, and ultimately choose the right partner.

This will enable optimized delivery times, further improving customer satisfaction.