Today’s consumer is relying on the internet for almost everything, from searching about their personal care needs to purchasing high-value products. With the progressing change in how today’s consumer is perceiving the beauty and personal care segments, brands are now keen on catering their products and services on digital buying channels.
With the onset of the pandemic, it has become more apparent for beauty brands to hold a strong digital presence, especially in commerce operations. The scenario presented beauty brands with a chance to reach their online audiences with seamless digital experiences by adopting D2C and marketplace models.
The D2C Model: A Must & Should For Beauty Brands
In recent times, there is a significant increase in the D2C sites of beauty brands, which are determined to capture their online audiences. In fact, disrupting the traditional brick-and-mortar model with the D2C strategy has now become a compulsive strategy rather than a choice for many homegrown brands to deliver a personalized shopping experience to the consumer.
While the manufacturers have little control over creating and nurturing their relationships with their consumers in the traditional beauty retail model, the D2C model is enabling the beauty brands to directly influence sales, collect consumer data, analyze their needs and build a loyal consumer base with a more personalized messaging to their audiences without the involvement of third parties.
Besides establishing their authenticity, brands are delivering value-adding engagements by understanding their consumers’ pain points closely with the D2C approach. Most of the beauty brands are offering virtual try-on features, skin or hair analysis quizzes, loyalty programs, in-store promotions, subscription models, and other interactive methods that bring in personalized product experiences for the audiences on their D2C sites.
Marketplaces: The Online Growth Boosters For Beauty Brands
Besides D2C sites, marketplaces such as Amazon, Flipkart, Nykaa. are increasing their contribution to online sales massively in many markets across the world. And, it's no surprise that more beauty brands are now contemplating capitalizing on online marketplaces as a part of their brand strategy.
While many beauty brands find the lack of brand experience in such marketplaces, it's important to consider the ability of these marketplaces in enabling the brands to reach their international audiences with cross-border selling that takes minimal efforts, which otherwise might have needed a localized strategy.
Especially, the pandemic crisis has taught many brands in the beauty industry that having online sales channels is crucial to remain afloat. While reaching the digital audiences with D2C sites may take some time, brands are leveraging the marketplaces instantly to maximize their distribution and sales.
The Growing Demand For Digitalization
High-quality internet connection, lower data costs, increase in digital mode of payments, etc. are driving the digital economy in India. E-commerce channels are maturing in India and are now holding a massive share of revenue generation for FMCG brands.
According to Avendus, there were around 25 million online buying consumers in the beauty segment in India in 2020, which is estimated to reach 135 million by 2025. Realizing the vast growth opportunities of online direct selling and marketplaces, the beauty brands are accelerating to capitalize on e-commerce strategies that are aligned to consumer behavior online. During the lockdowns, there was a spike of 94 percent in D2C websites while there is a 58 percent increase in marketplaces.
Also, the rise of innovative beauty startups in the online environment, which are addressing the shifting consumer preferences with customized beauty and personal care products, is pushing the digital transformation of beauty brands to stay relevant and aligned with the changing demands of the consumers.
Even though life resumes in the post-pandemic scenario, consumers have got a taste for convenience and are more likely to continue purchasing beauty products online. This online disruption will be here to stay for luxury as well as affordable beauty products alike, which demand the brands to come up with strategies that enrich and optimize the online experience of their consumers.