E-commerce in the Beauty & Personal Care Sector

Year after year, companies in the Beauty & Personal Care Sector are making more and more profits. We buy these types of products for our own pleasure, out of necessity, or as gifts for loved ones. For holidays, birthdays, anniversaries and more — they’re a great alternative to meaningless gifts that someone will throw into the corner and forget about. Among other reasons, this industry is not losing its popularity. The main group that most often uses products of this type are women. However, men are now also becoming an increasingly important group.

The revenue in the Beauty & Personal Care market could be worth as much as USD 518,146 million by 2021. The market is expected to grow at an annual rate of 5.54% (CAGR 2021-2025). Interestingly, by 2021, around 22% of the total market revenue was generated by e-commerce activities.

During the pandemic period, numerous restrictions were put in place. Some companies had been operating online for a long time, but more of them were forced to move their operations online. Some of them felt it only a little bit, others faced quite a challenge. It required adaptation to different conditions, a different mode of operation and a completely new strategy. e-commerce has undoubtedly become the default sales channel, and at the same time the place of strong and growing competition.

Notable Consumer behavior

The Beauty & Personal Care Sector is quite unique. It can provide a serious challenge for e-commerce companies. Beauty & Personal Care products are largely based on the senses: sight, touch and smell. Because of this, online retailers often face complications. So how do you make online stores work almost as well as traditional shops? Technology comes to the rescue here. And more specifically Augmented Reality (AR) applications, such as ModiFace, YouCam. Thanks to them your client can “test” makeup products in a virtual environment even before the purchase! Technology is making it possible to recreate the in-store experience.

Buyer-Friendly Return Policy

Customers may not be sure if a given product meets their expectations. So you can clearly communicate that they can easily return the product. If you have a free shipping option – let them know about it. Specify the return period – you can also add step-by-step instructions. This can convince your customers to buy with confidence. A buyer-friendly return policy can be the key to increasing sales. And the products… your customers might just like it at home.

Social Proof

Something that undoubtedly influences customer purchasing decisions is Social Proof. A person who doesn’t know what decision he should make relies on other people’s (in this case, users) opinion on a given topic. In addition to the traditional user ratings and comments, you can add several other options to your site: a preview of how many people are viewing a product, a “trending”” label or information about the “last items” of products. Cooperation with influencers works on similar principles. Users receive confirmation from experts that the product is great and make their decision.  Interestingly, the Beauty sector was one of the first sectors to use Influencer Marketing. To this day, it is still an important part of e-commerce company strategies.

Trends

Additionally, the Beauty & Personal Care Industry is mostly based on trends. Companies constantly keep track of the latest ones and introduce new products based on them. It is important to respond quickly to changing consumer preferences. When you meet their demands, they are more likely to stay with you for a longer period of time, thus improving your bottom line.

edrone customer outcomes

We created the edrone system, among other things, to help online store owners obtain better results using our tools. We analysed what influence edrone tools had on the results of our clients from Brazil, Spain and Poland. We took into account stores from the Beauty and Body Care sector and the period from January to June 2021.

After analyzing the data obtained from our customers, we got great results. Our clients’ customers are spending more and choosing to shop significantly more often. Companies reported an average of 22.1% of revenue that was directly related to using our system. For example: for every $100 earned, $22.11 came from edrone functionality!

Now let’s look at some metrics:

• Open Rate: This rate averaged 32.9% for Marketing Automation and 10.6% for Newsletters.
• CTR: The average click-through rate for our clients was 7.12% for Marketing Automation and 0.93% for Newsletters.
• Conversion Rate: 2.07% for Marketing Automation and 0.16% for Newsletters.

We also identified the Top 5 Automation scenarios that our clients in the following industry used:

• Recover Abandoned Cart – Cart abandonment is probably one of the biggest challenges faced by e-commerce. In fact, carts are abandoned in over 88% of all online purchases, accounting to literally trillions of dollars in losses! This happens to all e-commerce operations, and some just accept it as part of the business. But not you! With edrone, you can do something about it.
• Restore Viewed Products – Online shopping is becoming increasingly popular, but at the same time, shopping sessions are getting longer, sometimes spanning multiple visits. A consequence of this trend is the need to occasionally “remind” potential customers after they visit your online store. edrone is here to help! Using the Viewed Products scenario, you can send automated reminders and personalized product suggestions to customers who have recently viewed products in your store.
• Recommended products – Understanding a customer’s needs in an online environment is quite a challenge, as you can’t read their body language or ask open ended questions (for now). However, e-commerce does have a big advantage over brick-and-mortar retail: data! By collecting information about which products the customer has previously viewed, added to cart or even bought, it’s possible to gain an increasingly better understanding of their needs and interests, and recommend other products accordingly. That’s what edrone’s recommend scenario does for you, automatically!
• Restore Customer – We all know it is much more expensive to acquire new customers than it is to engage with existing ones. However, apart from increasing how much your customers spend, you also want to accelerate how often they buy. A great way to achieve this is using the Restore Customers automation scenario. With it, you can engage with customers who haven’t bought anything from your store for a long time.
• After Sale – Offering product recommendations, special sales and discount coupons are great ways to get clients into your sales funnel, but they also deserve attention throughout the sales process, including after they buy. And a happy customer is a recurring customer! Using edrone’s After Sale scenario, you are able to send automated messages that are triggered after a purchase. You might want to take this opportunity to send a simple thank you note, a special gift (like a discount coupon for a future purchase), or your latest content.

Ways to improve your own results

Let’s move on to the facts that you – as a Beauty & Personal Care store owner –might be interested in. In this sector, we have seen that Customer Loyalty is quite low. Only about 16% of customers return again to make another purchase. So what can you do to get customers to do it more often?

Make sure the Customer Experience is as good or even better than in a stationary store. Provide the right kind of communication with your customer so they can always ask you a question or ask for advice. You can use the chat option where you will have an overview of your customers’ browsing histories. Based on this data, you will recommend appropriate products. Don’t forget about segmentation! Proper grouping will help you create personalized content for specific audience groups.

To encourage customers to stay with your brand, you can offer them rewards for their loyalty: special discount codes, Refer-a-Friend Program refunds, and more.

If you run an omnichannel business, provide consumers with a consistent shopping experience. You can use BOPIS (buy online, pick up in store) or BORIS (buy online, return in store) options. Integrating an online store and an offline store can encourage customers to buy. Customers expect to be able to return goods in any way that is convenient for them. For example: if they bought an item online, they can return it in an offline store and vice versa. They can also verify the appearance, quality and price of a product viewed online in a physical store.

From a logistical point of view, this can be a challenge for companies, but isn’t it all about meeting the demands of their customers? That’s the bottom line.