A report has predicted that global beauty sales could see a potential 50 percent growth in the next 10 years due to increasing sales from emerging markets.
Fung Business Intelligence Centre’s Global Beauty Report said global beauty sales, already an almost US$400bn market, were on the verge of explosive growth as developing regions increase their average per capita spend.
Executive Director-Head of Global Retail and Technology Deborah Weinswig said, “Expect major consolidation and channel switching in less mature markets.”
The key measurement is spending per capita in the three different types of markets: mature markets of North America and Western Europe where spending is high; developing markets where growth has already started; and emerging markets such as Africa and much of the Asia-Pacific region.
Spending in the sector rose by 3.6 percent globally in 2014, driven primarily by growth in the Asia-Pacific, Latin America, and Middle East and Africa regions.
The report states that in mature markets, the pressure is on established brands and retailers to build deeper connections with shoppers to strengthen perceptions of value and cultivate loyalty.
It says that social media and a more informative and interactive web experience can be invaluable, as can loyalty programs and an improved in-store experience.
“Beauty tech provides the personalised experience that most women desire when purchasing cosmetics and other beauty products – and that even a beauty advisor in a store may not always deliver,” Weinswig commented.
The use of apps which can detect skin tones and recommend appropriate makeup shades or types of cosmetics based on uploaded photos, as well as the maximizing of available marketing technology, will all contribute to building beauty brands’ relationships with customers, according to the report.
Weinswig said, “Modern store formats and strong own-brand lines will be among the principal weapons in the battle to win share in immature markets. Small mom-and-pop retailers will struggle to compete on these elements.
“But we think retailers should consider going further, leveraging e-commerce, technology and the in-store experience to win customer loyalty and build market share.
“Implementing innovative in-store technology will not only help build a competitive advantage, it will help retailers gain first-mover status among smartphone shoppers in Latin America and Asia-Pacific.”