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Digital Revolution in the perfume industry

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Digital Revolution in the perfume industry

“The new digital revolution allows international manufacturers to bypass intermediaries and distribution thanks to Internet sales.”
Some value chains have already been broken, as in the case of Nesspresso, which sells its coffee capsules directly in store and online, but is it always the best option for these international conglomerates to approach the customer and / or end Kenya Phone Number List directly in all of them? the product categories?

Let’s say that you have to take into account the type of consumer in each country, the history of that product category, its characteristics, the business ecosystem, the production and value chain … and before making any leap, you have to be sure that does not have an impact on the income statement, trust obtained by the client and business relationships of years, especially with the distribution, among other things.

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We are going to focus on the perfumery and cosmetics industry , as is the case with the food industry, it is based on brand automation, but large manufacturers control the market. There is also a clear differentiation between the mass Betting Email List (low-price categories that are normally sold in supermarkets and drugstores) and luxury (high-price categories that are sold in perfumery). The latter is the one that moves the large margins and also, as with the fashion industry, leads innovation. In other words, a great trend in luxury can then be taken to the mass market and easily copied.

With regard to the product on the shelf, in view of the consumer it seems that there is a great offer and diversification of products to choose from in the perfumery, but the turnover finally belongs to a few manufacturers that have the “know-how” of how to launch a fragrance or cosmetic product on the market from previous experience with agility. Even large fashion brands or celebrities make partnerships with these manufacturers and then manage their own launches.

To make us aware of this situation, Business Insider has just released a map that shows that the international beauty industry is in the hands of these mega-companies. It is inspired by a similar graphic that was shown in which the majority of food brands belong to 10 food companies (see cover photo).

At the national level there are more important players who also play in the international league Puig, Idesa, AcMarca, Bella Aurora, among others. And it is even stronger if we add the part of pharmaceutical companies that are also booming to have growth in the part of parapharmacy with suns, creams, makeup … since growth in the part of OTC (medicine industry) is more stagnant and legislated.

The question is: can the beauty industry go completely digital to gain share of sales like Nesspresso? In other words, go from one extreme to another and skip all the intermediaries?

In perfumeries, the commercial network is very important since in-store advice is key for sales and customer loyalty , they are a historical sales network and highly formed by the same manufacturers. In addition, the traditional sales network is key if we think that they are categories with seasonality due to the gift factor of Valentine’s Day, Father’s Day, Mother’s Day, only at Christmas around 2,000 new gift boxes enter each year and advertising on TV and online it skyrockets.

It must be taken into account that the great distributor in Luxury perfumery at the national level is the English Court (ECI) and this concentrates 30% -40% of the average sales of the Luxury beauty product categories. For us, seeing the first floor of the ECI filled with spring or autumn fragrances is already part of normalcy when we go down the street, and it is a sign in everyone’s mind for some dates. In my opinion, skipping the perfumery distributor would be today, it would be like skipping Mercadona in food.

Therefore, it is better that manufacturers and distribution continue to work together hand in hand, in win-win policies using the digital world as a lever to win sales, exchanging knowledge of databases to understand the customer / consumer and retain them, generating content that is attractiveness to their brands and new products, offers that are relevant for special moments, specific advice in the store … both have to continue working so that the online and off-line provide feedback in the most attractive way for the end consumer. As an example of these, one of the brands that is already achieving this is Khiels de L’Oreal.

 

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