The beauty / cosmetic industry has seen a vast number of changes in the way products are branded, merchandised and sold. There are some trends that currently stand out but it is certain that more trends will emerge.
As well as more conventional methods of browsing and purchasing beauty products, shoppers are either “pre-shopping” online then coming into store to collect goods or are buying direct from the online retailer. Click and Collect or Buy online, pick up in store (BOPIS) is becoming increasingly popular. Where will the stock need to be? How much of each line needs to be in the actual store or in a warehouse servicing on line shoppers? Price comparisons are easily made while browsing and sites such as Price Spy enable the customer to make quick comparisons, what is the best price for the product in your store?
Successful influencer marketing increases loyalty and exposure – vital assets for any business. Social media sites like Snapchat, Instagram and Facebook are particularly useful for fashion retailers and businesses in any other design-oriented industry when it comes to raising awareness of the product. Fantastic.
But how long will it stay on trend? What will the cannibalization be to sales of other SKUs? How do you make longer term fulfillment or supplier decisions?
Millennials are less likely to be confined to the big brands when it comes to beauty products, indie beauty brands are becoming more and more popular. Gone are the days of cradle to grave loyalty to a brand. A typical millennial is likely to jump from one brand to another and typically uses up to 3 times more product than consumers from the previous generation. The point is the consumer is being understood better than before by all competitors.
Utilising the processing and predictive capability of AI, you can accurately forecast several SKUs based on several scenarios. Most commonly, this is to anticipate inventory management needs and dynamic pricing opportunities. In fact the shorter the supply chain, the less of an excuse a beauty retailer has to start predicting sales immediately.
Though capturing the fast moving trends and patterns of shopping behaviour will allow retailers to position themselves appropriately, particularly for new product introduction. No more waiting for weeks worth of data to understand the marketplace. Within a day (or by the minute), good forecasts can be altered to reflect the sometimes subtle changes and allow a retailer to position themselves for optimal sell through. That includes the spikes which seasons, limited edition products, and social media surges bring.
The whole right place, right price, right product… is now just becoming a mere saying when AI can hyper optimizing the fast moving world of beauty and cosmetics.