Posted by Alex Jackson on 1st Jun 2018
Profits can come in small packages especially when it comes to cosmetics and other beauty products. The cosmetics industry is in the midst of a boom nearly doubling in size from the early 2000’s to a 300 billion dollar a year global industry. So, what is behind this massive increase and is their still room for growth for the independent retailer in this category? The answer is yes and here are few reasons why this industry is growing and how easy it is for you to tap into this growth.
Millennials are on the bandwagon- That often-derided and massive age group that has bucked practically all the norms of consumer spending habits have certainly not given cosmetics the cold shoulder. This age group has embraced the category in a big way thanks in part to social media sites like Instagram and YouTube which has transformed aspiring makeup artists into celebrity household names. If you want to tap into that key demographic of consumer, the millennial generation you want to turn your focus to cosmetics.
New demand from emerging markets- Another big driving force behind this rapid growth are emerging overseas markets. Demand is skyrocketing in markets like China and India where a burgeoning middle class is demanding a variety of consumer goods like cosmetics. What may surprise the average seller is that they actually prefer to buy from the U.S. for fears of domestically produced knockoffs or for quality issues from domestic goods. These consumers either purchase directly or via a third party who then processes and ships the items overseas. This practice has become so prevalent in China that it even has a name Diagou which translates to the overseas personal shopper. Long story short, it’s a global market and as a seller you need to be in on the game to cash in on the sales.
Men make up a large and growing portion of these sales- Although late adaptors to health and beauty in general, men are now embracing a daily regimen of these skin care products such as face washes, moisturizers, and even some cosmetics. In short there is ample room for more growth. Health and Beauty products are not bound by sex or by age they are one of the few categories of merchandise with universal appeal.
Easy to sell, easy to incorporate into your existing business- we have looked at some of the reasons behind the growth but now let’s look at how you can incorporate health and beauty items into your retail business. For starters, health and beauty products can be easily incorporated into a traditional retail environment they take up a very small portion of retail space and can also be easily sold online. These goods have a lot of appeal to online sellers they are easy and cheap to ship, easy to store and can be turned quickly creating that constant stream of sales that every business desires. No fears of getting that “it just doesn’t fit” email, with health and beauty another big benefit is that it doesn’t suffer from drops in seasonal demand, after all you are using these products year-round. However, health and beauty products often have expiration dates. Something to keep your eye on!
Want to appeal to that generation that’s coming into its spending prime? Or to the millions of overseas shoppers clamoring for goods from the U.S. or just something the guys dig too? Then consider health and beauty a category with universal appeal.