Beauty and the sharing economy: what’s the future?
The sharing economy model holds opportunities for beauty when it comes to offering curated and flexible retail and distribution models, according to the company.
“Digital marketplaces built on authenticity and a unique assortment have more than proven their worth and resilience,” a blog post by analyst Hannah Symons explains.
“There should be scope for professional expertise to be utilised as a selling tactic [...] especially as choice becomes even more overwhelming in saturated beauty markets.”
On-demand apps
On-demand apps linking beauty service providers with consumers offer a curated distribution channel that naturally lends itself to supporting burgeoning, independent brands, but according to Symons, there are opportunities here for more established brands too.
“Distributing through on-demand apps could prove lucrative for emerging players by associating their unknown name with a professional recommendation, whilst also benefiting from the trend for experience as a means to possession,” she explains.
“However, for heritage brands, this means of distribution could assist in tapping into new markets, particularly a younger demographic who are increasingly discerning and likely to scrutinise the efficacy of products.”
Responsive and local
The analyst suggests that looking ahead, the apps are likely to develop further by leveraging local networks and logistical ability to distribute products as well as services.
“For emerging brands, a convenient and hyper-localised delivery model remedies the issue of limited resources and budget, which are often a barrier to catering for either large or time-constrained orders,” Symons says.
“Meanwhile, many national or global players have similar problems owing to their large scale, which doesn’t allow for flexibility in the ordering process or personalisation in service.”
How can this be scaled?
Consumers are increasingly demanding personalised, curated beauty retail experiences, which the on-demand distribution model, powered by apps, allows.
However, there is currently a hurdle for brands when it comes to scaling up these models.
“When it comes to subscription boxes, often the scale on which many companies operate dilutes the effectiveness of curation. This results in wastage as subscribers receive products they don’t want or need, conflicting with a key driver of the movement of scaling back to achieve lightweight living,” Euromonitor explains.
The solution for this inefficiency of the sharing economy when applied to beauty, Symons suggests, may be found in the sharing economy itself.
“The Aftermarket is a new online marketplace that facilitates a peer-to-peer transaction for subscribers to sell unwanted and unused items from their subscription boxes. The site’s founders saw a growing need for the service considering the huge numbers of beauty box subscribers yet the near certainty that these subscribers did not always receive suitable products.”
It remains to be seen how the wider industry will adapt and profit from the opportunities offered by a responsive, flexible distribution model offered by the sharing economy, the Euromonitor report explains, but savvy players are already working to use it to their advantage.
