Fact : the internet shifts beauty products

Although internet sales of beauty products remain relatively small,
growth for the retail channel far out-paced any other last year,
leading experts to believe in its fast-developing potential,
reports Simon Pitman.

As the US beauty market continues to grow at a small rate, increasing individual sales channels is becoming increasingly challenging. Not so for internet sales. According to The NPD Group's​ latest report, Emerging Channels: Beauty Care Products on the Internet​, women now spend an average of $83 per year on beauty products through the Internet, a significant increase from a virtually negligible base just a few years ago.

Indeed, the figure indicates that US women increased their spending on beauty over the internet by 38 per cent in the past year, significantly more than any other channel of distribution, including the fast-growing discount store category.

The company conducted a survey to discover how women buy their beauty and personal care products. As well as the internet, it considered television shopping as well as specialty stores, and according to the results the future looks brightest for internet sales. One in five women told NPD they intend to spend more over the Internet for beauty products over the next year than they did in the past, making it the number one ranked channel for future purchases.

"What may be even more surprising to many manufacturers and retailers is that the Internet has already surpassed some of the more traditional channels for beauty products in terms of future purchase intent, such as fine department stores, kiosks at malls and phone or mail order channels,"​ said Timra Carlson, NPD Beauty.

According to the survey findings, nearly seven in ten women said they found that buying beauty products over the internet was easier, while more than half said they were easily able to find the product they like.

Looking to the future of internet sales, over 20 percent said that the quality and of both the products and services had increased, leading 26 percent of respondents to state that they will be purchasing more products over the internet in the future.

"The Internet continues to gain prominence as an important player among the various distribution channels available to beauty consumers. The most telling indication of the web's growth and influence in the beauty category is the breadth of products available - everything from hair care to foot care, with products for every part of the body in-between,"​ said Carlson.

Initially internet beauty product sales tended to concentrate of designer fragrances, as many buyers discovered significant discounts. Indeed, during the vital Christmas period last year, Amazon.com revealed that the Britney Spears Curious fragrance was the internet retailer's top selling product.

But as internet sales evolve, so too does the product diversity. As part of its major turn around The Body Shop, which sells a complete range of cosmetic and personal care products, announced a significant investment in e-commerce channels last year. That investment is now starting to pay dividends, and is helping the company back on the road to financial recovery.

In the past 18 months the retailer has been reporting a slow turn around in its results, following a period of stunted sales growth and consequent losses. Indeed, in the US, internet sales were the driving force behind a small but significant profit reported for the 2004 financial year.

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