More proof that internet beauty sales are really working

By Simon Pitman

- Last updated on GMT

Related tags: Cosmetics

Newly-formed makeup.com, an online beauty sales portal, is set to
make a significant mark on the US beauty retail landscape, as
online sales of beauty products continue to make a growing
impression within the sector.

With a simple, intuitive concept and a strong search engine placement with Google, the company looks poised to make a strong increase in sales, following its launch in June of 2005, according to a report from Beacon Equity Research.

A quick Google search on the word 'makeup' brings the company's website up as the first search on the listing, giving it an all-important head start in a market that is defined by how refined an internet key word search is.

Currently marketing its products in the US, makeup.com says that the eventual goal is to go worldwide, as it continues its rapid expansion.

Report author, Lisa Springer, says that the company, which is headquartered in Vancouver, Canada, has established a strong distribution network through its warehouses in Burnaby, but is now planning to establish a new distribution fulfilment house in Washington State to meet demand in the US.

The company first established itself as a discount retailer, but in May of this year, it went more up market, to include boutique cosmetic products, with names such as Bobbi Brow, Estee Lauder, MAC and Lancome included on its webpages.

But where it perhaps differentiates itself is the fact that it also offers discontinued colors and lines as well as lines supplied by boutiques, such as Cargo, Alison, Fusion Beauty and Paul Dorf, giving it a full selection of bath, body, hair care, makeup and fragrance ranges.

Technology has been crucial to creating a successful model for the company, as Springer explains: "Makeup Ince has made significant investments in technology to ensure the security and reliability of its website. The company uses an integrated accounting software system known as Navison to facilitate online transactions and inventory management, while five key metrics are monitored to measure website performance: speed, navigation, appearance, reliability, and information/content."

The makup.com business model relies on using its intuitive name to generate revenues and build a worldwide brand that will allow it to expand globally, targeting existing customers of sites such as Amazon.com and Ebay.

Springer points to the fact that growing internet penetration is likely to drive sales at the makeup.com to elevate its position in the market, having managed to launch its site and position it at a good time.

With online cosmetics retailing growing at the rate of 26 per cent a year in the US to reach $320m last year, combined with the fact that premium cosmetics and fragrances are showing some of the biggest industry growth, Springer believes that the company is well positioned to tap into these trends.

This position should be further strengthened by the fact that makeup.com benefits from low overhead costs, combined with the fact that the it has also developed strong customer retention programs and interactivity that aims to encourage repeat visits.

Although internet sales still only represent a small fraction of the total $235bn spend for cosmetic and toiletry made globally during 2005, the rapid growth in the internet and developing trust that consumers have in it, means that internet shopping through websites such as makeup.com looks certain to become a significant part of the retail landscape in the coming years.

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