Online Customizable Cosmetic Industry: Analysis & Features

Online Customizable Cosmetic Industry: Analysis & Features

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American professional makeup artist Bobbi Brown recently quoted that ‘personalized beauty is about each woman being able to create her own makeup routine that compliments her coloring and style.’ The latest evolution in the cosmetic industry is now bringing forth beauty products that can be made right from scratch.

Given the fact that the beauty industry hasn’t really evolved much in the past few decades, many online cosmetic companies are now giving audience something unique to look forward to. Most beauty brands haven’t yet caught up with the online customized cosmetics demand. However, many companies are now trying to rise to the occasion by both in-store and online custom services. Online customizable cosmetic industry has become one of the business models that are gaining a rapid popularity.

Women and men all over the world find it hard to come across products that work well with their ever changing skin and weather conditions. With new extraordinary innovations, brands are now able to design products that their customers exactly need, be it a true match foundation matching your skin tone or a particular hair color matching your eye color.

Business Model for Online Customizable Cosmetic Industry

Companies selling online-only personalized beauty products work on the manufacturing business model, providing B2C services.

The direct selling structure compresses the distribution channel. These online companies allow users to design their own cosmetics by choosing the active ingredients and other components of the product in question. Below is a stepwise description of how customizable cosmetic websites usually work.

Online Cosmetic BM

  • The customer begins by registering free using their email or other social media accounts.
  • Next comes a quick online questionnaire or consultation that can help you determine the exact active ingredients to combat you skin/hair problem. This step is never mandatory, but is to educate the audience about the variety of options available in a selected range.
  • You can now start customizing your product by choosing different parameters for customizing your product. Select a base, and other extracts followed by adding coloring and scents to your product.
  • Add the final product to the cart and then proceed to the checkout page where you fill in delivery details and make the payment using any preferred platform, be it digital wallet or payment via a credit card.

Also Read:  How Ecommerce Stores Can Target Different Customers

Major Players

1. Iloveskininc.com

Founder –Sabrina Tan

Founded in -2008

Based out of –Singapore

What they do –Privately held company, probably the first to get into beauty product customization. They provide in-store and online skin supplement bar featuring activated serums patented by the company in Japan. Having won more than 100 awards, SkinInc has more than 350 distribution outlets across the globe and they also provide worldwide shipping.

2. Functionofbeauty.com

Founders –Zahir Dossa, Joshua Maciejewski and Hien Nguyen

Founded in –December, 2015

Based out of –Stamford, Connecticut, USA

What they do –This startup specializes in customized hair products that include shampoos and conditioners. You can make your own products after answering a descriptive questionnaire, aimed at helping you concoct the best recipe for your hair. They currently ship only to the USA, Puerto Rico, Virgin Islands and Canada. The company received a funding of $9.5 million in March, 2017 by GGV Capital

3. Esalon.com

Founders –Cory Rosenberg, Francisco Giminez, Omar Mourad and Tamim Mourad

Founded in -2008

Based out of –Culver City, California, USA

What they do –Foremost providers of customized hair color online, start by choosing your hair type and also factor in any previous color applications. Save your profile as it is easier to order a refill later on. Esalon.com started with hair color customization service back in 2010 and now they provide worldwide shipping, free on all orders above 30$.

4. Insitu.me

Founder –Maria Salichou

Founded in –June, 2011

Based out of –London, United Kingdom

What they do –British skincare brand providing a range of comprehensive face, eye and hair beauty products. Choose from parameters like skin tone, age, skin sensitivity, texture and time of application to get products tailored specifically for you. They also provide worldwide shipping.

5. Freshistry.com

Founders –Bhakti Arora, Sam Panwar & Surya Masih

Founded in –March, 2017

Based out of –Panchkula, Haryana, India

What they do – This website allows users to customize creams and cleansers right from the choosing the base suitable for your skin type to adding a unique fragrance to your product. Choose from four available products: cream, lotion, face and hair cleanser.  They currently ship in India only.

Planning to launch your own online marketplace for customized beauty products?

Revenue Model for online customizable cosmetic companies

Primary Revenue Channel

Companies selling personalized beauty products online work on a simple sales revenue model. This online distribution system allows wholesalers and retailers of goods to target their customers and sell their products online.

Also Read: Choosing an Ideal Revenue Model Suitable for Your Online Business

Secondary Business Channels

Here are other features that some of these online customizable cosmetic companies often use to generate additional revenue. These include:

  • Subscription– Most retailers provide their customers with 3 or 6 month subscription programs. In case you find your customized product suitable, you can also order refills of your unique blend repeatedly.
  • Apparels and Merchandise– You can also make customized merchandise such as fridge magnets, bag tags and a lot more along with apparels and pitch them to your audience.
  • Advertisements of related items– Commissions from advertisements of related items such as hair color applicator can also open up a secondary revenue channel for you.

Basic Features of Online Customizable Cosmetic Companies

Online personalized beauty product sellers mostly provide face, eye, body and hair care products that can be customized according to the user preference. Here are a few critical website features that a personalized beauty product website must always possess to ensure more sales:

Free Sign up –Users can start by registering for free with their Google, Microsoft or Facebook account. This helps the manufacture gather more information about every customer. Once logged in from a specific account, users can start browsing through the various products and services available on the website.

Free consultation –Post registration, it is advisable to provide customers with a hair/skin quiz that can help them identify conditions that they want to improve by using the beauty product. Not only is this beneficial for the seller, but the user also gets a clearer picture of what they want to order. This can eventually help them pick the right raw materials when synthesizing their final beauty product.

Selecting your product type –Customers can now move on to selecting a specific product (creams, lotions, hair colors, lipsticks and eye shadows, shampoos and conditioners etc.), that they want to customize for themselves. They can then move on to the next process where they select specific parameters to design the selected product.

Product specification –Depending on the product type a user selects to customize further, a step wise form helps customers choose specifications and fabricate their own product. During this process they can choose from a variety of cosmetic bases, herbal extracts, additives from different hair & skin goals, a fragrance and color to create their unique product. You can also get any name printed on the label of the product to add a final personalized touch.

Integrated Payment Gateways –Providing your clients with various secure platforms to pay with, helps them navigate through the payment process easily and quickly. Make sure you accept all major debit & credit cards, PayPal, digital wallets & cash on delivery (where ever possible). This eases user experience making it more thoughtful and less time consuming.

 Treatment Focused Packages –Most retailers do provide product bundle packs at more economical rates. These target specific beauty problems like wrinkles, acne, hair fall and dandruff. Users also can avail discounts as these come in big packages with multiple products. This is an extremely beneficial option for confused customers who may be skeptical about trying a new self-designed beauty product.

Track your order –It is always recommended to provide this service to all your clients be it paid or free delivery. This way a customer exactly knows where their parcel is and by when will it get delivered!

Blog & FAQs –Although providing your customers with a blog and answering their queries on your website may not generate you any extra revenue, but in the long run these definitely help increase the credibility of your website. An active blog will keep customers hooked to your website even if they don’t always want to make a purchase. This also makes clients feel that the service provider takes genuine interest in the wellbeing of their customers rather than just making profits via sales.

Reviews –Reviews directly help build the credibility of a site. Genuine feedbacks convince new users about the effectiveness of a product. A manufacturer has to give people a reason to buy a product from their online store rather than picking it off a shelf in a physical market. Reviews certainly help convince customers to try your product instead of opting something they always use before.

Shipping Area and Costs –It is always safe to mention how shipping works for different users across the globe. It is recommended that you mention clearly to which countries you provide international shipping to. Stating the shipping costs and other related costs separately makes sure that only a relevant order is placed on your website. It is also important to mention the specific areas where delivery is currently available.

Looking to invest in the online beauty retail industry?

Points to Consider

The idea of brewing your own beauty products does seem very 21st century like and creative, but it does comes with its own setbacks.

Time Consuming –Such products are made from scratch and often need a steeping time so it may take up to two weeks for you to mail it to your customers. Make sure you educate your customers about the same. Setting the right expectations right from the beginning is crucial.

Beware of Allergens –Although almost all companies customizing beauty products boast of paraben, sulphate and toxin free products; they may contain some active ingredients that can cause irritation or allergies. This is always a risk, as there is no way you can try such products before purchasing them. The lack of a physical market does not allow the user to sample the product first hand. Instead they have to rely on reviews and testimonials when ordering for the first time. Ensure you mention this on your website as well as on the product packaging.

Shipping Issues –Most product manufacturers are based out a particular country and usually do not provide worldwide shipping. Even if they do, the shipping costs and time are too high. Sort your logistics right from the beginning so that delivering orders doesn’t stumble upon avoidable hassles.

High Costs –Customized products are sometimes highly priced especially when it comes to skin care. The first purchase, thus is always a risk as you have no idea how the product will affect your skin/hair.

No Refund –Because every product is made specifically for a targeted customer, it cannot be used by another individual and thus it can never be sent back to the company for a refund.

Information added can be misleading –Most such online portals require you to upload a picture for reference. Photos can be misleading at times as they might not reveal your original skin/hair color and as a result the customization will not produce the desired results.

Conclusion

If we look down the past few decades, the beauty industry has become bloated and there hasn’t been any change in the value chain either. With many newcomers in the online market, people can do much more by deciding what cosmetic they want to buy. Additionally, now they can customize every parameter of the product that suits them personally.

This is indicative of the fact that we have entered an age of e-retail where providing an easy online service isn’t enough anymore. It all finally revolves around providing the audience with an individualized experience.

Given the fact that there are not many such startups in the cosmetic industry recently, a personalized beauty product service is indeed looking towards a bright future.

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