BW Confidential - Issue #8 - October/December 2011 - (Page 62)

Retail credit: stockxchng E-commerce Web of opportunities The internet is segmenting into a range of new selling channels. BW Confidential evaluates some of the emerging web platforms brands could take advantage of by Oonagh Phillips nternet sales are still a small part of the beauty market. In the US only 2% of beauty sales are done in the channel and in the biggest category for e-commerce— facial skincare—the internet only accounts for 4% of business. Many beauty executives feel the channel will remain small and will never really catch on for categories such as fragrance, where there is a clear need to smell and test the product before buying. But beauty is unlikely to remain untouched by e-comInternet’s share of US beauty sales 2010 Category Facial skincare Facial make-up Fragrance Total beauty Source: Kline & Co I merce. Several years ago the fashion industry thought itself immune to the rise of web sales given the need to try on clothes Several years ago fashion thought itself immune to the rise of web sales given the need to try on clothes. Despite this, many fashion brands are doing a good e-commerce business and see the colors and fabric in the flesh. Despite this, many fashion brands are now doing a good e-commerce business. And if there is one category where the need to try a product is essential it is shoes—but look at the success of US-based footwear e-tailer Executives should also take note that other industries have been turned on their heads by the internet, including publishing, book-selling and music. Some retailers are even now also looking at downsizing their stores because of the web. In the US, both electronics retailer Best Buy and office supply chain Staples have said they will trim the size of their stores due to increased competition from internet merchants. Small, but growing Beauty executives may perhaps be more convinced by the argument that, although small, sales over the internet are showing high growth rates. Market research company Kline & Co says that online beauty sales saw a CAGR of 26% between 2005 and 2010, compared to overall market growth of 1.7%. Kline also predicts that the channel will grow by 10.6% between now and 2015. It’s also thought that as % of beauty sales done over the internet 4.0 2.5 1.5 2.0 62 October-December 2011 - N°8 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #8 - October/December 2011

- Brand & retail news recap
- Companies on the move
Take note
- Market facts, figures & trends
Best of BW
- Highlights from our e-publication
- The latest in fragrance, skincare & make-up
- Estée Lauder Companies group president international Cédric Prouvé
Insight: Fragrance
- Category overview
- Retailer roundtable
- Retailing strategies
- Rare fragrance brands
- Launch roundup
- Spa chains
- Spa case studies
- E-commerce
- Store concepts
Travel retail
- Sector analysis
- Hainan & China Duty Free Group
- Retail concepts
- Passenger habits
- Industry experts on harnassing the power of social networks
- Six up-and-coming beauty brands
Market watch: Russia
- Country overview
- Prestige retailing
- Industry viewpoint
- Market outlook
- Sustainabilty
- Trends
Last word
- Buyology Inc president & co-founder Donna Sturgess

BW Confidential - Issue #8 - October/December 2011