Beauty Retailing

Direct to the Top

The direct sales channel for cosmetics and toiletries has posted a compound annual growth rate (CAGR) of almost 6% over the last five years, considerably above the average all-channel growth rate, according to Kline’s latest Beauty Retailing USA report. Driving this growth is e-commerce, which has exploded with over 25% annual growth over the past five years.  Infomercials and home shopping networks also show robust growth.

Manufacturers’ Sales of Cosmetics and Toiletries in the Direct Sales Channel by Sub-channel, 2007 and 2012

Manufacturers’ Sales of Cosmetics and Toiletries

Manufacturers’ Sales of Cosmetics and Toiletries

Many retailers are dynamically acting to gain dominance in online cosmetics and toiletries sales, several of which are profiled in detail in this report, with sales and growth estimates. For example, Amazon has declared 2013 the year when it makes major advancements in the retailing of beauty. Amazon has transformed the shopping environment in almost every category it has approached, successfully chipping away from big-box retailers in everything from books to consumer electronics.

On the other hand, DermStore has always focused on the cosmetics and toiletries industry. focuses primarily on clinical and niche luxury skin care brands including: Jan Marini, Decleor, Skinceuticals, Glytone, Murad, Philosophy, Ahava, Elta MD, and Peter Thomas Roth. The company also offers brands that are specific to men, such as Anthony for Men, Grooming Lounge, The Art of Shaving, and Nickel. The online retailer is expanding in a different dimension. In 2012, DermStore opened a salon with spa services in Hermosa Beach. This location serves as the only bricks-and-mortar retail store for the company. Furthermore, Beauty Fix owned by DermStore offers a monthly sample box for $49.99 for a kit containing both prestige and mass products.

For a better understanding of what Ebay, HSN, Guthy-Renker, QVC, and other direct sellers are doing to succeed in this exciting cosmetics and toiletries channel, refer to Kline’s Beauty Retailing USA report.

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