Sunday, November 28, 2021

Sampling Economics in Beauty

In order to promote their beauty products, brand manufacturers will give customers samplers. The volume of the sample is generally between 1ml-5ml (essence, cream), 5ml-20ml (toner, body lotion), 20ml-50ml (face cleanser, makeup remover), the main purpose is to stimulate consumers to purchase the complete versions after testing. According to NPDGroup data, the US makeup sampling market reached 1.2 billion U.S. dollars in sales in 2018, a year-on-year increase of 13%.

Interestingly, in e-commerce live broadcast rooms and shopping festivals, beauty samplers have become the main trophy. According to relevant statistics, in the brand's official sales channels, the market capacity of cosmetic samples is almost equal to that of official packages, and it is still gradually expanding. We can't help but wonder, what is the magic of the sampling economics?

Makeup Samplers

1 Who is making the beauty samplers?

The essence of sample economics is that you can enjoy big-name quality at a lower unit price.

Focusing on this new consumer demand, a new retail format has emerged in the beauty industry—a cosmetics sample collection store represented by Harmay and Haydon Black Hole H.E.A.T. In cosmetics sample collection stores, consumers can buy trial sets of big-name cosmetics for one-tenth or even tenths of the price, and they have a wide range of choices, covering major mainstream brands and a number of emerging brands.

From the perspective of industry insiders, these cosmetics sample collection stores provide low-threshold, multi-category cosmetic choices, which not only cater to the young people's "loving the new and disgusting the old" early adopters drive consumer psychology, but also add a layer of "careful calculation" to consumers. Psychological buff makes consumer behavior seem more reasonable and easy to accept.

According to survey data from the consulting firm NPD Group, cosmetic samples in the US skin care market set a new record in sales of US$1.2 billion in 2018, a year-on-year increase of 13%. The exquisite and poor demand for small samples has allowed cosmetic collection stores to flourish: According to incomplete statistics, as of this year, there have been more than 25 large-scale new cosmetic collection stores in operation, and the total number of stores has exceeded 1,200.

In this context, major brands have also started official sales of trial equipment.

Taking L’Oreal as an example, it is the first to launch the "MY BEAUTY BOX" series of products (each box contains 6-7 single-product trial packs), which integrates the popular products of multiple brands and sells them in gift boxes. Among them, there are many high-end brands such as Lancome, Biotherm, YSL Saint Laurent, and even the lady-level brand HR Helena and related perfume products.

Coincidentally, according to Keyan's official disclosure, after using the automatic sample machine to give and promote the sample, the daily distribution increased from the original dozens to 600. According to the background data, consumers who received the sample from the sample machine , 80% are users who have not purchased Kiehl's products within 3 years, but they are all regarded as potential customers of the brand.

In addition to the brand side, e-commerce platforms are also vying for sampling businesses ...

2 The logic behind beauty "sampling economics"

Buy a sample before buying a genuine product and try it out, which has become the new beauty justice.

Allergies, peeling, acne, redness and swelling. On the metaphysical path of choosing a product that suits you, the trial and error costs that your wallet and skin have to bear are suddenly reduced because of the sample. Compared with hundreds of thousands of big-name cosmetic products, the cost of trying new cosmetic samples of dozens or even a few dollars is lower, and it has become a transitional choice for many people before changing to new products.

On the one hand, the unit price is only a fraction of the big-name formal equipment; on the other hand, if calculated according to the formal equipment capacity, the price of many samples is also much cheaper than the formal equipment.

"Big brand at low price" also reflects the cost-effectiveness of the beauty sample. Take lipsticks, perfumes and other beauty products as examples. Consumers are often not satisfied with a single color or taste. The result of hoarding is that they have not used up a formal dress. Small-sized samples accurately solve the user’s pain point. In some skin care products with higher requirements for freshness and shelf life, the sample has become the best choice.

Of course, there is another point. Young people also hope that their travel cosmetic bags can be lighter. In this scene, the beauty sample can also make a direct contribution to "burden reduction."

In addition to products, packaging is also part of the high premium. The sample packaging is simple and the cost is low, which reduces the premium space. According to the "2020 Online Beauty Individuals Insight Report" released by the Business Data Center of CBN, the main groups paying for the "big-name samplers" are mainly the post-95 student party, and the main consumer groups in first- and second-tier cities. On the one hand, they are willing to pay for better products; on the other hand, they are not yet economically independent and have to consider cost performance.

Cosmetic samples have formed a certain business opportunity, but there is still a certain distance from the popularity of beauty samples.

Specific to the beauty category, although the competitiveness of established beauty collection stores in China such as Mannings and Watsons is not as good as before, new types of beauty collection stores such as THE COLORIST colorists and WOW COLOUR are blooming in various shopping malls. HEAT is open for half a year. Stores, WOW COLOUR will open more than 100 new stores nationwide in 2020.

3 Is beauty sampling a long-term business?

In the case of rising customer acquisition costs, "small affordable" packaging tends to open up the market better.

At the moment, brands are constantly seeking new ways to play in maintenance and promotion, from trial outfits to selling products, plus the impetus of face value that is justice. Behind the party, there are many "rational consumers" hidden behind the party. The 'sample economics" is just in line with This part of the population's consumption philosophy is driven by both hands-off and rationality.

For example, L'Oreal mentioned above, in order to open up sales channels for "samplers", it opened a flagship store on Tmall(famous B2C platform in China). It combines its products according to the product efficacy and the different needs of customers to form a star box, Various small sample sets such as youth box and beauty liquid box. Among them, the price of the fairy princess box is 300 yuan, covering high-end products such as Lancome black bottle and Helena green essence bottle.

In order to cater to the trend of consumer behavior of Generation Z, the "Blind Box for Beauty Samples" also came into being.

In addition to the blind box blessing bags launched by merchants on holidays, many consumers are increasingly seeing "sample" blind box machines in shopping malls. "Further linking with consumers' "fun hunting" psychology, making the product more interesting.

At present, the domestic “beauty sample” is still in its infancy, and it is still reflected in the auxiliary functions such as trial, gift, and promotion. It can be seen that the categories that sell big-name samples are basically dominated by foreign brands, and very few paid samples of domestic brands appear in the market. . Some people in the industry believe that the gradual maturity of the "sampling economics" may also open up a new market for high-end domestic cosmetics to a certain extent. "Mini-packs" and "small cans" may also trigger a wave of new trends.

Even so, the core issue for beauty samples is still the channel and supply issues.

Beauty samplers need a reliable and stable purchase channel and a relatively stable supply, but these two things are difficult to solve at the moment:

On the one hand, it is relatively low for the beauty sample to get the authorization of international big-name cosmetics. At present, most of the purchase channels of beauty collection stores come from special counters and trading companies. It is difficult to directly authorize the purchase of goods from brand channels. Many samples are branded as non-sale products on the packaging when they leave the factory. The act of selling the sample as a regular-priced product may harm the interests of upstream brands.

feOn the other hand, although to some extent the sales of samples are advertised to upstream brands, if the prices of the samples sold in the collection stores are too low, it will weaken the cost-effectiveness of the formal wear, thereby harming the interests of upstream brands, and treat the samples as formal wear. Selling may be a situation that the brand will not be happy about. Take Lancome as an example, the counter staff publicly stated that each gift will have a clear record, and there will be no counter staff selling it privately.

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