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Increasingly, localization is crucial to the success of any global beauty brand or retailer. To scale successfully, brands and retailers in the beauty industry must focus on omnichannel and global expansion, which is critical for gaining market share. Aside from powerhouses US and China, the Middle East and India are emerging as new hot spots that offer distinct potential for specific categories and price tiers. EDITED’s latest report ´Localized Insights And Growth Opportunities For Beauty Brands’ dives into each of these key regions and discusses key categories and growth opportunities within each.
Brands and retailers that serve the beauty market must ensure they tailor their assortment to suit the specific needs and preferences of customers in each country or region. Assortment and price architecture localization will improve brand perception, customer loyalty and, ultimately, drive sell-through and revenue goals.
What steps should merchandisers take to get localization right for their brand?
It is important to recognize that your competitor set will widely vary depending on the country or region you’re looking to succeed. While there are globally recognized brands and retailers that you’ll always want to watch, you should also pay close attention to local players who may be more active in one market than others.
EDITED’s Who & Where tool easily allows you to identify emerging and growing brands that your competitors are stocking, enabling you to compare your competitors’ brand assortment mix against your own. In India, the ancient medical system of Ayurveda is driving the country’s current beauty boom, which is projected to reach $17.5bn by 2025. Ayurvedic brands, such as Forest Essentials and Fable & Mane, are becoming popular worldwide, with the latter being the first South Asian-owned hair care brand to launch at Sephora. In Australia, Mecca is one of the biggest beauty retailers while in China Tmall, JD and Jaobao are the biggest ecommerce players in beauty.
Brands are increasingly localizing the structure of their assortment to ensure that commercial, yet profitable, products are developed to maximize profits and sales. Using EDITED’s Assortment tool, you can see how your competitor’s category mixes are structured over various markets. This enables you to spot gaps to fill in your current assortment mix and confidently decide how to weigh your assortment mix to take advantage of localized customer preferences. MANGO uses EDITED’s Market Analytics assortment and options tools to understand what products will work best in a specific region, helping to identify white space in the assortments of both local players assortments, and at other global retailers, to uncover expansion opportunities.
Bestsellers differ widely by region, meaning what is selling well for you in one market may not see the same results in another. Identifying which products are selling well for your competitors across different countries enables you to have a real understanding of the most profitable products in your assortment by region, channel or store. Additionally, understanding how your customer’s behavior changes by region will help further support merchandisers to trade effectively in-season and optimize inventory allocation. In Australia, consumers are growing increasingly interested in sustainable and organic ingredients, with “natural” and “vegan” featuring in 14% and 13% of all skincare product care descriptions in stock at a selection of Australian retailers on June 12th, 2023, respectively.
Once you’ve identified the right products for the right regions, timing the launch of your product is critical to ensuring a high sell-through. Analyze when key players launch categories in counter-seasonal markets to potentialize your seasonal product life span. Many customers in varying markets have completely different expectations of your assortment and so relying on your traditional product calendar will mean risking offering unwanted products at the wrong time. For instance, brands looking to expand into Australia from Western countries will need to launch and promote SPF products during the country’s summer months, which are between December and February.
Using EDITED’s Visual Merchandising tool, you can discover peak times for seasonal promotions and updates, while tracking current discount rates worldwide, to reduce markdown spend. You can also identify key messaging on new trends, promotions and more across competitor websites and emails in multiple regions.
Understanding how your competitor’s pricing architecture differs across multiple countries allows merchandisers to benchmark and identify pricing opportunities at a more granular level. Focus your entry price point product in the relevant regions, push your exit price points where you can and identify where exchange rates and pricing is out of line to correctly position yourself in each market and maximize your margins. EDITED’s range of pricing analysis tools can help you understand how the competition is tiered to fill in pricing gaps and white space, right down to a specific product.
According to research by McKinsey, the premium beauty tier is projected to grow at an annual rate of 8% (compared to 5% in mass beauty) between 2022 and 2027 as consumers trade up and increase their spending, particularly in fragrance and makeup. A major growth opportunity across regions will be products and services in the top tier of the pricing pyramid – the true luxury and ultraluxury beauty market, which has remained relatively inflation-proof so far.
To ensure your brand’s global success, you must understand the needs and preferences of customers in each key market, including cultural differences and local trends. Marketing messaging, timing and cadence should be adapted by country to resonate with your customer. Further to this, take advantage of key promotional periods and marketing events that are specific to each market to capitalize on localized sales opportunities.
While major holidays, such as Valentine’s Day and Christmas, are major sales periods across the majority of the world, each country also has its own important events that are purely relevant to that market. Shopping events are huge drivers for sales in China, with the 618 Shopping Festival in June being the second-largest shopping event after Singles’ Day. In India, gifting is a large part of celebrating religious holidays, including Eid Al-Fitr and Diwali, but promotions should be sensitive to the occasion. For example, candles are a popular gift for Diwali, the Hindu festival of lights.
In the current economic environment, with brands competing for market share, localization is a critical component of success. The challenge is, how does a merchandising function with increasing constraints on time and resources put this into practice? The fact is that accessible, actionable data and insights have become a necessity within the merchandising role and the demand for a more nuanced strategy across each country that you operate in further illustrates the need for these insights.
Read the latest report today to delve into the top five growing markets for beauty, highlighting key growth categories, opportunities and important promotional dates in each market to help you make confident decisions in personal care and cosmetics.
At EDITED we understand the need for merchandisers to act quickly and make decisions that matter, and that you need to do more with less. We support brands and retailers to effectively localize their assortments, pricing architectures, and marketing messaging and drive growth.
EDITED is the world’s leading AI-driven merchandising experience platform and empowers retailers with relevant-time decision-making that drives profit and inspires customers.
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