January 16, 2022 11:30 am
As we know, the pandemic has given online retail a powerful boost. Your cosmetics giants also sell a selection of their products – sometimes even exclusively – via their own online shop. Since that is usually still unprofitable, I, Karl, go on a search for meaning.
Maybe one or the other still knows the decoy offer from McDonald’s: the simple hamburger and cheeseburger only cost 1 euro for a while. It was known that McDonald’s was making a loss with it. However, the idea was to lure customers into the restaurants, with the ulterior motive that it will not stop with the burger.
Eventually the offer disappeared
I don’t eat at McDonald’s that often. So I can’t say exactly when and why your fast food chain stopped offering bait. Of course I could research it, but I’m actually talking about the online shops of your cosmetics giants. What motivates companies to sell directly to consumers?
save margins
The most obvious are the saved margins. The retailer is slipping through their fingers and the rich corporations are getting even richer. But that’s not the case at the moment. In order for your own sales to pay off, the shopping baskets have to be larger. Henkel manager Daecke also sees it this way: “The first purchase [ist] in the rarest of cases already profitable.” So what to do?
Exclusivity and personalization
Products that are exclusively available in your own shop work best. Here, Henkel focuses on niche products that retailers would not stock. These can then be sold at higher prices. Customers also charge for the personalization of products, such as a shampoo that is perfectly tailored to their needs. So we’re getting closer.
To build a relationship
Another advantage is that companies have brand management under control themselves. Regular newsletters about innovations, spare parts or care tips can be used to build relationships with customers that should pay off in the future. Of course, one thing in particular is very helpful.
Data, data everywhere!
Companies are primarily interested in data on their customers’ purchasing behavior (and of course searching for products is part of that). As in so many other areas, the cosmetics industry is in a data frenzy – the panacea of the future.
Beware of exposure
The flip side of the coin is that mistakes and problems cannot be cushioned by the retail trade as before. Delivery bottlenecks, wrong products, returns, etc. – these can quickly fall on the heads of corporations. But it’s apparently a risk they’re willing to take.
is this going to be something
What’s your opinion? Do you think your cosmetics companies can make online trading profitable for themselves? Let me know in the comments.