How Far Can the Sharing Economy Go in Disrupting the Beauty Industry? Part II
The sensitive particulars of beauty products and treatments, which as discussed in part one of this series are limiting the disruptive potential of the sharing economy within the industry, present opportunities to tap into the growing desire for expertly-curated and flexible models of distribution. Digital marketplaces built on authenticity and a unique assortment have more than proven their worth and resilience. BeautyMART’s unusual model of retailing only the most iconic products, and never entire brands or ranges, has secured it a coveted space in Topshop’s Oxford Circus flagship store, showing that there is a mainstream appetite for curation. Whilst away from beauty, peer-to-peer platform Etsy has passed the 10-year mark continuing to post double-digit revenues with its novel handmade offerings and creator and seller transparency, which it expects to continue through to 2020.
UK-based on-demand company Blow Ltd has an omni-channel strategy, which includes an e-commerce platform retailing an independent selection of products used and recommended by its professional network. A focus for the company going forward is leveraging its expert credentials to reach consumers who value that knowledge and are therefore responsive to a customised distribution model. There should be scope for professional expertise to be utilised as a selling tactic in this way, especially as choice becomes even more overwhelming in saturated beauty markets.
A curated distribution channel
From a pure brand perspective, distributing through on-demand apps could prove lucrative for emerging players by associating their unknown name with a professional recommendation, whilst also benefiting from the trend for experience as a means to possession. The model naturally favours indie brands that require initial endorsement. However, for heritage brands, this means of distribution could assist in tapping into new markets, particularly a younger demographic who are increasingly discerning and likely to scrutinise the efficacy of products.
Furthermore, if these on-demand apps were able to leverage their local networks and logistical agility to provide the same instant gratification in distributing products as with professional services, then it could prove beneficial for brands that cannot exercise the same flexibility, speed or convenience in their delivery options. For emerging brands, a convenient and hyper-localised delivery model remedies the issue of limited resources and budget, which are often a barrier to catering for either large or time-constrained orders. Meanwhile many national or global players have similar problems owing to their large scale, which doesn’t allow for flexibility in the ordering process or personalisation in service.
An antidote to ineffective curation
Scaling a curated model has its own challenges, and when it comes to subscription boxes, often the scale on which many companies operate dilutes the effectiveness of curation. This results in wastage as subscribers receive products they don’t want or need, conflicting with a key driver of the movement of scaling back to achieve lightweight living. It is here that the sharing economy offers a solution to its own pitfalls. The Aftermarket is a new online marketplace that facilitates a peer-to-peer transaction for subscribers to sell unwanted and unused items from their subscription boxes. The site’s founders saw a growing need for the service considering the huge numbers of beauty box subscribers yet the near certainty that these subscribers did not always receive suitable products.
The ownership element has long been a challenge for the subscription model in beauty, which operates differently to those success stories in the entertainment sector, such as Spotify and Netflix, which outrival traditional providers by offering shared access in place of ownership. Memebox, a Korean beauty subscription service, is one of many companies that has conceded to the lack of sustainability in the model, recently announcing it had raised US$100 million in investment to help make its e-commerce site profitable, the platform where it now does the majority of its sales.
The biggest opportunities for the sharing economy in beauty seem to lie in the on-demand model; not necessarily in how, where and when traditional beauty treatments can be booked and received but how a professional and local infrastructure can carve a personalised and convenient model of product distribution and delivery. The model’s flexibility and responsiveness could solve issues encountered by both small and established brands owing to sitting at either end of the scale spectrum.