admin In April last year, Farfetch made a grand entrance into the beauty sphere, creating quite a buzz. The launch of its own beauty category came on the heels of its acquisition of beauty retailer Violet Grey, resulting in the unveiling of its very own Farfetch Beauty. This new venture boasted an impressive lineup of over 100 brands, ranging from renowned British makeup artist Charlotte Tilbury to the esteemed Swiss luxury skincare brand La Mer. However, recent developments indicate that the category has encountered challenges, leading to reports that Farfetch may close down this division.
According to insights from WWD, a fierce competition has been unfolding among retailers vying for the esteemed prestige beauty customer. A multitude of online players, including Net-a-Porter, Ssense, and The RealReal, have all dipped their toes into this category, with the latter shuttering operations earlier this year.
Simultaneously, brick-and-mortar retailers have taken a deeper plunge into the beauty realm through strategic partnerships with industry giants such as Sephora and Ulta Beauty.
Success and loyalty
The foundations of brand loyalty and trust are pillars that the prestige beauty industry heavily relies upon. Established physical retailers have cultivated strong, enduring connections with customers over time. This poses a significant challenge for digital players aiming to swiftly establish similar rapport. Shoppers often gravitate towards purchasing beauty products from familiar and dependable physical stores, preferring them over emerging digital platforms.
Within the beauty industry, the in-store experience also carries substantial weight. Potential buyers often desire the opportunity to physically engage with and evaluate products before committing to a purchase. This sensory encounter proves intricate to replicate online, even with the integration of advanced virtual try-on technologies. The tactile engagement and direct interaction in assessing cosmetics and fragrances hold a distinct appeal for shoppers.
Beauty products, particularly those of a high-end nature, frequently exhibit complexity. Customers may find themselves in need of guidance while selecting the perfect shades, formulas, and products that align with their specific requirements. Conventional retailers adeptly offer in-person consultations and expert advice—elements that can prove difficult for digital platforms to effectively mirror.
A slice of the beauty pie
Statistics from McKinsey show that the expansive beauty market, encompassing skincare, fragrance, makeup, and haircare, raked in an impressive revenue of approximately 430 billion dollars in the year 2022. The allure of the beauty industry has enticed numerous new companies and investors to participate. Nevertheless, the key to triumph within this dynamic and increasingly competitive landscape lies in brands making strategic differentiations to stand out and flourish.
