Brands work hard for loyal customers and product fans in an ever more competitive beauty market. Establishing sales channels and skin care distribution is a complex journey for the majority of brands.
To successfully distribute and sell skin care products, entrepreneurs and companies must have a comprehensive approach. Efforts have to be made online and offline to successfully capture a percentage of the market share.
For example, 26% market share of US mass skin care is driven by 4 global brands. Neutrogena, Aveeno, Clean & Clear, and Roc.
What are people spending their money on? The cosmetic industry (aka beauty industry or personal care industry) can be broken down into 5 categories with sales distributed as follows:
– Hair Care 20%
– Facial Skin Care 27%
– Fragrance 10%
– Make-up 20%
– Personal Care 23%
To capture these shoppers and potential customers, skin care brands may invest into marketing and advertising their skin care products and establish sales channels and distribution across various segments.
Distributing Skin Care Products
Drug Stores
US drugstores industry includes about 20,000 companies with combined annual revenue of about $220 billion. Major companies include Walgreens, CVS Caremark, and Rite Aid.
The industry is concentrated: the 50 largest companies generate about 70 percent of revenue.
Spa Services
The spa services industry in the US includes about 18,000 facilities with combined annual revenue of more than $13 billion.
Major spa services companies include destination spa chains Canyon Ranch and Golden Door, massage clinic franchise Massage Envy, as well as day space franchise Woodhouse Spa.
The industry is highly fragmented: most spa services companies operate a single facility with less than $1 million in annual revenue.
Department Stores
The US department store industry includes about 3,500 stores with combined annual revenue of $70 billion.
Major companies include Sears, JC Penney, Macy’s (which owns Bloomingdale’s), and Dillard’s.
The industry is highly concentrated: the top 50 companies have nearly 100 percent of the market.
Cosmetic Retail Market
The cosmetic, beauty supply, and specialty store industry includes about 13,000 stores with combined annual revenue of around $10 billion.
Major companies include ULTA, Sephora, and divisions of Limited Brands (Bath & Body Works) and L’Oreal (The Body Shop International).
The industry is concentrated: the top 50 companies have almost 75 percent of industry revenue.
Online Beauty Retailers
There are multiple online retailers that purchase products from brands and manufacturers in advance and resell them online to their website visitors and established customers. Online retailers such as Dermstore.com have been very successful at selling skin care products.
Dermstore.com was recently purchased by Target. Some brick and mortar retailers such as Sophora have also very robust ecommerce websites for the beauty industry.
Brands that wish to be successful must have all their due diligence done on requirements to distribute and call contacts and buyers of distributors, brokers, and store representatives.
Once everything is in order, brands can implement a sales strategy and contact various key distribution opportunities to expand and grow product sales and market share.
Brands that wish to ensure to have best possible chances at success can get help through skin care business consulting services. Consulting services help brands and companies as well as entrepreneurs with key steps.
