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Home » Customer Segmentation in Beauty and Cosmetics
CEO and Founder,
440 Industries
When thinking about the fashion industry, we can’t help but acknowledge its complexity and size. However, there is one particular industry standing out because of its uniqueness: beauty and cosmetics. Beauty and cosmetics require brand managers and product managers to take into account 2 highly distinctive features of beauty products in terms of:
All in all, beauty is the word that has been used to identify a very wide variety of products that are used for personal care including skin care, suncare, body care, hair care, makeup, and perfumes. For marketers, it is, therefore, necessary to identify some product-specific segmentation criteria when it comes to analyzing the beauty product consumer and the beauty product business.
In this post, focusing on the beauty sector we are going to discuss the following topics:
The beauty product consumer audience can be segmented in terms of consumer typologies. Four macro-categories can be identified:
Of course, to conduct a more in-depth analysis, we should merge these criteria with more general segmentation parameters like the ones listed in the following resource: consumer segmentation in the fashion industry.
Moreover, considering that these products can easily overlap with luxury good segmentation and in particular into “masstige”, here’s an additional blog article you might find useful: Market Segmentation in the Fashion Industry.
Another approach to this unique industry can be pursued by looking at the companies operating in this sector. We’ll discuss this in more detail in the next section of our post.
When looking at the “organizational behavior” of fashion companies operating in cosmetics we can identify 5 categories of firms: large conglomerate firms, cosmetics groups, luxury groups, retail companies, and specialized companies. Let’s look at them individually.
Having clarified some of the most interesting criteria to analyze the cosmetics industry by looking at the customer first and at the companies second, we now move on towards looking towards what types of trends will be able to influence the industry and change both products and consumer purchase behavior.
Let’s now look at the new trends in beauty and at how they are able to affect the market. We can start by identifying two strands of innovation:
At the same time, we can identify new trends that relate to customer behaviors that companies need to react to swiftly if they want to maintain a competitive advantage in pre-empting customer needs. Some of the new customer behavior trends include:
We cannot discuss trends in cosmetics without mentioning the impact of technology.
As we’ve now finished our observations on this topic, we can move on towards some summarising conclusions.
As discussed in this post, the cosmetics industry presents some unique characteristics which require marketers and fashion brand managers to add to the more traditional customer segmentation criteria, some additional product-specific considerations. All in all, the cosmetics industry is growing, and as such firms have opportunities to experiment in terms of product development, and in terms of occasions of use to amplify the range of customers that might be drawn to their brand.
Moreover, cosmetics is probably the masstige product category par excellence and is, therefore, a very profitable segment of a brand’s product portfolio, one which is capable of applying a high markup and extract a lot of value from a brand’s equity.
I am an Anglo-Italian business lecturer and consultant based in Florence, Italy. In 2017 I started 440 Industries, an education and training company focused on fashion, music, and technology. Our mission is to help students, entrepreneurs and managers in overcoming the challenges of starting, developing and scaling their business in the creative industries. When there's a will, there's a way!
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