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To ensure customer satisfaction brands need the perfect warehousing, shipping and logistics partner

ESW
24 July 2023

Stellar growth in the UK’s health and beauty has buoyed up an otherwise lacklustre performance for ecommerce in H1 according to IMRG’s Online Retail Index, up 17.3% YoY, but, as Martim Avillez Oliveira, Chief Executive Officer – UK and Europe, ESW explains, key to supporting this growth is making the right decisions about warehousing and shipping.

For international beauty brands looking to capitalise on this demand, finding the right warehouse and shipping provider can be a challenge, as it is for any brand with a DTC ecommerce channel.

Before deciding which partners to work with for fulfilment, it is important to understand what is driving growth – both in the UK and globally. ESW’s Global Voices research found that Millennial and Gen Z consumers are more likely than other age cohorts to shop across international borders for their beauty products. Nearly a quarter of Gen Z (23%) and Millennial shoppers (24%) made beauty purchases cross-border within the last 12 months. Overall, nearly 41% of consumers surveyed in China purchased beauty products from online retailers outside of their home country, followed by the United Arab Emirates (UAE) (36%) Switzerland (29%), Spain (26%), and India (22%). The countries these shoppers purchased from most frequently were the United States and France, each tied at 33%, followed by Germany (27%) and the United Kingdom (25%).

These stats enable the beginnings of a fulfilment strategy to be constructed based on where the demand is coming from. Then price perception has to be considered – with 67% of Gen Z and Millennial global online beauty shoppers preferring to wait for lower prices on products and happy to risk that an item they want may become out of stock.

These younger consumers are also driving the growth in the direct-to-consumer beauty market, yet despite their spending power, they remain very price conscious. Creating limited edition products, or offering top customers early access to new products, can help brands overcome price sensitivity in the beauty industry’s key demographic.

When it comes to fulfilment, consistency and certainty are important for all brands but for beauty brands the task is more daunting than for tough, non-perishable and uniformly packaged items. No matter how wonderful the products, any beauty brand can lose its reputation on poor fulfilment. And while no brand selling direct to consumer (DTC) wants to erode margin by paying over the odds for warehousing and shipping, quality and certainty should always be the leading decision factors.

And that’s just a few considerations for all brands; when it comes to beauty, the sector has unique and unusual requirements in terms of packaging shapes and sizes, and perishability.

Beauty brands must find a licensed shipping and warehousing partner that has the certification necessary to store and ship all classifications of beauty products, some of which are classified as drugs.

Packaging product in unique ways may be cause for a warehouse to charge more for (or simply not accommodate) product. Beauty brands should vet warehouses and shipping providers to ensure they can affordably pack and ship packages of many different shapes and sizes.

packaging

The warehouse inventory management system should provide visibility into how long a product has been on the shelf and prioritise the distribution of product according to expiration date. Smart inventory tracking helps prevent waste and maximises margin.

The partner should be fully vetted for proper security and risk mitigation measures in place, including 24/7 video and electronic security monitoring, access control measures, fire protection and suppression systems and sufficient insurance coverage.

Shipping partners should enable customers to track the status of their order and know exactly where the package is in real time. This is especially important for beauty brands, which often have high SKU counts that require close monitoring for inventory management and quality assurance purposes.

The partner should offer condition monitoring, which means they keep a close eye on the product throughout the shipping process. Condition monitoring can give real-time insight into moisture and humidity levels, temperature, sunlight exposure, bumps and tilts of packaging, location and more.

Beauty and cosmetics brands should also ask about seasonal or unique packaging and kitting requirements. Beauty products are perfect for bundling and other promotions so brands should make sure that the warehouse can handle multiple and new SKUs.

Local distribution ensures that the online catalogue matches available inventory and accounts for any market-specific ingredient or packaging regulations. Holding inventory in-country and shipping from local distribution centres also give cosmetics and beauty brands more options for return logistics, creating a better customer experience throughout the buying journey.

Beauty brands have many unique requirements when it comes to warehousing, shipping and logistics — which is why it is critical for them to find partners who understand their needs. The right warehouse and shipping partner can ensure products arrive at the customer’s doorstep in perfect condition, so they remain loyal customers well into the future.

 

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