In a booming and increasingly competitive industry like beauty, brands must have effective and distinctive logistics in place to succeed. The data speaks for itself:
- The sector generated $430 billion in revenue in 2023, according to McKinsey.
- The beauty market is expected to reach $580 billion by 2027.
- The beauty sector encompasses skin care, perfumes, make-up, grooming and personal hygiene, and hair care.
- More than 50% of sales in the cosmetics industry are made online, which adds pressure to manage e-commerce efficiently.
The beauty sector in Spain
In Spain, the industry broke its ceiling in 2023 by exceeding 7.7 billion euros in exports. A figure that made the country the world’s second largest exporter of perfumes, only behind France, according to the National Perfumery and Cosmetics Association (STANPA).
Not surprisingly, Spain exports more cosmetics and perfumes than such emblematic products as footwear, wine or olive oil.
Furthermore, it is a sector that accounts for 1% of the Spanish GDP and has significantly contributed to the growth of private consumption, with an increase of 12.1% and 10.4 billion euros. Such a figure consolidates its position as the fourth largest market in the EU.
Why has this phenomenon occurred?
The beauty sector has proven to be resilient in the midst of global economic crises and turbulent macroeconomic environments such as those experienced in recent years. In addition, consumers have become more aware of the importance of personal care and well-being, which has led to an increase in investment in self-care.
A situation that has also been favoured by the rise of e-commerce thanks to the expansion of the offer of beauty products in the world’s large marketplaces; to the greater digital sophistication of direct-to-consumer sales operators; the growing importance of an online presence for omnichannel retailers; and the proliferation of social selling, including live streams.
In fact, e-commerce is expected to remain the fastest-growing sales channel in the sector, at 12% annually until 2027.
The ‘premiumisation’ of the beauty sector
But to keep pace with this growth, and successfully scale up in an increasingly ‘premiumised’ sector and with products containing very specific characteristics, brands must focus on their omnichannel logistics and the internationalisation of their business. Two aspects that require a very focused specialisation and professionals who have an in-depth knowledge of the sector around the globe.
It must be kept in mind that shopping experiences have a direct influence on the behaviour of consumers, who are demanding ever-greater omnichannel retailing, which is driving the shift from traditional brands to online sales and the commitment to logistics operators specialising in this segment such as Logisfashion.
It should be noted that the beauty industry faces highly specialised logistical demands, due to the nature of its products. From storage to distribution, every stage must be optimised to meet strict quality standards and consumer expectations. This sector covers a wide range of delicate products, which require precise logistical processing that can be adapted to their specific characteristics.
Therefore, beauty logistics presents a series of challenges that must be tackled in order to be competitive in the market and increase customer satisfaction. These include:
- Expiry management: efficient inventory management is essential in this sector and storage must be carried out under optimal temperature and humidity conditions that maintain product quality throughout the supply chain.
- Product fragility: highly sensitive to factors such as light, temperature or improper handling, it must be ensured that these products reach the consumer in perfect condition.
- Seasonality and increased demand: seasons such as Christmas or Black Friday generate a significant increase in demand for these products, which implies precise planning in logistics. Responsiveness is crucial to maintaining the quality of service during these seasons. Therefore, the use of advanced inventory management systems and the latest technological tools is key to maintaining efficiency.
- Fast deliveries: consumers expect fast and often free deliveries, which requires businesses to optimise their logistics through the use of real-time tracking technologies and the implementation of smart routes to avoid delays.
- Technology is essential: accurately tracking inventory and streamlining the picking process is essential in a sector defined by a myriad of references. That is why logistics must integrate innovations such as warehouse automation and artificial intelligence solutions to improve operational efficiency.
- Sustainability, the key component: the growing interest in organic products and the circular economy is redefining logistics strategies towards greater sustainability. Therefore, both in packaging and in logistics processes, sustainable packaging and operations determine consumer preferences and contribute to a better brand image.
How to manage returns in the beauty sector?
An additional challenge in beauty logistics is the management of returns, as returned products must go through strict quality control before being reintegrated into inventory or permanently discarded, which implies additional costs and an extra effort for brands. That is why agility in this process is crucial to maintaining customer satisfaction and minimising losses.
Overall, logistics is a critical component in the beauty industry which can directly influence brand perception and consumer satisfaction. From the correct management of inventory to the implementation of advanced technological solutions, every detail counts in maintaining the high-quality standards demanded by the market.
That is why having a logistics operator specialised in this industry like Logisfashion helps brands tackle the challenges of this increasingly competitive sector. Some brands, such as Moncho Moreno, Bath & Body Works, Belcorp, Ultra Beauty or the beauty sections of the most important fashion companies in the market, have already entrusted Logisfashion with their products to concentrate on their core business and optimize their operations. A strategic solution for their businesses.
