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The cosmetics and personal care industry has evolved in recent years, and the multiple channels for purchase mean new challenges when it comes to logistics and warehousing for these products.
Like apparel, the cosmetics and personal care industry has evolved in recent years. There is a continuous stream of new products hitting the marketplace every day, as well as a variety of platforms on which they are sold.
In the past, luxury makeup items were only available at the counters of large department stores. Less expensive makeup and daily use products like toothpaste and deodorant could be picked up at the drugstore. Today, consumers can still go to a number of retail stores to buy these things, but they can also visit a brand’s online store, an eCommerce outlet like Amazon, or even sign up for subscription services to receive them on a regular basis.
The cosmetics industry has always had its share of challenges. These new ways to purchase mean new things for vendors to be aware of and prepare for.
In some ways, the challenges posed by beauty products and personal care items are similar to those with food and beverages. Spoilage and shelf-life are important, as is FDA approval. In a manufacturing environment, attention must be paid to the workstations that might include specialized material handling to ensure a sterile environment. Storage might need a controlled climate where temperature and humidity are regulated.
Even companies who are not making the products (including warehouses and 3PLs) need to follow some of these protocols. Allowing products to get too hot or too cold could affect their color, scent, or consistency. Not only will customers be unhappy with what they receive, but these products might not work as advertised, or worse, become spoiled and hazardous.
In an industry where customer loyalty and product reviews can make or break a business, problems like this can spell disaster.
Warehouse managers need to safeguard their products through every step of the fulfillment process. Exceptional lot control is a must, tracking a product’s origin, location in the warehouse, and destination. This is necessary in case a product is recalled, but it is also helpful in pinpointing stock that may have become compromised. For example, if it is discovered that a specific lot sat too long on the hot loading dock before it was unloaded, those products can be easily located and pulled from the shelf. A quality control check can then determine if they are able to be reshelved for sale, or if they must be returned or destroyed.
Online influencers make a career of unboxing videos, makeup tutorials, and sharing their daily skin-care regimens. In the cosmetics industry, appearance is everything. It only makes sense that the same is true of the way the products are packaged and presented.
Packaging for beauty products has two major requirements. It must be secure, and remain onbrand.
Let’s turn to security first. Boxes and packing materials must protect containers from breakage and leakage. If several products are shipped together, the way they are bundled or kitted needs to be organized and attractive. Simply tossing them in a box together just won’t do when it comes to providing an exceptional customer experience.
Presentation goes hand-in-hand with branding. The most successful brands are instantly recognizable with logoed boxes, wrapping paper, and even tape or stickers. Common buzzwords and messaging in the industry (like animal-free testing, vegan, pure, clean, and sustainable) can be conveyed to the customer via the packaging. These methods are not reserved for luxury cosmetics: Even less expensive products are putting effort into thoughtful, well-designed packaging.
Warehouse management software can help drive unique packaging by mapping out kitting protocols, either at the manufacturing site or a 3PL. Pickers and packers will have a clear fulfillment plan to follow and management will have a means of monitoring its success.
The explosion of eCommerce for cosmetics has brought about the challenge of working with the unique requirements of multiple platforms.
A brand may still sell to drugstores, but they may also have scaled to be in the industry heavy-hitters like Ulta or Sephora. On top of these, they may maintain their own website to sell DTC (direct to consumer). Or they may use an eCommerce shopping cart like Amazon, Shopify, or Magento.
Companies must have EDI (electronic data interchange) capabilities to interface and share information with various retailers. Infoplus can provide that capability, and also has its own customizable API (application program interface). Any brand hoping to scale and sell in multiple venues will need one or the other.
Selling cosmetics and personal products on many platforms allows brands to form partnerships with other vendors or expand their own product line. For example, partnering with a subscription box provider could put the brand in front of a whole new audience. Or, consider brands like Dollar Shave Club. They started marketing razors primarily to men and have expanded to include a number of personal care products for both men and women.
There is also the opportunity to capitalize on trends by providing items that complement or are accessories to the original product. For example, there is a lot of interest around getting organized these days. Finding the maker of a makeup case or bin to sell either separately or kitted with your lipsticks or makeup brushes could be a very lucrative move.
Cosmetics customers can be very fickle, jumping to buy the “next big thing” they’ve seen in Vogue or on Instagram. At the same time, they can be exceptionally loyal to one item or brand for decades.
Like clothing, beauty product trends are all about personal taste, style, and fashion. Brands need to deliver what customers want, when they want it.
This starts with a WMS that can provide predictive analytics. This flows into a robust inventory management system that can help managers keep high-velocity items in stock by monitoring what is on the shelf and alerting when they are running low. Beauty brands need to walk the tightrope of never running out of things that are in demand, but not ordering so much that they are saddled with out-dated products.
You may have heard the saying “close only counts in horseshoes and handgrenades.” The same could be said of lipstick and eyeshadow colors. Fulfillment in the warehouse needs to include good quality control and accurate picking.
Once things are packed, shipping needs to be fast. Not only are you racing the clock to keep the product stable and in good shape, but you’re battling the competition.
Companies that manage to provide quick and correct order fulfillment will have a better chance cultivating customer loyalty.
Returns are inevitable no matter what you’re selling. With cosmetics, you won’t want the products back. There is zero chance of reselling something that has most likely been opened and partially used. And retailers might charge RTV (return to vendor) fees. Instead, you’ll want to issue DIF (destroy in field) instructions to the stores you sell through.
That might solve the challenge of managing returned merchandise, but you still need to decide how you will refund or replace products for unhappy customers. A WMS system that tracks your customer’s data can be set up to issue money back, store credits, or provide a replacement with ease.
Just as important as making it right with the customer is finding out what happened in the first place. Are returns happening primarily at one retail store? Perhaps there is a problem there or with a particular lot that was shipped there. Are problems in fulfillment stemming from one picker? Or is a piece of automated equipment damaging bottles before they leave the warehouse?
Efficient tracking of warehouse operations can help managers track the source of inaccurate orders or damaged goods. Once the problem is found, it can be fixed.
Like any product, proper warehouse layout, fulfillment procedures, packing, and shipping are all part of the answer to the challenges for the cosmetic industry. Understanding the unique properties of the products and customer expectations are what make it different. Once you customize your processes and procedures—with the help of warehouse management technology—your brand will be sitting pretty.
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