Online Beauty Retailing: Can the door-to-door make up sales representative ever be replaced by online?

We all remember Avon and MaryKay, especially their representatives, typically pulling up to your house with a branded car and chotchkies to share.  It seems as though they had a great offline and personal selling strategy.  Today, both retailers have made their mark just like many other beauty retailers by championing both sides of the fence and extending online.  The key note for these two retailers is they have tried to maintain that unique representative feel by "shopping your store/representative online".

I started with looking at unique visitors to their sites; I found that UV’s are low or dramatically declining.  Although unique visitors are down for AVON from last year to date, they are still double that of MaryKay.  MaryKay on the other hand, has not seen the dive that AVON has over the past year and has maintained a more consistent UV pattern.

While reviewing the teams Q1 Shopper Intelligenceâ„¢ survey results, some eye opening data about how consumers shop online may be applicable to boosting the online business that AVON and MaryKay are looking for.

Key Insights and Takeaways:

The good news for both of these retailers is our survey results show that 44% of consumers shopping for health and beauty products online are going to focused retailers for their needs"¦sites like MaryKay and AVON.  Prior to purchasing, they are consulting with the eBays of the world (27.6%), then SEM (26%) and finally retailer email programs (24%*). Both retailers do not have a CRM program for members, which could prove to increase site visits when new products/promotions come out or when enhancements are made. This variable, among all other retailers, is most important to the health and beauty shopper.

In addition to building out a deeper CRM program, if 26% of all health and beauty online purchases are using search engines and/or portals for their information sources, should AVON and MarkKay be investing more in SEM to garner a larger lion’s share of the health and beauty online marketplace?  I decided to dig a little deeper by using Compete referral data:  AVON has a 10% share of all referrals based in SEM, while MaryKay enlists almost 22%. By investing more in competitor, or perhaps more general health and beauty keywords and terms, they may see more traffic on the site for both representatives and for general online shoppers.

What is the number one reason to purchase in store, rather than online?  When looking at online shopper behavior through the Shopper Intelligence survey it is easy enough to answer that. Across our surveyed panel, 68% of respondents did not want to purchase online because the company did not offer free shipping.  Furthermore, over 50% *of all surveyed consumers purchased their latest purchase online because they had free shipping.  Just to be sure we understand how important that free shipping is to a consumer, 60% of consumers surveyed would not have purchased their health and beauty items online if they did not have free shipping.  AVON currently offers a free shipping promotion while MaryKay does not.  If free shipping is incentive based or offered with a promotional code, could these retailers see bumps in their online activity?

Consumers require little to no research time either; the study shows that 43% of all consumers spend less than 30 minutes researching their next health and beauty purchase online. This suggests that most people know what types of products they are looking for before they purchase.  While perusing both AVON and MaryKay sites, there are options to shop and chat through your store representative, which makes sense as guided shopping and suggestions through an ambassador is the way both stores have built their success on.  As most people already know what they want to purchase, we can infer that MaryKay and AVON are meant to be personal and face to face transactions rather than a transaction through an online chat**, particularly for this category of online shopping.

So, my question is, are retailers like MaryKay and AVON able to survive against the mass beauty and health merchandisers online?  Are they just not utilizing their assets and online touch points to their fullest capability? Or, are they better served by maintaining their fundamental roots which grounded their original success in the offline world.  Stay tuned for the next blog when I’ll look at MaryKay and AVON versus mass health and beauty retailers.

*Statistically significant at the 95% level.

**1.7% of surveyed consumers, used online chat resources to research their health and beauty purchase

About Pashmeena Hilal:
Pashmeena Hilal is a Senior Associate at Compete. Pashmeena does competitive analytics, POV's and surveys for the retail division of Compete. Before Compete Pashmeena was an agency account manager at Carat and Studiocom.