It’s still a $50bn business in the US-marketing strategies in cosmetics industry

As a makeup addict myself, I spend over $150 every month on all types of cosmetics such as makeups, perfumes, skin cares, nail polishes and so on. The global cosmetics industry is still considered to be a multibillion dollar business. Taking the US cosmetics industry for example, Americans contribute approximately $40 to $50 billion US dollars annually.Because the pursuit of a better looking and a better life never stops.

But how does cosmetics company make a sale?

Here are some internal marketing strategies in cosmetics industry:

>High value free gift:

I always got interested in purchasing cosmetics when a high value gift pack comes with an order.  For example, if there is a $150 worth of gift that comes with an order of $35, I’d end up buying something that I don’t really need just to get the gift.  Little did I know that this is just a marketing strategy for some cosmetics companies such as Estee Lauder, Clinique, Lancome and so many more. Everyone loves to receive something free. Even though I rarely use any of the gift products because most of them are not in my regular routine, the free gift sale method never fails to attract my attention.

>Product Sample:

We always get free samples along with orders. This is a good way for consumers to try out new products, which gives the consumers the chances to get to know a product, and possibly get a full size later. Thus free samples definitely drive sales.

>Blogs and Newsletters:

The cosmetics industry adopted social network marketing strategy pretty well nowadays. A lot of cosmetics companies pay bloggers to review their products and sometimes require them to give positive feedback. This method is a good way to launch new product because bloggers tend to be the opinion leader to a certain group of people, and when the many gurus all rave about one product, followers are very likely to be interested and end up buying it. This marketing strategy rely on the subscription system, same as the newsletter. It doesn’t matter whether a consumer subscribed to a blogger, YouTube guru, or a brand newsletter. The marketer is able to reach its consumers through this subscription system by sending out discount information, giveaways to remind the consumers to shop, which increase sales.

There are a lot of other marketing strategies such as free shipping when reached a certain amount; reward and point system that encourage consumers to purchase more and establish customer loyalty; celebrity endorsement on a limited edition product to make it more special to own and so on.

I have so many free gifts and samples,even full size products that I never have the chance to use but I am still purchasing more and more cosmetics.  Which means these marketing strategies still work very well on people like me. Does it work on you too? Have you ever fallen for one of the marketing  traps and end up spending on something you don’t really need?



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10 Responses to It’s still a $50bn business in the US-marketing strategies in cosmetics industry

  1. June Xue says:

    Thanks for the sharing! Yes, I think giving away free samples is truly powerful especially when the product itself is of great quality: I have been purchasing Fresh’s rose lipstick ever after trying a free rose lipstick sample from Sephora.

    I think the cosmetics industry is a very different story in regards to marketing and the essential secret of success if a brand’s unique identity and a brand story. For example, La Mer tells about how its cream could restore marred skin. In this industry, there are no certain rules. The price could be low or exorbitant and there’ll be followers anyways.

    Another thing that really matters is that the brand has to give aesthetic appeals, because purchasing these products are supposed to deliver great feelings for customers. I bought a lot of Paul & Joe products with using only a few simply because the bottles, the compacts, and even the boxes those cheek colors came in were so pretty!

    However, as more and more products now are offering overlapping appeals, I’m afraid simply sending out sales information or adding more free samples might not suffice in the future. Besides, does social network really matter a lot for promoting cosmetics?Like setting up a homepage for Origins?

    • saijiali says:

      Hi June,
      Thank you for your comment.
      I do buy things just for their looks as well, and I am not liking myself doing that.

      Talking about social networks, I think it really matter for promoting because everyone is using some sort of social networks, and word spreads so easily on this platform. This makes the makes the marketing budgets go lower. I am not sure about the homepage thing because it really depends on how Origin operate their homepage on Facebook or other networks, but I do believe that proper online marketing can do great for a brand.

      Thank you for your attention again.
      Have a nice day.
      Amy xx

  2. attwoodd says:

    Thanks, Amy for your post! The cosmetics industry is a fascinating example of how to influence consumer decision-making. I suppose I fall somewhere inbetween a makeup addict and an ambivalent hippy… The main feeling I have when I shop for makeup is one of overwhelming options and confusion. So for me, the biggest influence on my buying decisions is expert, in person advice. Basically, what the salesperson tells me will look good on me and how they pitch their product. I don’t have time to comb the endless magazine and consumer reviews to find out exactly which brand of mascera is the best for full lashes and which type of lipstick I should wear for what month. There are so many differnt types and colors of cosmetics it can be very overwhelming! So I rely on the trust a good salesperson can engender. I wonder how many other people fall into this category. It has intersting implications for marketers communication strategies, for example, making store design and personel training very important. It may also explain the prevelence of free gifts. These gifts build consumer familiarity with new products and reduce their confusion in the face of the sheer options of different brands. As we learned in Made to Stick, when faced with too many options people simply make no decision. Consumers facing rows of makeup may want to feel tested affinity for just one option and this will make them more likely to decide to buy it.

    For me, this is probably why brand loyalty is the result of habitually returning to a certain makeup counter where I know a few products and feel familiar. I don’t make my decisions based on traditional advertisements (which all look the same, anyway – shiny and airbrushed). I think the only makeup that I can recite the tag line to is Cover Girl: ‘because you’re worth it’ and that is mostly because I loved American’s next top model. That was a brilliant bit of concealed advertising as a sponser of the show on the part of Cover Girl.

    Does anyone share my thoughts? Or do you guys pay most attention to YouTube or to peer reviews?

    • saijiali says:

      Thanks so much for your reply Jackie,

      I do pay attention to YouTube’s reviews, but only to my trusty makeup gurus.
      and I enjoy reading peer reviews just that I thought those are honest opinions. I think it really depends that what kind of information you choose to believe because review can be really objective. Plus, the law restricts that reviews state that whether they are reviewing under compensation so I guess people can tell whether its an honest opinion or not 🙂
      Thanks for your reply again.

  3. Amy Duan says:

    Thanks Amy Li:) I know you so it doesn’t surprise me at all that you are addicted to cosmetics as I’m addicted to food:)
    I think it’s really a typical phenomenon for girls and ladies who pursue beauty. We feel happy when we feel we spend little amount of money on something that has far more value and we love to spend money on those kind of deals even we don’t need it. That’s why you have most of the samples and free gifts that you never use.
    However as for me, I’m kind of a rational buyer when it comes to cosmetics. I won’t pay attention to cosmetic product until I really need something or I used up one. So I kind of use a bundle of cosmetics for quite a some time without buying anything. However I will be affected by friends’ recommendations. I don’t spend lot of time on online reviews since I feel cosmetics products really depend on different people, I won’t trust someone I don’t know. I guess it’s also because I’m not that professional so that I won’t take risk buying an expansive product and find out later that it doesn’t fit me at all.

  4. Qingwei says:

    Thanks Amy for sharing your insights!
    The marketing strategy of cosmetic brands worked well on me in the first year I came to the US.The American skincare products and cosmetics were high priced in China. When I came to the US and found that many renowned brands became affordable and often had deals, I could not help buying a lot of them. Just as you said, I also wasted money on unnecessary stuff to get free samples or to reach the amount of free shipping. However, I became much more rational this fall when I realized I had so many samples expired and I did not even had a chance to use them.
    The strategies of free samples and gift packs are very useful in boosting sales but more strategies are invisible and have greater influence on girls. The packages of cosmetics are so important that I know some girls who base their buying decisions of perfumes on the the design of bottles and they enjoy collecting all kinds of fragrance bottles. Cosmetics like Paul & Joe, Anna Sui and perfume like Marc Jacobs Daizy all have iconic product designs. The appearance of these cosmetics are more appealing to the consumers than the features.Other brands like Estee Launder used the concept of preventive skincare and established long-term emotional bond with the consumers. We’ll never know whether the ANR serum does what it claims because it claims that we can only know the magic effect after 10 or more years. These are more of branding strategies than promotional strategies. For promotion, the most appealing strategy to me now is discount. I would prefer an eyeliner with 20% off discount to an eyeliner at full price with a mascara I do not need.

    • saijiali says:

      Thank you Qingwei for your reply!
      I am glad that you have became a rational buyer now, I have to work on that as well!


  5. Ziwei Guo says:

    Thanks for sharing these cosmetic marketing strategies with us, Amy.

    To tell you the truth, I have fallen into at least 3 marketing traps you mentioned in this blog. Although I am not a makeup addict, I always purchase different kinds of skincare products online when big promotion is available, finally ending up buying things I don’t really have to buy. But I really enjoy the feeling of opening the package and discovering the free N-piece gift set worth more than $100 dollars.

    However, my purchase decision making is getting more and more rational these days. Sometimes free gifts or samples alone may not attract me unless my friends recommended me certain products of the brand. Personally, I would be reluctant to risk trying new products myself. Instead, I prefer to take the other’s advices. That is to say, referral is another important factor which influences my purchasing decision making.

    This reminds me of the findings I get from the research on SHISEIDO skincare products. The average participants our team interviewed list referral (recommendation from family members and close reliable friends), features (the function of the product) and reviews (user experience posted online by netizens) as the top 3 factors influencing their decision making process most. Promotion is not on the top-3 list! Although the sample size of our research is small, I find that the opinions toward promotion vary among different people during my interview. Two consumers couldn’t stop buying products because of promotion. However, one consumer told me Estee Lauder and Lancome provide too much promotion such as free gift sets which make them not that high-end. Another two consumers hold the idea of ‘Price equals to quality’ and best products don’t come with promotions. As you can see, not all the consumers will fall into the promotion traps.

    My research results may not be representative enough, but the findings at least show us that consumers weigh these factors differently so that cosmetics marketing strategies could not be only focused on promotion part. How to keep loyal customers? How to get loyal customers speak for the brand and get more potential customers to be involved? The power of referrals could never be overlooked.

    • saijiali says:

      Thank you Ziwei for your reply!

      I think your findings are really important and useful, thank you so much for sharing them with us!

      Have a great day!