The cosmetic market in the MENA region alone increased by $3.8 billion in 2020 alone. The growth is expected to grow similarly in the coming years. Despite the increasing demand, it is a highly competitive environment. Businesses must understand the dynamics of the industry, the risks associated with the products, the product category most in demand, and more, before investing in the industry.
Product Usage
Cosmetic product industry growth is majorly driven by a population that prefers to keep themselves well-groomed and stay attractive, while also taking good care of their skin, hair, and body.
Identifying the product's use—personal, commercial, or as a gift—is crucial for shaping effective product and marketing strategies, a process informed by our insights into Kuwait's cosmetic market. Our market research found that 98% of respondents use it for personal use, while only 18% use it as gifts. Thus, marketers must emphasize the value of “owning their brand” when creating marketing campaigns.
Product Segmentation and Purchase Cycle
In the cosmetic industry, there are the following product segments :
- Make-up
- Skin Care
- Body Care
- Hair Care
Under each, the following products such as the follows :
- Make-up: Face Powder, Body Powder, Compact Powder, Prickling Heat Powder, Cold Cream, Vanishing Cream, Foundation Cream, Emollient Cream, Cleansing Cream, Lotion, Lipstick
- Body Care: Body lotion, Body scrub, Body oils, and Shower Gel
- Hair Care: Hair Shampoo, Hair Mask, Hair Conditioner, and Hair Serum
- Skin Care: Face mask, Skin cleanser, Face Scrub, and Face Toner
When asked which of the market segments they most bought, the majority mentioned Skin Care products (81.5%). This was followed by Make-up and Body Care (both at 68.5%) and Hair Care (64.6%)
Distribution Channels
Poixel analyzed two primary distribution channels: The offline channel (i.e. retail stores) and the online channel (i.e. Mobile and Web Applications)
People value the act of physically interacting with the cosmetic product before purchasing it. An increasing majority of people responded that they buy beauty and care products through retail outlets (83%), followed by 48% of respondents who shopped through websites and 37% who shopped through mobile applications.
When it came to purchases made through mobile and web applications, the purchases were based on two reasons: Previous experience (44%) and Recommendation from family and friends (38%).
It indicates the reason behind choosing one brand over the other is largely based on positive previous experience with the brand as well as positive reviews from family and friends.
This connects with the previous data that consumers prefer to shop in retail stores for the benefit of interacting with the product. Thus, businesses must deliver a positive experience to enhance their brand loyalty.
Enhancing Brand Loyalty - 10 Key Areas
Brand loyalty in the cosmetic industry is the result of seven factors which include brand name, product quality, price, design, marketing, service quality, and store environment.
→ Brand Mark
Brand Mark is crucial in developing brand loyalty with consumers. The conducted survey at Poixel found that 33% of respondents look for the brand mark as a criterion for purchasing cosmetics.
When the industry includes several alternative brands, consumers prefer to trust major established brand names. Hence, the brand mark and its perceived image attract consumers and result in repeat purchases and a reduction of price-related switching behavior.
→ Product Quality
Product quality is equally important in developing brand loyalty as our survey showed nearly 75% of respondents take into account product quality before purchasing. 27% see the materials used in the product and 29% purchase the product if the smell is good.
When it comes to product quality in cosmetics, businesses must consider color and smell, product features, and performance. A product’s smell and color must be appealing to customers, so they feel good and perceive it as having good value.
Furthermore, the product needs to maintain demanding features such as being breathable, dry quickly, waterproof, lightweight, and durable. For instance, women wear cosmetics at work, for sports, and for leisure activities, so the products must perform in these situations to maintain high quality.
→ Price
Our survey found that 48% of respondents shop for cosmetics based on the best price. Price is the second most important consideration, after product quality, for the average consumer. Consumers showing increased brand loyalty are more willing to pay a premium price since they value the brand mark and their product quality. Since product quality is a major consideration, businesses must create high-quality products that are competitively priced to thrive in Kuwait’s cosmetic industry.
→ Design
An item's design includes lines, shapes, and details that affect how consumers perceive the overall brand. Our market research showed that 15% of respondents look for attractive packaging and design in cosmetic products. Style-conscious consumers gravitate toward brands with stylish packages. An attractive design with the right placement of elements and the use of color can create a lasting brand identity for the business.
→ Store Environment and Service Quality
Since we have established the importance of offering positive experiences to consumers within the retail store, it’s equally important to construct the store environment from the color and material used, to the on-hand support from the sales staff.
Consider the example of Mac, which currently occupies a 24% market share in Kuwait. By using black and white colors and glossy materials, they have made the aesthetic of their store feel minimal. Using just two complementary colors ensures a stressless shopping experience for the user.
Shiny and glossy interiors are quite common in the beauty industry since they invoke a sense of luxury, cleanliness, and minimalism. The in-store staff allows consumers to experiment with the products and educate them on their applications. The store must also include space for product presentations, pop-up displays, beauty services, and video shoots to name the least.
It is vital that businesses create immersive shopping experiences for consumers to result in increased brand loyalty and ultimately sales.
→ Promotion
The final element that builds brand loyalty is an effective marketing strategy for the business. In the current business environment within the pandemic, marketing activities have changed. We find consumers receive information primarily from two sources: TV and Social media. In our survey, nearly 80% of consumers bought a cosmetic product after seeing an advert on social media without prior experience. More so, 67% purchased a product after it was advertised by an influencer. Hence, it’s crucial for businesses to make use of the platform for marketing purposes.
Mac relies heavily on influencers to promote its products. Nadine Nassib is their brand ambassador in the Middle East. Hence, businesses must pick relevant influencers to become brand ambassadors of the brand to succeed in social media marketing.
→ Trained Sales Staff
It is essential that businesses keep trained professional staff at cosmetic stores to properly guide consumers and suggest the best product for their needs. The in-store staff can allow consumers to experiment with the products and educate them on their applications.
The store must also include space for product presentations, pop-up displays, beauty services, and video shoots to name the least. Key skills the sales staff must be effective communication, and presentation skills, and must be experienced in the cosmetic industry. This not only will result in increased consumer loyalty but also increased sales for the business.
→ Make your Consumers Involved
Loyal consumers are strong brand ambassadors. Most brands have rewarded their customers by posting their photos on their social media when they use their products. Like so, they feel good and become more loyal to the brand, thus resulting in organic WOM (word-of-marketing). When consumers tag your brand and share it on their stories, share it on your profile as well. Become a brand that values consumers’ opinions. It will also give valuable insight into the best products and what consumers love about them.
→ Invest in a Good Application
A good mobile application relies on certain factors. An intuitive design that focuses on the UI more than the UX, both being important. Brands should use professional images and construct an easy checkout system. Geofencing is also important for location-based marketing. Furthermore, encourage users to leave a review for the application. Our research showed that nearly 75% of consumers evaluate the mobile or web application before using it for purchasing.
→ Consumer Loyalty Programs
Brands such as Sephora have Loyalty Programs to reward loyal consumers with exclusive offers and events. The brand has 3 Tiers. Upon joining, you get White Beauty Pass status. By doing purchases, you earn points and reach 200 points. Once you have reached 1500 points, you unlock Gold Beauty Pass status. Each tier gives exclusive benefits. Such programs show that the brand cares for its loyal consumers and it resulted in organic WOM.
Risks Associated with the Industry
Like any competitive market, the cosmetic industry also has its related risks that businesses must be aware of. In our survey, it was discovered that 45% of respondents have been exposed to skin and other health problems due to the use of cosmetics. Businesses need to focus on product quality and offer variations that cater to many types of people (i.e. people with sensitive skin).
As well, 30% said they had been subjected to fraud while ordering online, while the rest said there was no fraud. As a result, companies must educate potential consumers about the process of placing an order online in order to reassure them.
Conclusion
Poixel's market research indicates that Kuwait's cosmetic industry is on the rise, with a growing demand for competitively priced, high-end products. To stand out in this vibrant market, businesses need to cultivate a distinctive brand identity, enhancing their brand's perceived value and appeal.
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