In 2011 in France, online sales accounted for only 2% of the turnover of selective perfumery retailers. However, online sales of perfumes and cosmetics in upscale scores scored much higher in some other European countries such as: Austria (6%) and the Czech Republic (20%). While these figures show an important development potential, it is nevertheless important to remember that online sales are far from being the only big stake in this business.
For William Koeberlé, chairman of the Marionnaud group and of the French Federation of Selective Perfumery (FFPS), internet is now fully integrated in a retailer’s business. “Two-thirds of shoppers visit the web for information on the products and on innovations," he said. An opinion which is fully shared by Franck Lehuédé, Senior Project Manager at the Consumer Department of Crédoc, a French research firm specialising in consumer studies. "Internet is about purchase, but internet is also, specifically, about purchase preparation." Thus, both brands and retailers strive to follow their clients on Google, blogs, Facebook, YouTube, Twitter or Pinterest.
For Robert Leygues, President of the European Federation of perfumery retail trade (FEPD), the development of e-commerce fits quite naturally in the irreversible logic of an increasingly digital world: "We must learn to live intelligently aside this form of commerce and take advantage of the web whenever possible.”
For all the operators, “it is a permanent training process in order to invest these multiple channels and not lose sight of the consumer," said William Koeberlé.
Consumers’ choices
For retailers, there is no doubt: Internet will become a major media to influence consumers’ choices and preferences.
In much of Europe, consumers are convinced that their purchasing power would decline in the coming years. They will have, in particular, to face with the continuous increase of their “unavoidable spending” - such as housing, food and energy - which now represent 33% of the budget of French households, against 25% in the 1960s.
In spite of this negative outlook, the Crédoc’s researchers observe, among French consumers, a strong desire to invest in knowledge, not only in professional knowledge but also in personal knowledge, which is associated with "a strong investment in self-image" and eventually in personal appearance. Enough to leave rather high hopes to the industry of cosmetics.
In order to succeed in the game, Franck Lehuédé thinks industry should place innovation at the centre of new product developments and be able to reassure consumers about “the ethics of products,” including consideration on issues such as climate change, biodiversity preservation and fair trade with small producers.
The risks of a "pirates’ network"
But if the internet can be a great tool for placing consumer insights at the heart of a development strategy, it can also be used for harmful practices, especially in a difficult economic environment.
Cybersquatting practices, purchasing of sponsored links, development of rogue websites [1] or illegal use of consumer-to-consumer commercial websites (such as e-bay, LeBonCoin.fr, dinkos.com.au, etc.) have contributed a huge development of the trade of counterfeit goods and parasitic grey markets. So much so that "on the internet, counterfeiters are always ahead of brands,” said according to Manlio Pizzorni, Regional Vice President Western Europe and Middle East, Coty Prestige.
As far as the FFPS is concerned, the trade association recalls it fully supports the development of this new distribution channel provided it keeps strictly compliant with the rules of selective distribution. That would normally prohibit pure players to distribute high end products from being distributed in the selective network in Europe. "That is why the French Federation of Selective Perfumery (FFPS), with the support of its members, while reaffirming its commitment to respect the free competition principle, especially in the field of online sales, has decided to raise the awareness and French and European authorities regarding the risk that may represent the development of e-commerce websites by pure players selling perfumes and cosmetics away from the European legal framework,” concludes William Koeberlé.
