A key part of any successful eCommerce business lies in logistics management; and cosmetics are some of the most complex freight to handle.
Consideration needs to be given to the entire process so that an online beauty business can be profitable and fulfil orders efficiently and safely. There are a number of issues in cosmetics distribution that require high levels of process visibility:
- Handling and tracking high volumes of products
- Organizing thousands of SKUs for picking
- Understanding temperature and handling restrictions
- Conforming to export/import laws and workplace regulations
- Order accuracy
Additionally, attention needs to be given to import and export regulations. Every country and region in the world has different laws surrounding cosmetics and beauty products, ranging from restrictions on cosmetics goods and customs limits to GST and hygiene permits.
Online cosmetics retailers need to find ways to move products quickly in order to keep up with demand across borders. Paul Cali, director of North American logistics at Avon says getting cross-border logistics right is important:
“Beauty consumers want their hot product now, and they do not want to wait… Logistics plays a key role in driving customer satisfaction, which is a competitive advantage”
Fabrício Orrigo, sales director for Penske Logistics South America agrees:
“To thrive in the current business climate, cosmetics logistics managers and third-party logistics (3PL) providers must handle high volumes of product, understand temperature and handling restrictions, navigate licenses, and ensure on-time delivery at a competitive cost”
Efficient supply chain management is critical however visibility into logistics and transportation can be a major problem for some retailers selling across borders. According to the GEODIS 2017 Supply Chain Worldwide survey, just 6% of companies believe they have full supply chain visibility, and it all comes down to communication. The use of manual processes and older technologies, or even relying on marketplaces to take care of logistics, can lead to a lack of visibility into deconsolidation, live data, as well as delays in shipping, missed deadlines, fines and crucially, dissatisfied customers.
Valerie Bonebrake, senior vice president at supply chain consultant Tompkins International says large multinationals that distribute across the globe don’t have a lot of visibility over their final mile deliveries:
“Sometimes, when a product leaves the distribution center, it disappears into a big black hole. Cosmetics companies have to understand the process before they can improve it or reduce costs, and that comes down to good information management”
A recent study found that 94% of consumers blame the retailer for poor delivery, while only 42% blame the delivery provider, highlighting how important it is for retailers to optimize their final mile deliveries – challenge that becomes more complex when working with multiple carriers in global markets.
Richard Metzler, chief marketing officer at uShip, an online transportation marketplace said:
“The industry needs to fundamentally rethink how it does business and not just try to out-Amazon Amazon. All the retailers are struggling to figure out what to do against Amazon. There’s too much inventory from a cost and service point of view. It has to change”
The solution to combating the growing complexity of cosmetics fulfillment lies in strong processes and using software that can track every shipment to fit with today’s high standards and expectations. It is no longer an excuse for a parcel to be missing or lost. By refining internal operations, the customer experience can improve, and retailers can reduce expenses due to overstocking or understocking, increase order accuracy, and reduce the risk of shrinkage across borders. An increase in visibility of parcels at every step of the journey will enable the easier identification of issues, in turn leading to better fulfilment and improved first-time delivery rates.
Read more about global cosmetics eCommerce in our latest whitepaper, Selling Beauty.
We also explore:
- The global cosmetics eCommerce opportunity and the growth in key markets
- How social media, particularly YouTube, is driving eCommerce sales
- The king of beauty eCommerce: China
- The smartphone as a beauty tool
- Cross-border cosmetics including logistics management, distribution, returns, packaging and environmental concerns
- Counterfeit cosmetics and the impact on brand reputation
Download our free whitepaper, Selling Beauty: A Retailer’s Guide To Navigating Cosmetics eCommerce here