May 2019 | News | Vertical Focus

VERTICAL FOCUS | Beauty Products

Tags: Supply Chain Management, Retail Logistics, Supply Chain

Function of Beauty lets consumers customize hair-care products, which can tangle supply chain operations.

The latest news and trends impacting the beauty products supply chain.

Blooming Beauty Trends

In the cosmetics and beauty products industry, every year brings fresh challenges to the surface. Current trends are tied to changing consumer demands for transparency, sustainability, and customization.

Transparency is a hot issue in the cosmetics supply chain. Consumers and regulatory agencies want more insight into how cosmetics are manufactured. In the past, process regulations served simply to avoid repeating past errors. Today, best practice guidelines are evolving to make detailed information on raw materials and batch processing available.

Consumers also want their beauty brands to show the environment a little more love. To answer that request, cosmetics companies will focus on reducing and repurposing waste, as well as minimizing raw material damage, as buyers continue to emphasize a desire for their brands to embrace eco-friendly manufacturing and supply chain practices.

The trend toward customizable cosmetics continues to show an uptick. Up-and-coming brands such as Function of Beauty, Prose, and BITE Beauty promise consumers a tailored-for-you experience with one-of-a-kind products to satisfy their unique needs.

These companies face the supply chain challenges—ever-changing inventory, unique consumer profiles, and shipping accuracy—inherent in offering customizable products.

Ulta Supply Chain Sitting Pretty

Beauty products chain Ulta Beauty has been posting some pretty profits lately, and it credits supply chain improvements for its growth. The company's 2018 fourth-quarter sales increased by 9.7%; for the full year, net sales increased 14.1% to $6.7 billion.

CEO Mary Dillon is focused on revamping the enterprise's supply chain. She pushed to open a new distribution center in Fresno, California, which is currently serving 235 stores. And to meet customer demands for speed, the company plans to provide two-day fulfillment by converting its Romeoville, Illinois, DC to a fast fulfillment center and opening a similar location in Jacksonville, Florida, by 2020.

As part of its supply chain realignment, Ulta is also phasing out its Phoenix, Arizona, distribution center in an effort to cut back on unnecessary expenses and redirect responsibilities.

Fast Facts

  • $429.8 billion: Anticipated value of the global cosmetics market by 2022
  • 14%: Estimated U.S. share of the global cosmetics market in 2018
  • Approximately $79.8 million year-to-date U.S. revenue generated in the cosmetics and personal care market
  • 9.7% of total e-commerce sales will come from health and personal care products in the U.S. in 2023





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