E-commerce and natural cosmetics: challenge and opportunity

Ramon Stroink at the Weleda store in Berlin. Photo © Karin Heinze

Ramon Stroink is Managing Director of the natural and organic cosmetics division at Weleda for Germany, Austria and Switzerland. He is also on the advisory board of Vivaness and the German industry association for cosmetics, detergents and cleaners IKW. We talked to him about the development of the natural and organic cosmetics market in the German-speaking area and the growing challenge of digitization and its opportunities.

According to the figures and trend analyzes of the IKW, natural and organic cosmetics continue to be the driver of the cosmetics market - can you confirm this from Weleda's point of view for the markets you are responsible for?

Yes, natural cosmetics remain a growth market. This applies above all to the European foreign countries and the markets overseas. However, the largest natural cosmetics market in Europe, the German market, suffers in the growth in sales under the price competition of the drugstore chains, which could once again expand their market share in 2017.

Digitization continues to increase - what role does e-commerce play for natural and organic cosmetics - in the European and non-European area?

Globally, e-commerce is a good marketing channel for brands active on the international stage. Given that convenience shopping has become very important, the permanent availability of goods is a need of many, and given the fact that there are five billion smartphones worldwide, we must recognize that the competition for all stationary retail is inside every bag.

What challenges do natural cosmetics companies face through online trading?

These five billion smartphone owners are potential customers. The digital devices are a new distribution channel. In my view, it is particularly important for natural and organic cosmetics companies to understand that it is no longer enough to be present on the Internet, but you also have to be active. That's what consumers expect. We have to be aware that the boundaries between traditional distribution channels will be leveled out, or sooner or later completely eliminated. Manufacturers and stationary retailers must learn to handle this. The advantages of brick-and-mortar retailing compared to the online offer must therefore be emphasized even better. The specialized trade has better opportunities here than the mass market.

Market researcher Mintel found a growing trend in digitalization. Photo © Mintel

What opportunities do you see - for example, in marketing?

The digital society not only uses its smartphone for shopping but also as an information portal. The customers are very well informed today, they research and share their knowledge on social media channels - I see this as an opportunity, especially for organic food and natural cosmetics as an alternative to conventional products. When a company remembers and communicates the core values ​​of its brand, that makes the brand more resilient. This puts the experience more in the foreground - important for stationary retailers as well as for brands.

Nice atmosphere in a brick and mortar store versus webshop. Photo © Karin Heinze

In which areas must companies invest in order to be prepared for the digital future?

Today enterprises work more intuitively, more interdisciplinary, in collaboration with multipliers and influencers in the social media - this is no longer classic advertising. This must also be implemented internally within the company and results in structural changes. Just as the boundaries between the distribution channels are permanently falling, so too are the boundaries between individual departments in the company. An attractive, well-maintained webshop with many pictures, consultation offers and intuitive operation, that's what you need. In any case, it is important to stay open and flexible. That is, attitude and openness of employees for change become even more important.

What is your forecast for the next few years in terms of digitization for the industry?

In the US, 20% of the cosmetic kit is already online. Although this refers to the overall cosmetics market, if you look at Germany, forecasts for the development of e-commerce are quite dynamic. And natural and organic cosmetics are surprisingly far ahead in the favor of online shoppers. It also applies to events and trade fairs such as the Vivaness to record these developments and set appropriate accents. For example, the trade fair management with blogging events has already achieved this quite well. For professionals, such as the consumer, the verbal and not just digital exchange also has a not to be underestimated importance.

Thank you very much for the talk Mr. Stroink.

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Vivaness: German natural cosmetics market by far the biggest in Europe

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