Does the subscription model work in the Beauty sector?

In a world where the digital transformation is becoming more of a reality with each new day, some business models that worked very well offline are starting to make headway into the online world.

If there is one such model that has shown numerical growth in the beauty and luxury industry in recent months, it is the subscription model.

A model that is preferred by certain labels and entrepreneurs, although all that glitters is not gold, because not all companies can adopt this approach. A lack of scalability, logistical problems and a lack of content can lead a subscription model to fail. However, in the beauty industry this model is becoming increasingly popular.

In a survey carried out by Tinuiti in the United States in 2019, 47% of those asked said they subscribed to a brand for shaving, make-up or facial products. According to the consulting firm McKinsey, sales grew by 30% in 2020 to reach some $7.5 billion, with Generation Z being the biggest spenders, interestingly, despite the common belief that they have very small incomes.

Everything suggests that this business model for the beauty industry is here to stay. Companies like Guapabox, Bodybox or Look Fantastic have barely noted the impact of the pandemic as it has not caused a substantial change in consumer behaviour, with customers maintaining their routines. It is true that sales of make-up have fallen, but hair and skin care products have stayed steady. The drop is higher for men than for women.

What has changed in terms of consumer behaviour is communication, because during the pandemic, friendship groups were more influential in terms of beauty shopping and subscription models.

The recommendations of micro-influencers, with around 15K followers, had more success than the macro-influencers, with Facebook generating the most purchases through social media, way above Instagram, Snapchat and TikTok.

LuxStyle Consulting analyses your business model and your customer behaviour, increasing communication in the areas where you need to strengthen your competitive advantage.

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Juan Borges

AdminDoes the subscription model work in the Beauty sector?

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