In brief

In brief

  • The direct-to-consumer revolution is overturning decades of conventional retail wisdom for beauty brands across the world.
  • Combined with rapidly changing consumer expectations, it’s forcing a radical rethink of business models and value chains.
  • But maintaining profitability in the transition to hyper-personalized, omnichannel, and agile retail needs careful management.
  • This report explains why cloud technology is the foundation on which future beauty retail is being built—and how to get the transformation started.

The beauty industry faces up to a new consumer landscape

Across the world, a fundamental change is taking place in the way beauty and personal care products are bought and sold. Driven by evolving consumer expectations—and accelerated by COVID-fueled digital adoption—brands are pivoting away from the wholesale model and selling direct to their customers.

To do this at scale, beauty and personal care brands are having to rethink both the business and the operating model. That’s because the new consumer landscape places very different requirements on how the business functions.

This includes everything from the way products are manufactured, distributed and sold, to the way the business segments its customers and targets its marketing spend. It also requires a rethink of how the business provides seamless customer experiences over multiple sales channels, and which back-office tools and platforms it uses.

Eighty-nine percent of people would now consider in-app ordering, and 88 percent would consider home delivery.

A pivotal moment for profitability

The scale of the change underway means beauty and personal care brands should be looking to transform their previously linear value chains into agile and multi-dimensional delivery models that are better aligned to consumer preferences.

Three capabilities in particular are essential:

Hyper-personalized customer interactions

Leveraging larger data sets in near real time to create dynamic customer records capable of serving a “segment of one”.

Omnichannel retail experience

Ramping up omnichannel D2C sales with seamless consumer experiences, innovative “beauty tech” capabilities, and integration with the ERP backend.

Agile and responsive supply chains

Accelerating the shift towards product customization, D2C delivery models and a higher proportion of manufacturing to order.

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The stakes are high. Get the transformation right, and a beauty brand can expect to enjoy accelerated growth and a direct one-to-one relationship with consumers. However, Accenture’s analysis suggests that, handled badly, a transition from wholesale to D2C can destroy profitability in the short term.

Cloud is the new foundation

This is why it’s vital to manage the transition in a considered and sustainable way. And one capability is critical in that transformation above all others—the cloud.

By simplifying and standardizing technology architectures in the cloud, beauty brands can not only increase their agility and flexibility, they can also create a platform for the consumer-centered innovation that will be vital for their future growth.

Whether it’s managing and analyzing data cost-effectively at scale to deliver hyper-personalization, providing the infrastructure performance to support seamless omnichannel D2C retail, or enabling the flexible connectivity that drives transparency and agility across the supply chain, cloud is the foundation on which the future beauty industry is being built.

The goal? To create a simplified core platform in the cloud complemented by an ecosystem of decoupled and resilient cloud applications and capabilities that enable real-time integration and the free flow of data insights across the organization.

How to get started and see the beauty of cloud

It’s not too late to scale up cloud adoption for this new beauty and personal care landscape. But the need is urgent and the time to act is now. The pandemic has dramatically accelerated digital adoption across the world and the gap between the leaders and the rest is growing every day.

A mature customer-centered D2C capability will be all the more important as brands look ahead to a post-pandemic world, in which the demand for human social contact—and thus beauty and personal care products—will likely be explosive.

To help get started, the report sets out three priority actions:

Fix the vision to the strategy

Define a clear strategy for a cloud-based business transformation powered by data insights.

Make the value case

Conduct a rapid current-state cloud assessment to quantify the value still to be unlocked in the cloud.

Define the roadmap

Set out 3-5 priority applications for cloud and consider launching a Cloud Center of Excellence to drive up adoption with an experimentation-led approach.

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