RFID for the Beauty and Personal Care Industry

Digitally transformed: mastering beauty’s challenges

Beauty and personal care retailers and brands are facing two main challenges: To provide their customers with a seamless shopping experience by merging the digital and physical retail worlds, and to ensure supply-chain integrity. 

A new era for beauty and personal care

Beauty retail channels like pick-up-on-curb and virtual stores are proliferating. More than ever, consumers expect to buy what they want anytime, anywhere, wholly on their terms, creating a greater need for a seamless shopping experience. Beauty companies are feeling the pressure to safeguard their brands’ value, independently of the distribution channel, while also providing new ways for consumers to interact with their product in a safe and efficient way. Digitally enabled platforms like virtual try-ons are on the rise, and online shopping for beauty is quickly becoming the norm. 

The new face of the beauty industry: enabling seamless shopping and supply chain integrity

The beauty industry is going through seismic changes. From supply-chain management to inventory visibility, richer consumer experiences, and more ethical methods — technology is at the heart of this transformation. By adding a digital identity to every product, Avery Dennison’s digital ID solutions such as RFID can help brands stay relevant while still improving their bottom line.

  • Inventory accuracy: Only by creating a seamless dialog between what’s in store, what’s in the stockroom, and what’s being sold online, can brands create a better, more seamless shopping experience and fully optimize their inventory.
  • Flexibility: The main driver of sales in the beauty industry is variety, whether it’s in-store or online. Product demand has dramatically evolved over the years, and it has highlighted the lack of flexibility within brands’ supply chains. Customers are becoming agnostic to channels, and expect to be able to purchase what they want anytime, anywhere. Having a flexible supply chain enables beauty brands to quickly adapt to new circumstances and respond appropriately to unforeseen shifts in product demand. This is crucial for customer satisfaction, and has a direct effect on brand reputation and loyalty. 
  • Brand protection: In 2018, 26% of 6000 Health, Safety & Security related seizures by the U.S. Department of Homeland Security were counterfeit beauty and personal care goods. The beauty gray market endangers consumers and poses a high risk to brand reputation and integrity. With the growth of e-commerce and social media, it is now easier than ever for counterfeiters to make their products available to consumers. Thanks to RFID technology, brands can track and trace every single item from point of manufacture to point of sale and beyond. This helps curb diversion, reduces profit erosion and ultimately creates a higher level of trust between consumers and brands.
  • Sustainability: It is common for beauty brands to overproduce products in order to ensure a wide selection at all times. This often leads to unwanted excess - as trends change quickly, and not all inventory is sold in time or before expiration date. The energy and raw materials expenditures to manufacture, distribute and often dispose of this excess can be very high, and comes at a cost for the planet and for brand equity too. The radical improvements in inventory management afforded by RFID enable brands to optimize their production, ultimately reducing excess and waste, improving both the bottom line and brand trust.
  • Innovation: Our beauty-ready RFID tags are specially designed to work on metal packaging and on packaging containing liquids, which means they can be quickly and reliably read in parallel. Thus, individual items can be identified not only in the dense merchandising environments typical of beauty retailers, but also at carton level, as products leave the distribution point and enter store receiving. Avery Dennison was the first RFID media supplier to offer an on-metal tag with those capabilities at a price that makes high-volume tagging feasible. Our product portfolio offers complete solutions for tagging beauty products, at the factory, distribution center and in store.
  • Consumer engagement: As online beauty sales continue to increase, brands look to diversify the way they engage with their audiences - without the need for ambassadors or middlemen. With RFID, shoppers can interact with your product in a way that goes beyond the point of sale; our Janela™ solution enables brands and retailers to connect and communicate with consumers via their products. By assigning each item a “digital personality”,  brands can transform their marketing efforts, increasing customer engagement while also capturing real-time data and consumer insights for every product, from manufacturing to end-of-life.

So, what does that mean in practice?

How RFID technology is taking on the beauty industry’s shady gray market

The gray market is becoming an increasing concern for the beauty industry: It can harm a brand’s reputation and cause safety issues for consumers. Although this is nothing new, it has been exacerbated by COVID-19. Avery Dennison Intelligent Label solutions give products a digital identity enabling unprecedented levels of visibility, allowing brands to track and trace their products across the supply chain to counteract such diversion.

Helping EY capture the advantages of RFID for Grupo Boticário

Tags purpose-built for beauty, deep expertise, and above-and-beyond collaboration made Avery Dennison the right partner for the beauty industry’s first RFID deployment in Brazil. Seeking end-to-end traceability across its increasingly complex supply chain, Grupo Boticário hired EY to help test RFID tagging for six months in 2018. The results reduced stockouts by 97%, decreased labor by 14%, and increased revenue.

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Digital Identities: Technologies that propel beauty brands and retailers in these unprecedented times

Seamlessly merging the physical and digital world has become imperative and the lack of end-to-end, item level clarity has proven to be detrimental to retailers who have to juggle ever-evolving consumer demands — especially during COVID-19. In our latest webinar with WWD, we explored the role of digital identities for Beauty, opening up a conversation on how digital transformation is necessary to future proof the industry.