How to Build an Online Cosmetics Store and Cosmetics Marketplace?

According to some estimates, the cosmetics segment is first in dynamically developing world markets due to active beauty industry policy, high demand among buyers, and, of course, a high level of competition. Cosmetics and body care play an essential role in all stages of our lives and bring significant functional and emotional benefits. The cosmetics niche is in demand, especially due to the significant increase in online shopping after the outbreak of Covid-19. Facial and body care markets for men and women are constantly updated with new products appearing every day, making the range of cosmetics stores quite wide.

In this article, you will learn how to create an online cosmetics store or how to transform your single-vendor store into a cosmetics marketplace using Magento or Shopware. Ready? Let’s go!

Cosmetics Industry Overview

Cosmetics are a broad category of topical products designed to cleanse, protect, and enhance appearance. Why is this niche so special, and why is this segment experiencing such rapid growth?

Cosmetics industry insights

The global cosmetics market is expected to reach $463.5 billion by 2027. Cosmetics market analyses show that skin and sun care products, makeup, and color cosmetics have a special role in our lives.

According to a global study by WAVE9, skincare for women is a ritual of distraction from daily responsibilities, a form of relaxation and self-expression, and a way to have new experiences. For men, skincare has become more than a hygiene need too; it is also a way to express themselves and be on trend.

When searching for and buying cosmetics, people anticipate the pleasure of using the product. The impulse to search for information about cosmetics stems from the desire to keep abreast of new developments and other people’s opinions.

For many users, spending time on an e-commerce cosmetics website is leisure time. However, by creating an attractive and functional solution, you can increase your users’ loyalty and thus turn them into future buyers.

Leading cosmetics product categories

The top-selling beauty products in the USA, according to Statista, are shown below:

Soaps, skin care, and shampoos have taken the lead. Modern cosmetics products are so customer-oriented that they consider the buyer’s needs, from age, skin, or hair type to the nature of the care, allergy tendencies, and the product’s composition, color, and texture.

Various marketing strategies can retain a buyer’s attention in a competitive environment, including focusing on product perception, design, and attractive packaging. Media broadcasting also plays an essential role in the gorgeous image formation of a particular brand.

For more information on e-commerce trends, please see Most Promising E-commerce Trends in 2021

Cosmetics Industry Challenges

As in any other area, the online cosmetics store segment has specific problems and weaknesses. The beauty industry experienced deep pain over the past year as it saw some big shifts. The following are the top challenges facing the beauty and cosmetics industry in 2021.

Challenge 1: Covid-19

The pandemic has significantly impacted not only humanity but also the cosmetics industry. Covid-19 has hampered the import–export aspect of the cosmetics segment, and the consumption of beauty products has declined. According to McKinsey, in the first month of the pandemic, cosmetics sales fell by 50%. They are gradually recovering and increasing, but the damage is still great.

This pandemic was the first time the so-called “lipstick effect” did not work. This effect is seen when shoppers start buying more affordable products (lipstick, for example) instead of expensive luxury items during economic downturns or social upheavals. Because women spent significant time at home and wore a mask when going out, it made no sense to buy cosmetics.

However, for the same reasons, eye cosmetics and skincare products sales have grown as most people begin to suffer from a lack of sun and fresh air. According to the NPD Group research, the share of eye cosmetics before the pandemic was 22% of all beauty products; now, it has grown to 25%. Additionally, the online cosmetics retailer Cult Beauty claimed a 139% increase in its cosmetics sales for skin blemishes.

In most countries, beauty purchases are made in stores, with even seasoned American millennials doing more than half their shopping offline. Due to Covid-19, brands have lost one-third of their profits. Some brands may simply not survive the crisis, and most likely, they will have to close. Logically, self-isolation has forced people to buy more online, which is why online cosmetics stores are now becoming increasingly digitized.

Challenge 2: Environmental friendliness

Over the past few years, almost all manufacturers in the B2C market have noted that buyers, especially in large cities, are paying greater attention to products’ composition and labeling. Thus, price, packaging, advertising, product design, environmental friendliness, and ethics all play essential roles in product and cosmetics choices.

Buyers’ priorities regarding a product’s packaging are its harmlessness, non-toxicity, environmental friendliness in production, and ethics. Ethics in cosmetics equate to no animal products, no animal testing, and sometimes fair trade; the manufacturer is obligated to create decent working conditions and pay adequate salaries.

Challenge 3: Competitive niche

The cosmetics industry has demonstrated significant, strong growth and has tremendous potential for further development. Numerous studies have shown that the number of male and female consumers and the demand for cosmetics increase every year. Internet sales of cosmetics are expected to reach 48% by 2023.

The massive competition in this segment is due to increased awareness and the high demand for cosmetics products. The cosmetics industry has become creative and innovative, bringing unique, quality products to the market to stand out from the competition and gain a competitive edge among customers. Thus, to remain productive in business and survive fierce competition, it is critical to modernize your products and meet your customers’ needs.

Beauty Industry Trends

To build a competitive online cosmetics store, you must be knowledgeable of the latest trends, right? To help you in this area, we dove into the fast-paced beauty world to gather the most exciting and unusual digital beauty trends that attract customers and increase sales, even in times of crisis.

Personalization

Brands are building omnichannel digital services to personalize care, collect consumer behavioral data, and reward loyalty. For example, in 2021, L'Oréal plans to launch the Perso device for foundation, lipstick, and home skincare products. The composition of the cosmetics will be based on an analysis of the user’s environment, skin type, and personal preferences. Just view this innovation!

After a user photographs their face in the app, artificial intelligence algorithms determine their skin type. The user then fills in their skincare goals and based on the data, a unique formula of the product is created, which will be mixed and dispensed by the device.

What are the benefits of personalizing your cosmetics e-commerce site? You can improve several critical factors:

• Conversion
• Behavior
• The likelihood of repurchasing
• Usability and UX
• Mailing effectiveness
• Customer loyalty
• Sales funnel efficiency

Virtual try-on

Augmented reality (AR) technologies became widespread in the beauty industry in 2017 when Perfect Corp. and Modiface established themselves as the leading providers of AR in the sector.

Virtual fitting allows the customer to see the product for themselves, which increases online sales. In addition, it collects behavioral data and creates a viral effect when users share their fitting results on social media.

Cosmetics app Sephora’s set of services for virtual cosmetics try-ons include the following:

• Ready-made images and individual products
• Scanning makeup on another person and selecting similar products
• Viewing swatches on the hand
• Makeup virtual guides

Sephora allows you to test a wide range of products from different brands and add your favorites to your shopping cart in the app.

Voice assistants

Despite all the features of their products, cosmetics brands, in partnership with technology giants, are mastering the use of voice assistants.

Last year, media conglomerate Hearst, sponsored by L'Oréal, launched My Beauty Chat for Alexa, which allows you to receive beauty tips from editors at Cosmopolitan, Elle, Marie Claire, and other Hearst publications.

Shiseido, through Alexa, advises on personal care and make-up by considering the condition of the user's skin and the weather.

How to Build an Online Cosmetics Store on Magento or Shopware

How can you choose the best e-commerce CMS from the wide variety of options? Based on our vast e-commerce development experience, we recommend creating online stores on Magento or Shopware. Both CMS have a lot in common. They are both open-source, giving you endless customization and scalability as your business grows, and both have communities of developers and store owners.

Magento is one of the leading platforms in the world, with a considerable number of well-known clients such as Burger King, Moschino, Asus, Ford. It can be called the industry standard for e-commerce CMS. Magento 2’s features and configurations seem almost endless. If your market is the USA and the UK, then this platform will be an excellent choice.

Shopware is more targeted to the German-speaking market. This software is easy to learn, more understandable, and easier to use than Magento; that is why it is popular. Which one is better for an online cosmetics store?

The following can help you decide: Magento vs. Shopware. Which Platform Is Better to Choose?

Basic functionality for an online cosmetics store

Your beauty and cosmetics online store should contain the following for optimal Magento/Shopware functionality.

Home page

The homepage can lead users to information/products that you offer. It serves as a launching pad for everything users are going to do on the website, attracts customers, and encourages them to investigate the website’s pages.

Product catalog

A product catalog lists essential product details that help buyers make a purchase decision. These details include product features, descriptions, dimensions, price, weight, availability, and images.

Product detail page

The details displayed often include product characteristics, price, shipping information, reviews, and other relevant information that customers may want to know before making a purchase. Typically, this information is presented alongside a photo of the item and an “add to cart” button.

Cart and checkout

The checkout process is the series of steps a customer follows to purchase the items in their shopping cart on an e-commerce site. This includes every step that a customer goes through to proceed through to the checkout page. An ideal checkout flow will have a smooth, frictionless UX. This step requires integration with needed payment and shipping providers based on the clients’ business needs.

Login/registration and personal profile

To collect customers’ information and motivate them to return to the website, you will need authorization, registration, and a personal profile to facilitate communication.

Basic functionality for admin

Now that you have decided on the main functions of the site, it is important to have the following functionality for admin:

Order management

You will see the list of all your orders and manage the orders (change the order status, send info to the user, create invoices, implement shipment, and cancel the order).

Product management

You will be able to manage all products on the website. Likewise, you can easily add, update, and delete products, create categories, add the required structure, and assign products to categories. You can use import and export features to add/update products in the system.

Content management

Easily manage your content. You can add new website pages and edit or delete existing ones, controlling all content without a developer’s help.

Customer management

You will be able to see all registered users, including their detailed information and activities on the website. This will help you understand your customers and update the website based on their needs.

Settings and configuration

There is a variety of settings and configurations, and you will not need a developer to change settings or improve your store.

Cart and catalog price rules

You can easily create needed sale price conditions for all products in the catalog and all users or set specific requirements for customer groups to buy products at the sale price. In addition, you can select the duration of each sale condition, eliminating the need to control it manually.

Popular e-commerce extensions for your online cosmetics store on Magento

Magento’s greatest strength is its huge library of extensions, which support endless new functions and abilities. Try changing your online experience by using some of the best online cosmetics store modules described below.

Users bought together

This extension allows you to create intelligent product recommendations for your site visitors. The idea is to recommend only the most relevant products to shoppers and thus increase the average sale at your store. The first step is analyzing the interests of your regular customers and newcomers to make profitable up-sells and cross-sells. This is followed by quickly creating and promoting products together in bundle packs with fixed or percentage discounts.

Social login

Social Login & Share for Magento 2 allows customers to log into your site with their social media accounts. Social network logins increase the loyalty of users who are relieved of the need to register. An additional advantage for you will be access to the personal data of users, which can be used for marketing purposes. Statistical studies show that 53% of users log in through Facebook, and 44.8% do so through Google. Additionally, 77% of users think that registering through social networks is a good solution.

This type of authorization significantly increases conversion and gives access to users’ extensive personal information, allowing you to study their data and preferences. Such information is more reliable than what is input when registering on a new resource because most users tend to indicate incorrect data.

One-step checkout

You can supply your Magento 2 store with user-friendly One-Step Checkout to speed up the shopping process and heavily enhance customer satisfaction. The ability to check out in a few clicks will boost store revenue.

Abandoned cart

More than 80% of shoppers abandon their carts, of which 87% intend to finish ordering later. Half of refusers use the basket as a wish list. They visit the site, browse products, and compare prices but continue to question the purchase and are in no hurry to complete it. However, because they are interested in the product enough to add it to the cart, they should be allowed to return to it.

The Magento 2 Abandoned Cart Email extension helps recover all your customers’ forgotten carts by assisting them with returning to your online store to complete the checkout quickly.

Popular e-commerce extensions for your store on Shopware

What plugins should be a part of your Shopware UX to make your work more efficient and easier? To help sort the options, we have selected the best Shopware extensions for online cosmetics stores to optimize your performance.

One-page checkout

The standard Shopware order process is spread over three steps, which means that customers have to click through several pages. With One-Page Checkout, your customer can see all the essential information at once, greatly simplifying the ordering process and dramatically reducing the order cancelation rate.

Abandoned cart

With the Abandoned Cart extension, you can track customers who added products to their cart but did not complete the checkout. You can select the sales channel, send an automated email notification, define the cart abandonment time, and set a custom subject line and email message with keywords.

Social login

This plugin makes it easier for your customers to log in and register in your shop. Even registered customers can log in with their social media accounts, but the email address must match the provider’s email address. New customers can optionally complete their registration process so that all relevant customer data are available at the first login.

Similar products

This plugin offers the option of displaying other products from the same category or parent categories (depending on the configuration) right on the product detail page.

Custom feature development for your online cosmetics store

Below, we describe which custom functions are suitable for your online cosmetics store and how best to arrange them.

Subscription option/regular order

With this function, users will subscribe to needed cosmetics and have an automatic regular order, such as once a week or once a month, eliminating the possibility of running out of their favorite cosmetics. The benefits include saving their time, improving customer satisfaction, and ensuring repeat purchases.

Finder quiz

Customers are often unsure about which foundation shade to choose or which product is needed for their skin type. Nobody likes to pay for something and wait for delivery only to find that it is not a good fit. An excellent solution is a finder quiz, where the user answers a few simple questions, and that’s it! The system will propose the most suitable products.

Color swatches

You can show color swatches for makeup products to provide the best shopping experience. With swatches, customers will be 100% sure that they are not in a “reality” vs. “expectation” scenario because all colors on the website will look the same as in real life.

Pick-up in-store option

If you already have an offline store, you can provide an in-store pick-up option, including the opportunity to see what products are available and where.

Integration with an ERP system

If you use a third-party system for your inventory management or accounting, you can easily integrate this system with your new cosmetics website. With both systems synchronized, there will be no worries about missed data.

Magento themes for online cosmetics stores

When developing an online cosmetics store on Magento, there are two possible approaches: choose a ready-made theme or build your own. While both options have pros and cons, if you select a ready-made theme, we have suggested some makeup store templates that you can use below.

Face Art

The Face Art Magento Responsive Theme is perfect for running an online store in both web and mobile versions. This responsive theme is designed for cosmetics and beauty stores and women’s clothing. All the subpages are customizable, and the theme is clearly and professionally designed, which results in an attractive and clean appearance.

Harosa

The Harosa cosmetics Magento theme is one of the best options for beauty and cosmetics online stores. This professional theme has a neat layout, many intelligent features, and a responsive version. This theme also has a mega menu that displays all product categories and subcategories, making it easy for customers to find everything they need. You can attract clients worldwide with this theme’s multilingual and multi-currency support.

Shopware themes for online cosmetics stores

There are also excellent themes for online cosmetics stores on the Shopware platform, as shown below.

Sphere

With the Sphere theme, there is no need for a developer! You can create your online cosmetics store using your individual layout in just a few clicks. This theme is suitable for personal care, beauty, and clothing stores. It is fully responsive and scalable, and the logo and category navigation can be customized individually, among many other benefits.

Fifteen

The Shopware’s Fifteen theme is specifically designed for cosmetics, health products, and bio-health products. This theme is based on a basic template, making software updates relatively easy.

Do you want to see what other themes you can use? Read our article Top-Rated Makeup Themes for Magento and Shopware for a more comprehensive selection and detailed descriptions.

How Much Does It Cost to Develop an Online Cosmetics Store on Magento or Shopware?

The approximate minimum price for creating an online cosmetics store on Magento or Shopware is around $15,000. The price is indicated only for the basic functionality. To develop a full-fledged functional product, you may need additional paid custom features. Contact us to explain your business needs, so we could calculate the cost more accurately.

Why Transform Your Online Cosmetics Store into a Marketplace?

Today, a successful online store can be transformed into a marketplace, as seen with industry giants like Amazon or Alibaba. The marketplace brings together different suppliers, thereby expanding the available range. This attracts visitors who want to see a wide variety of products.

When an online store grows to a certain level, the market itself begins to help it. All participants are interested in such stores, including suppliers, customers, and buyers. Socio-economic laws start to work for the company, and it takes off. If you have a successful online store, have you thought of launching a marketplace as well?

According to statistics, 87% of B2B buyers prefer to shop online in the marketplace because brands offer a more comprehensive range of services and products than regular online stores. Thus, buyers can compare the price, quality, and availability of goods and make a choice based on their preferences.

For more on this topic, see Marketplace or E-Commerce Site: What Is the Best for Business in 2021?

Basic Magento/Shopware functionality for an online cosmetics marketplace

Your online cosmetics marketplace should have basic functionality, as follows:

For users:

• Each user can apply to become a seller on the platform.
• A user can be a seller and a buyer at the same time.
• Customers can give product ratings and reviews.
• Customers can view all product details given by the seller.
• Customers can place orders for different sellers’ products using the same cart.
• Customers can check out once with multiple sellers’ products in their cart.
• Customers can see the sellers’ pages with all added details.
• Customers can add reviews of the seller.

For sellers:

• Dashboards: These are complex due to all the needed information and statistics for the seller and sales at their shops.
• Settings for the seller profile: Sellers will be able to set the needed information and settings for the shop.
• Product management: Each seller will be able to easily add, update, and delete products in their stores.
• Order management: Sellers will be able to see all orders placed in their store, including the needed details.

Admins should be able to

• Set the option to auto-approve the seller.
• Set the option to auto-approve the seller’s products.
• Approve or disapprove a seller and/or their products manually.
• Mass assign products to a seller.
• Check the seller’s product information (update page settings).
• Set the commission percentage.
• Track the seller’s income, total order, total buyers, and latest order.
• Create template-based emails for the marketplace, which will be used according to admin selection.
• View the list of all sellers in the marketplace in one location.

Popular e-commerce extensions for your marketplace on Magento

The biggest benefits of Magento extensions for marketplaces are faster processes and time savings. To get the most out of your work and make it more efficient, we have compiled a list of the most useful utilities.

Store locator

With the store locator, vendors can quickly view their customers’ origins and set a radius to deliver items, while customers can enter their location and check the available sellers within that area.

Buyer-seller communication

With the Buyer Seller Communication function, a buyer can easily communicate with the seller about a particular product, and the seller can respond.

Delivery time slot

The Magento 2 Delivery Time Slot Marketplace Add-On allows sellers to set the delivery days and timeslots for their orders. As a result, customers can choose their preferred delivery day and time for their order during checkout.

Seller membership

The admin can restrict sellers from uploading products to their account. Sellers can add products after paying an amount that the admin sets, making them a partner. The Marketplace Membership for Magento 2 module also works as a subscription module, with sellers/vendors paying an upfront fee to add products.

Popular e-commerce extensions for your marketplace on Shopware

What are the best extensions for the Shopware cosmetics marketplace in terms of needs? Let’s take a quick look.

Store locator

The store locator connects customers with local stores and transforms their shopping experiences. Sellers can quickly find customer origins and set a radius to deliver items, while customers can enter their location and check for available sellers in that area.

Bulk product upload

This module allows the admin and seller to upload products in bulk. The seller can upload bulk products using CSV/XLS and XML files, and the admin can upload bulk products into the seller’s store.

How Much Does It Cost to Develop a Cosmetics Marketplace on Magento or Shopware?

It can be quite difficult to calculate the exact cost of developing a multi-vendor e-commerce marketplace. One price will not be applicable to all types of multi-vendor marketplaces; it depends on your demands and requirements.

However, to give you some numbers and a better understanding of the process, the price for a marketplace solution on Magento or Shopware starts at $20,000 and increases if you need additional functionality for your business model. The development process has many layers, and various factors influence the cost.

Implementing a marketplace is similar to enforcing any other web system. The main difference is in the number of development hours and the development approach. Building an e-commerce marketplace is a bit complicated, as several things need to be considered. Here is a general idea of what we can do for you:

• System requirement specification
• User Interface (UI) and UX design (the look, feel, and behavior of the marketplace)
• Responsive HTML and CSS (so your marketplace works well on any device)
• Front-end programming (user interactions in the browser)
• Back-end programming (server-side business logic and database architecture)
• Acceptance tests (manual testing)
• Server and hosting setup

Dinarys’ Experience in the Cosmetics E-commerce Industry

We have tremendous experience in e-commerce services. Our main goal is to help our clients develop the right e-commerce strategy and take advantage of their opportunities. We specialize in developing online e-commerce stores on the Magento and Shopware platforms.

We want to introduce you to Goddess, a multi-brand makeup e-commerce store, to confirm everything explained above.

Numerous brands offer their products on this site. After staying on the market for quite some time, they decided to redesign the site to improve performance and expand user functionality. The Dinarys team completely redesigned the store based on the standard Magento Luma 2 theme.

The result of our work is a fully customizable Magento 2 online cosmetics store with custom one-page checkout, new user and admin capabilities, new localization, and improved overall performance. This ultimately increased website traffic and the client’s recurring profits.

Final Thoughts

In this article, we talked about selling cosmetics over the Internet correctly and effectively. However, there are many cases in which a small online store has grown into a sizable and popular marketplace. Has this been the case for you? It can be if you set goals and achieve them.

Our professional team is ready to help succeed. Dinarys specializes in creating online stores on the Magento and Shopware platforms in many niches of commercial business. Contact us for a competitive, highly customizable, and scalable solution that fully meets all UI and UX requirements.