Secondhand cosmetics: Capgemini points to the potential of this $7bn market

Alissa Demorest

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Secondhand cosmetics: Capgemini points to the potential of this $7bn market

Emmanuelle Bonardi

Beauty veteran Emmanuelle Bonardi joined Capgemini Engineering earlier this year as Industry & CPRD Presales Director. Part of her remit is to detect emerging trends in the beauty space. The rise of secondhand cosmetics, namely fragrance and makeup, is one such issue. In a preview to her white paper on secondhand cosmetics to be published exclusively on Formes de Luxe in the coming weeks, Bonardi spoke to us of this burgeoning marketplace said to be worth $7bn.

What are your priorities at Capgemini Engineering?

Capgemini Engineering is one of the three divisions in the consulting group and accounts for about 29% of turnover with a team of 65,000; 200 of these are researchers. I am in charge of developing the Consumer Product Retail & Distribution part of the business with a focus on beauty, which is new to Engineering. Capgemini Invent works extensively with luxury brands, but more in terms of strategy reflection and oriented computer and software solutions. Here we are targeting operations: supply chain, innovation, new product development… And this is my background, having worked in this area for nearly 30 years.

My job is also to pick up on emerging trends in the beauty space and see where Capgemini can bring solutions. The secondhand cosmetics market is one example of an issue that is gaining importance, but where beauty brands are still in the nascent stages of developing targeted strategies. We’re talking a global market of $7bn that is slipping through their hands and into those of consumer-to-consumer (C2C) platforms. Luxury brands have taken charge of the secondhand fashion market, which represented sales of $16.6bn in Europe alone in 2022 and has projected annual growth of more than 8% in the years to come. But as of today the secondhand beauty realm is out of their reach.

Do luxury beauty brands really want to sell cosmetics that have been opened and used on their own platforms? What impact will that have on their reputation?

Let’s look at what happened in secondhand fashion: luxury brands had to reclaim the market because their relationship with their client has shifted. It’s no longer a short-term relationship, but one that covers the entire lifecycle of the product and even through the stages of repair and transmission. These brands have moved beyond the purely commercial transaction of sale and purchase.

Fashion brands now see the value of this approach as it builds brand image and creates a stronger link with the consumer, rather than letting the market get away from them and be piloted entirely by the consumer. This is happening in cosmetics as brands realize they are unable to control their products and the way they relate to their consumer. Not to mention the loss of income, notoriety, data and consumer knowledge that goes along with it! Not controlling their product also can lead to a rise of counterfeits sold on C2C platforms, which is a serious risk in the beauty space.

What products make up the bulk of the secondhand cosmetics market?

As to categories, fragrance is a major draw, but we are seeing a huge demand when it comes to make-up. Skincare is limited when it is sold in jars, due to contamination, but airless products can be sold secondhand because of their protective packaging.

Most products are unopened and unsold items, but we’re also seeing more and more opened products, even cases where up to 70% has been used. Glambot is one website that recoups these products, sanitizes them and then resells them.

Demand is growing for several reasons: first because of cost, in the context of rising inflation, but also the younger generation's desire to consume more responsibly and to avoid waste. There is a strong sense of community and pride for consumer shopping on these platforms.

Which beauty brands are the most sought-after when it comes to secondhand cosmetics?

Dior tops the ranking, and Chanel and MAC are also in the top five brands sold on C2C platforms.

How do you see Capgemini addressing this market?

Our mission is to raise these types of emerging issues with brands and help them devise a strategy and a sales platform either in B2B or B2C. How can this sales channel address their excess and obsolete stock, especially given that unsold stock cannot be destroyed as it once was due to new regulations (in Europe at least). In a nutshell, our role is to help brands connect the dots in what can be a complex issue.

You also create digital passports for beauty products, which gives added value in the context of secondhand goods.

Yes, Capgemini has specific expertise in this area. A digital passport stipulates when and where the product was manufactured (so relating information on a formula’s expiration date), its environmental impact, details on the packaging and ingredients, who purchased it, where and at what price. It’s a way to reassure the consumer on the expiry date, how much product has been used… On certain sales platforms today, the consumer can choose if the product has been opened, if it’s been used and even what percentage has been used.

There is a huge marketing opportunity here.

Absolutely, it’s a way to reinforce the relationship between brand and consumer in the long term, while keeping control of the message. They are better off controlling this process. The real question is: are brands willing to claim this market and if so, what tools will they opt for and what approach will they take to marketing and sales, especially when it comes to price positioning?

Are there already luxury beauty brands embarking on this territory?

I think they are just now discovering the issue and coming to terms with the magnitude of the phenomenon and how they could track the value of their products on the secondhand market. We mustn’t forget that brands already sell product on these markets, be it through in-house sales for employees or private sales, for example.

Regulations in Europe now control end-of-life of these products?

Yes, brands can no longer destroy stock of unsold goods. Brands need to anticipate where their excess and obsolete stock will go by optimizing sales forecasts as well as adjusting production in line with the products’ performance on the market. We offer tools that allow a precise and agile forecast of a product’s LCA from launch. The idea is to aggregate data to predict demand to avoid creating excess and obsolete products.

Creating digital twins of products, services, stock and even manufacturing sites can gauge response if consumer demand explodes or plummets. It allows the brand to be ready for what is to come, no matter what the outcome. When brands have unsold merchandise on their hands, the idea is to pilot the warehouses proactively, by seeing where they can push the stock in traditional markets (via trade, promotional actions on a local level) or push through discount or secondhand outlets.

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