The Impact Of Social Media On The Cosmetics Industry

Running head: THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 1

The Impact of Social Media on the Cosmetics Industry

Name

Institution

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 2

The Impact of Social Media on the Cosmetics Industry

Chapter 1: Introduction

1.1 Background of the Research

According to Kim & Ko (2012), the relevance of social media in today’s life has

expanded significantly, and its scope has provided innumerable opportunities for business firms

to reach out to more customers. Similarly, the dynamic nature of the fashion industry implies that

the cosmetic sector is one of the key areas where social media has a profound influence on

consumer trends and preferences. Shen & Bissell (2013) stated “Regardless of the social nature

of social media, the dialogue aspect has still not been fully embraced by many

brands/companies.” Based on this understanding, the following paper seeks to explore the

impacts of social media in the cosmetics industry. In particular, the paper will focus on the

specific trends and attributes of social media, which ultimately make it a powerful tool in the

cosmetic industry. In addition, the paper will also highlight some of the factors that influence

consumer decisions when purchasing cosmetics products. To this end, it is expected that the

paper will provide useful insights to different players in the cosmetics industry regarding the

relevance of social media, and how it can be used to influence consumer decisions. The research

findings suggest that social media significantly impacts on consumer perceptions, brand image,

brand loyalty, and overall brand performance.

1.2 Problem Statement

In the recent past, the increasing relevance of social media in day to day life has been

explored from a social context. However, it is becoming increasingly important for business

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 3

organizations and managers to view the social environment from a commercial perspective,

given that social media users are potential consumers. Consequently, the use of social media for

commercial reasons is intended to turn users into customers in the long term (Ioanăs & Stoica,

2014). Additionally, the ease of access provided by the social media makes it a powerful tool to

reach out to a global market. However, it is arguable that the use of social media for commercial

purposes, particularly in marketing, has not been investigated across all the major industries and

sectors. In this view, this paper aims to provide useful insights regarding the use of social media

in the cosmetics industry, given that there is an apparent lack of timely and relevant information

in this sector. Therefore, it is anticipated that the following paper will be useful to marketing

managers, as well as consumers in this industry by providing relevant information on the scope

of interaction through social media.

1.3 Rationale of the Research

The following research is largely motivated by the fact that, while the increasing use of

social media in today’s life and its relevance in marketing cosmetics products is inescapable, the

underlying impacts in this sector have not been fully explored (Ioanăs & Stoica, 2014). As a

result, there is an apparent knowledge gap concerning the specific impacts of social media in the

cosmetic industry, which prompted the need to conduct this research. To a large extent, the

following research will be useful to marketing managers and business organizations in the

cosmetics industry, as well as consumers who rely on social media to make decisions on the best

product to purchase. In addition, the paper will also provide a basis for further research on

various issues that influence consumer decision in the cosmetics industry. The conclusions and

recommendations made in this research will provide useful directions for future studies, in

addition to expanding the body of knowledge regarding the subject.

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 4

1.4 Research Questions

The following research seeks to answer the following questions;

i. What are the specific impacts of social media in the cosmetic industry?

ii. How does a social medium influence consumer decisions in the cosmetic industry?

iii. What are the impacts of social media on brand loyalty?

iv. Do social media influence overall performance in the cosmetic industry?

1.5 Research Objectives

The following research aims to fulfill the following objectives;

i. To understand how the use of social media impacts on the cosmetic industry as a whole.

ii. To outline how the use of social media shapes consumer decision, as well as their buying

preferences.

iii. To understand the impacts of social media exposure on brand image and loyalty both in

the short term and in the long term.

iv. To determine whether or not the social media phenomenon impacts on the overall

performance of firms in the cosmetic industry.

v. To understand the interaction between retailers and consumers in the cosmetic industry

through social media platforms.

1.6 Structure of the Research

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 5

The following research is divided into five chapters. The first chapter provides an

overview of the research background, research questions, research objectives, as well as the

rationale for conducting the investigation. The second chapter is a comprehensive literature

review of past studies on the subject and related content. The literature review is meant to

provide useful insights raised by past studies, which will then be collaborated with the findings

of the present research in order to answer the research questions outlined in chapter one. On the

other hand, the third chapter provides the research methodology adopted to conduct the study.

The methodology outlines how the research questions will be addressed in this study, as well as

how the research objectives will be implemented. The methodology describes the methods used

to conduct the research. The fourth chapter covers data analysis and findings. The analysis

correlates the relevant issues raised in the literature review with the data used in the

methodology. The analysis is used to come up with the research findings, which are expected to

answer the research questions in the study. Finally, the last chapter includes conclusions and

recommendations of the study. To large extent, the conclusions are primarily drawn from the

research findings. The conclusion forms the basis for proposing recommendations, as well as

further directions for future studies.

Chapter 2: Literature Review

The increased use of the internet and advances in technology has significantly

transformed communication and social interactions. Additionally, internet penetration has

enhanced access to information and networking, which has dramatically changed the nature and

scope interactions across different platforms (De Vrieset et al., 2012). More importantly, the

recent development of personal devices that are connected to the internet has accelerated the

emergence of virtual communities that are characterized by shared interests and/or views. To this

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 6

end, it is arguable that these rapid developments have redefined conventional communication

channels, which has in turn transformed how business organizations reach out to their target

customers (Rapp, Beitelspacher, Grewal, & Hughes, 2013). Notably, it is stressed that the

development of social media platforms has significantly changed the scale and scope of

communication among individuals, social groups, as well as between business organizations and

potential customers. More importantly, the uniqueness of social media platforms and its

unrivaled popularity in recent times has revolutionized marketing strategies, including

advertising and promotions.

It is also undeniable that the social media phenomenon has a significant influence on

consumer behavior. In this case, consumers tend to evaluate different products based on the

information gathered to make purchasing decisions. Similarly, the information acquired

influences post-purchase behavior, which may be characterized by dissatisfaction or fulfilled

expectations. In this way, consumers are in apposition to evaluate the product and/or the

company based on the expected value against the actual results (Muchardie, Yudiana, &

Gunawan, 2016). Additionally, social media has enhanced communication between potential

customers and organizations through online engagements and surveys, which, not only increase

interaction but also help organizations to build formidable relations with consumers. Based on

this understanding, it is arguable that social media is an indispensable tool in today’s marketing

environment, and utilizing its potential can have profound impacts on building customer loyalty

and enhance brand image in the long term. “Brands are utilizing various social media platforms

to share exclusive previews and promotions, provide event information, and barter posts in

exchange for samples or product previews” (Suresh, Chitra & Maran, 2016).

2.1 Emergence of Social Media

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 7

According to Cross (2014), social media is defined as a communication channel that is

subject to social control, and one that can be used in different scales and scopes, including text

messages, multimedia messages, as well as video content. From another perspective, social

media can be viewed as a collection of internet based applications that are primarily based on

ideological and technological of the Web 2.0 platform. Consequently, social media encompasses

both social networks and associated web portals (Cross, 2014). With digital technology growing

pattern, most people own one or more digital devices which consumers the opportunities to

browse and see details about their popular products. In the last decade, major retailer’s industry

has witnessed unprecedented growth in online exposure and visibility, which has enabled

development of unique market niches (Wahyono, Khoiruddin & Wijayanto, 2017). While the

cosmetic industry has not been left behind, it is stressed there has been little attention on the

specific impacts of social media in the sector. Over the same period, the sluggish economic

growth has prompted firms to focus on cost effectiveness and operational efficiency, and the

emergence of social media has been adopted as a solution to reduce marketing costs and increase

market share (Mohr, 2013). With reducing cash flows, cost effective opportunities were quickly

adopted, which in turn boosted the relevance of social media in businesses.

Consumer preferences and purchasing behavior have dramatically changed in the last 10

years. A study conducted by McKinsey & Company Retail indicates that customers shopping

habits and decision have taken a different direction. Consumers are no longer standing in front of

stores to window shop as was the case two decades ago. Today, customers use the internet to

obtain almost any information they need on a product, as well as the best promotion available to

them (Rezaeian, 2016). They also use their smartphones to review other features and refer family

and friends instantly, which ultimately influence their shopping decisions via social media. In

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 8

addition, it is also possible to buy an endless list of e-commerce products by simply placing an

order and wait for its delivery (Kristen, 2016). “The emergence of social media (e.g., Facebook,

Twitter) has boosted interest in word of mouth and viral marketing among luxury brands,”

(Mohr, 2013). As Mackenzie (2013) points out, big changes are inevitable and that retailers must

act now to win in the long term. To a large extent, social media platforms have provided many

competitive advantages such as agility, independence, selectivity, individuality, and interactivity

(Rezaeian, 2016).

2.2. Social Media and E-Commerce in the Cosmetics Industry

E-commerce refers to the use of the internet to make electronic transactions that are

primarily business in nature. The development of e-commerce can be traced from the 1960s in

the US when the electronic data transformation technology was developed. Initially, the

technology was meant to enable communication between government agencies, particularly the

military. In late 1990, the internet was first introduced for public use, which in turn

revolutionized personal communication. The prominence of electronic communication was

further developed to facilitate financial transactions to be conducted through the internet. Today,

e-commerce is part and parcel of the business environment across all sectors and industries.

Indeed, the 500 most successful firms report that over 35% of their transactions with consumers

are conducted over the internet (Cross, 2014). To this end, the trends in the use of social media in

the cosmetic industry can be traced from the beauty section that provides a variety of products on

the market.

To begin with, China has witnessed a steady growth in selling personal care products that

were purchased over the internet. In this case, the Chinese market recorded an average of six

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 9

times increase in products purchased online, which represents about 15 percent increase. Beauty

products have sold very well online in China, with an average of approximately 10,000

consumers, which accounts for about 45% of consumers who prefer to purchase luxury goods

over the internet (Deng, 2016). However, another study suggested that a majority of Chinese

consumers are primarily concerned with the quality of the products over prices, and only about

38 percent of them were more concerned with the prices of the products. Notably, social media

affect the performance of retail shops in the Chinese market, as suggested by trends in leading

retailers, such as Alibaba, Tmall, and JD.com. A study concluded by Forrester Research

classified Chinese consumers as “hyper social,” based on results that indicated that 79 percent of

users log onto Weibo, the Chinese version of Twitter, at least five times per week to track their

online activities and preferred products(Deng, 2016).

Some of the most successful firms in the cosmetic industry that have taken advantage of

the e-commerce include Estee Lauder, Clinique, and L’Oréal. Estee Lauder sold about $1 billion

in goods in the online market, while L’Oréal is currently expanding its online market in the

Chinese market. Industry reports indicate that the Chinese market saw its online revenues grow

from 4.6%of all transactions to 14.96 percent, which is equivalent to $2.29 billion yuan. Another

American company, Maybelline which recently ventured into the online market reported that it

sold a record100, 000 lipsticks in 24 hours. However, according to Ioanăs and Stoica (2014)

“previous research has indicated that even a small amount of negative information from a few

postings can have substantial impacts on consumer attitudes”. The unprecedented growth

witnessed in this market is associated with the fact that social media provides a cost effective

platform to reach out to a larger market.

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 10

To a large extent, Facebook is the most preferred social platform that is used by

companies to promote their brands. Recent research indicates that approximately 80 percent of

Fortune’s 500 firms have an active Facebook account that is dedicated to engaging current and

potential consumers (Suresh, Chitra & Maran, 2016). In these accounts, social groups create

substantial amounts of brand related content such as video, articles, and photos, etc. The websites

are designed to ensure interactions with both current and potential customers through posts,

follows, subscriptions. Several firms have found that the consumers who engage them in social

media tend to buy their brands in the long term. For instance, compared with the general

population, people who liked Starbucks’s Facebook page or who had a Facebook friend who

liked the page spent 8% more and transacted 11% more frequently over the course of a month on

the company’s products (Goyal, 2013).

2.3. Conclusion

It is apparent that social media influence consumer behavior. In this case, it is important

to determine how the digital user can engage with mediated performing related the emphasizing

the customer relationship between the sender and receiver intensify its behavior constantly. As a

customer’s behavior changes in favor of a given product, it is agreeable that it tends to add value

to the brand, which is later confirmed when a customer buys the product. Arguably, the more

people follow a given brand online, the more likely that they will buy it in the long term, and/or

recommend it to others. In this way, brand loyalty is cultivated as a customer becomes the brand

ambassadors who market it to others.

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 11

Chapter 3: Methodology

3.0. Introduction

The current research aims at compiling information and data to assist in determining the

impact and the role that social media on the cosmetics industry in influencing consumer behavior

and consumer. The realization of the objective is dependent on the effectiveness of the

methodology adopted (Creswell, 2014). This chapter describes the methodology adopted in

which components including research design, target population and sampling, data collection and

ethical considerations.

3.2. The Research Design

The research design concerns the nature of the data collected in a study. The design can

be primary or secondary on one hand, and qualitative or quantitative on the other hand. Primary

study involves the collection of data and information from the informatics in regard to the

research problem. On the other hand, secondary study depends on literary materials compiled by

other people in the past. The current study adopts a primary design in which data is collected

through the survey. Primary method is preferred because it assists in the collection of the most

contemporary information particularly for a topic that is dynamic in nature. Nevertheless, it is

preferred when there are necessary resources and time to engage the informatics.

Irrespective of whether a primary or secondary research is adopted, the nature of the data

can be quantitative or qualitative. Qualitative research involves the data that is theoretic in

nature. The method is preferred because it bring on board a range of perspectives including

personal views, ideas and personal experience (Creswell, 2014). Quantitative study constitute of

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 12

numerical data that can be statistically be analyzed. The current study will involve both the

qualitative and quantitative methods through the literature review and the data from the

questionnaire. The combination of the two methods assists in triangulation of data.

3.3. Target Population and Sampling

The survey can involve a large number of individuals who can be informatics. Due to the

time and resource constraint, the research target 30 college students. It therefore implies that the

participants involved must be selected effectively to ensure that the best informatics is involved.

In this case, a multilevel sampling approach is adopted. The first stage is the purposeful selection

in which the participants are selected from among the college students who are social media

users (Creswell, 2014). It implies that an individual not using the social media platforms such as

Twitter, Facebook and YouTube are not involved. This is because of the fact that a none-user to

the social media cannot have been influenced by the platforms in making their purchase decision

making. In the second stage, the participants are selected randomly as long as they volunteer to

provide the required information.

3.4. Data Collection and Instruments

Data collection is an important process in a study; it should be well organized to bring on

board relevant data to address the topic. The process starts with the preparation. In this case, the

questionnaire questions involved in the survey is formulated and subjected to peer review to

ensure that the questions incorporated are relevant. In this case, the questionnaire will have ten

questions in which the respondents will be guided on how to respond. The second step is the

posting the Monkey Survey to the target participants informing them of the purpose of the study

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 13

and requesting them for the assistance. In this case, the respondents will be given two weeks to

respondent. Lastly, each of the informatics will be thanked for their time and information.

The research process will be facilitated by the use of instruments. The first instrument is

the research schedule; it is a list of activities and the timeline upon which they are to be

accomplished. The second instrument is the personal computer (PC) and the internet connection

to assist in posting the monkey survey and compiling the results. The PC is also important in the

search for secondary sources in the literature review and the analysis of the data.

3.5. Ethical Considerations

A researcher is required to observe ethical consideration ensure that the research findings

are acceptable by uphold human dignity and fairness. Failure to observe the ethical concerns can

reduce the value of a research. In the current research, three aspects will be strictly observed.

First, the respondents involved have been allowed to be part of the study voluntarily. As stated in

the data collection sections, each of the participants will be informed of the purpose of the study

to ensure that they make informed decision (Creswell, 2014). Secondly, their privacy and

confidentiality will be observed. In fact, the participants will not be identified by the names or

address. Lastly, it is evident that literature compiled by other parties has been used in the current

study. The sources from which such information is obtained are acknowledged through the

referencing and citation at the corresponding sections.

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 14

Chapter 4: Results Analysis

4.1. Introduction

The result from the survey provides the data that need to be analyzed into organized

information from which a conclusion can be addressed. The first three questions intended to find

the connectivity of the respondents to the social media platforms. Question 1 intended to uncover

whether the respondents follow the social media pages by the beauty brands. 87% of the

respondents stated that they are followers of such pages (see chart 1 below). In addition, 25, 18,

15 and 10 respondents follow their favorite beauty brands on Facebook, Twitter, YouTube and

Instagram respectively (see chart 2 below). Interestingly, only 17% of the respondents speed less

than 5 hours a week on social media, while as 33% spent between 6 to 10 hours; 33% between

10 to 20 hours and 17 spend more than 20 hours on the platforms per hours (see chart 3 below).

The implications of these findings are that a marketing message on beauty products can reach out

to a large number of target customers.

Chart 1: the respondents following beauty brands on social media

Chart 2: the social media platform used in following the beauty brands

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 15

Chart 3: the hours spent by respondents on social media

The second set of questions including question 4, 5 and 6 intended to find out whether the

respondents consider social media to be a source of information during a purchasing process.

The 4

question intended to find whether the respondents use the social media to enquire about

the beauty products. In this case, 60% started to have made enquires, while as 40% had not used

the platforms for the same purpose (see chart 4 below). Question 5 requested the respondents to

state whether they consider the social media platforms as a source of reliable information in a

buying process for the beauty products. About 67% of the respondents said that they consider

social media to be critical source of information (see chart 5 below). The percentage implies that

marketing information about the products posted on the platforms is considered to be importation

by a large number. The primary source of marketing information should be the marketing

entities. It is important for the beauty products to identify the platforms upon which the target

market can be reached. In this case, it is clear that both the existing and potential customers

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 16

consider social media to be the source of required information. Question 6 on the other hand

intended to find out whether beauty products’ marketers have taken the advantage of the

platforms to interact with the customers and post marketing information. In this case, 60% of the

respondents said to have witnessed such an interaction with the marketers through the social

media sites (see chart 6 below). Apart from the posting the marketing messages/information, the

interaction gives an opportunity for the customers to make their inquiries while as their concerns

or opinions are put into consideration.

Chart 4: The use of Social Media for consumers’ enquiries

Chart 5: Social media platforms considered reliable source of consumer information

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 17

Chart 6: interaction with the customers by the beauty products’ marketing companies

The other set of questions including 7, 8 and 9 intended to find out the online platform

users who are customers influence each other or the get influenced by tutorial videos. Question

7 inquired whether customers who with preferred cosmetic products encourage others to

purchase and use them. The respondents in this case would reveal whether the electronic word of

mouth play a role in beauty product marketing. In this case, half of the respondents said to have

in one way or the other encouraged other customers with the other half having not done so.

Question 8 was concerned on whether the respondents put into consideration the opinion and

comments in regard to the cosmetics products before making the purchasing decision. A high

percentage in support of the statement would imply that a positive comment can lead to

relatively high demand, while as negative opinion would lead into decline or slow growth in

demand. 83% of the respondents said to have considered the comments about the other

consumers in making their buying decision (see chart 8 below). It is therefore clear that the

perception about a beauty can be influenced by what is been said about it on social media. In

regard to question 9, it was envisioned to find out whether video posts either demonstrating the

use of a cosmetic product or its impact can positively influence the consumer decision. In this

case, 67% consider tutorial videos to be highly influential in making their buying decision (see

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 18

chart 9 below). The videos are likely to be more influential than text messages due to the audio-

visual features incorporated.

Lastly, question 10 was posed with the vision of determining whether the respondents

support or think that social media marketing is an effective approach for cosmetic and beauty

companies. In this regard, 90 percent of the respondents supporting the use of social media

marketing strategy in this case affirm the role that the platforms can play in marketing. Firms

marketing the cosmetic and beauty products should therefore use the platforms to reach out to

the target consumers.

5. Discussion and Conclusion

The current research intended to find out the impact of social media in cosmetics

industry. From the research findings, it is evident that platforms such as Twitter, Facebook and

Instagram among others are highly used in various aspects making them influential in marketing

tools. According to Shen & Bissell (2013), about 30% of consumers in this industry admit that

their purchasing buying decisions fundamentally based on trends dominating social media

platforms. It infers that the cosmetics marketer not using social media for marketing are likely to

lose about 30% of their market potential. The importance of the new media is affirmed by the

large number of respondents using the platforms in collecting information and making inquiries

during the pre-buying phase in consumer decision making.

From the survey it is clear that online users tend to influence each other through the

electronic word of mouth. It is evident from the research findings that a large number of the

respondents consider the views of others in regard to cosmetic products. Besides, more than half

said to have influenced others by encouraging them to purchase some of their preferred products.

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 19

According to Kamtarin (2012), “Powered by email, weblogs, chat rooms, and discussion boards,

online social communication will help consumers share interests, experiences, and ideas in the

shopping and purchase process.” The point of view has also been affirmed by Erkan and Evans

stating that “if consumers take recommendations from online friends into consideration, it can be

turn into purchase action instantly”.

From the findings, marketers in cosmetic industry should not take the social media

platforms for granted as socialization tools but rather as powerful marketing tools. Sites such as

Facebook, Tweeter, YouTube and Instagram can be used in reaching to a large pool of

customers. Marketers should however use them to interact with the existing and potential

customers (De Vrieset et al., 2012). Since a large number use the sites in search for information

before making the purchasing decision. In fact, with effective market through the social media

can assist in creating the consumer intention to purchase a certain product. Apart from

establishing a social media/digital marketing team, a company should identify some of the loyal

customers who posited positive regards and make them brand ambassadors (Wahyono,

Khoiruddin & Wijayanto, 2017). The positive comments and opinions would be powerful in

influencing the target consumers to purchase their products. In case of negative comments from

either an existing or potential customers should be addressed promptly to avoid the effect of

negative e-word of mouth (Evans & Erkan, 2014). It is clear that potential customers seeking

information through the same media and come across the destructive comments would develop

negative perception about the brand and tend to purchase the alternative products.

In summary, the current research realize it primary objective by revealing that the social

media can influence the consumers’ intention to buyer, the purchasing decision and loyalty to a

brand. The research method used was particularly effective in bring on board the relevant and

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 20

quality data and information. In addition, the consideration of other researchers’ point of view in

the literature and the discussion section assist in bring in triangulation of the concept. The

quantitative data analysis assist in strengthening the objectivity of the research finding hence

uplifting the reliability of the results and conclusion drawn. Nevertheless, the future research on

the topic should put into consideration the incorporation of interview in order to attract the views

and opinion of experts in regard to digital marketing.

THE IMPACT OF SOCIAL MEDIA ON THE COSMETICS INDUSTRY 21

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