Navigating the New Frontier: Digital Marketing Strategy in the Cosmetics Industry

This chapter explores the transformation of Japan's cosmetics sector amidst the rise of e-commerce, especially in the face of the COVID-19 pandemic. With Japan holding the third-largest cosmetics market globally, the traditionally lauded aspects of functionality, quality, and safety have been challenged by reduced domestic and foreign demand due to pandemic-related restrictions. This has compelled companies to pivot towards e-commerce for customer acquisition and retention. The discussion underscores the strategic shift from merely acquiring new customers to fostering “Genuine Loyalty,” a concept that embodies both attitudinal and behavioral dimensions of consumer loyalty. By dissecting the nuances of loyalty. By examining the nuances of loyalty—cognitive, affective, and conative—the chapter outlines how Japanese cosmetics businesses can adapt to and flourish in the e-commerce era, despite the initial hesitance of consumers who prefer tactile product experiences. Further, the analysis examines the roles of customer loyalty and word-of-mouth (WOM) marketing in driving e-commerce success. It emphasizes the unique characteristics of Japanese consumers, who often desire to test cosmetics firsthand due to product-specific factors like texture and skin compatibility. Despite this, the increased reliance on e-commerce during the pandemic has necessitated strategies to maintain and boost customer loyalty. The narrative explains how leveraging digital platforms for customer engagement and satisfaction, harnessing the power of positive WOM, and utilizing innovative tools like AI for personalized experiences are critical. It also discusses the dual nature of loyalty: attitudinal, reflecting the customer's emotional connection, and behavioral, indicating their purchasing patterns. Through case studies of leading companies, the text provides insights into creating digital platforms that not only facilitate transactions but also cultivate a loyal customer base essential for long-term success in the competitive digital landscape of the cosmetics industry.