Supply chains are faced with new challenges: the race to reduce costs has led to them becoming fragmented and more complex, making it very difficult to control their end-to-end operation. At the same time, consumers' expectations are increasingly geared towards quality products with environmental and social impact guarantees. This dual phenomenon creates an opportunity for transparent brands, providing visibility of their production process: to convert and retain consumers tired of opaque brands and ‘marketing without proof’. The cosmetics sector is no exception: it is urgent for brands to gain visibility and provide proof of their commitments and the quality of their products.
66% of consumers say they are ready to pay more for sustainable and transparent brands (Global Corporate Sustainability, Nielsen, 2015)
Cosmetics: is change underway?
Subject to strong growth in internet sales, the cosmetics market is undergoing a change in buying behaviour. The product offer is expanding, in particular with the arrival of many brands that are shaking up traditional ones by advocating strong values, natural products and a real commitment to social and environmental issues (‘slow cosmetics’, for example ). This is good, because as consumers, we always want to know more about where the product comes from, how it was made and what it contains.
However, in 2019, the DGCCRF (the French General Directorate for Fair Trading, Consumer Affairs and Fraud Control) indicated that it had identified 24 per cent of anomalies in a monitoring report of ‘organic’ and ‘natural’ cosmetics. Despite the general goodwill, the fact is that anomalies in the production of cosmetics, the lack of transparency regarding the origin of raw materials, controversial ingredients and the impact on health and the environment are common issues and attest to the great difficulty in controlling the life cycle of products. These tendencies, both organisational and ethical, are disrupting the market and making it more difficult to retain customers: brands therefore need to find new ways to differentiate themselves in order to retain customers seeking real transparency.
Next-generation traceability: the cornerstone of the sector's commitment
In reality, all those involved in the cosmetics sector are faced with the same problems in controlling
their supplies. Today, it is very difficult to have precise visibility on the origin, production and transformation of ingredients, because this involves being able to gather a lot of information that is held by different organisations, in different places of the world and in different forms. One of the answers to this problem lies in the implementation of a new generation of traceability, capable of reconstituting an end-to-end view of the product life cycle, and thus an analysis of this life cycle.
The first step in doing so is to rely on a network to collect and share information between all parties involved in the supply chain. Real-time, secure and transparent, this then needs to make it possible to combine and analyse the data in order to better understand the functioning of the chain end to end.
Blockchain technology provides the necessary foundation to build such a network for sharing end-to-end traceability data:
- As a supply chain is a multi-organisation network, it makes sense for the traceability system to rely on a decentralised database so that it can be deployed rapidly;
- The data is made auditable and tamper-proof and creates accountability. Each participant controls the confidentiality of their data by choosing with whom they share it.
This provides better operational control of the value chain, making it possible not only to better manage production of the item, but also to detect more global issues such as counterfeiting and grey markets / parallel imports (see blog post). It also provides the opportunity to better control scope statements and to establish a solid basis for formulating strong and transparent commitments to the public: ‘marketing by proof’.
JOONE Cosmetics: an example of radical transparency
This is the case, for example, with the traceability initiative implemented by JOONE on more than a hundred references in its cosmetic range. Deployed in six months and relying on the Tilkal platform, JOONE offers DOORZ, a transparency initiative that allows buyers of JOONE products to consult the entire history of the product they have in their hands and to ensure the validity of JOONE’s commitments regarding the quality and origin of the products (see our blog article).
The usefulness of such a traceability system goes beyond its ability to reassure consumers: it is the realisation of a collaborative philosophy that emphasises communication, transparency and honesty in relations with all those involved in the manufacture of a product. Implementing such a system has a virtuous effect on the entire production chain. Removing barriers between those involved, setting up multilateral communication and making data a factor that creates accountability, increases trust between all involved and greatly improve the quality of relations. This is a first step towards a radical change in the way we approach consumption: more responsible, more committed and more aware. Whether we like it or not, this revolution is already underway.