September 2023

Beauty Industry Reigns Supreme

The E-commerce of Beauty

The beauty market in Europe is currently estimated at a little over $138bn and more than a quarter of total revenue worldwide in sales of beauty products is expected to come through online sales in 2023. The rise of indie brands, seen as more personal and able to focus on smaller market segments, is noticeable as they make use of the affordability of delivery and the subscription model, which has boomed in recent years.

The Beauty Industry: Stats & Market Research

Amazon is, expectedly, the most popular online store when it comes to beauty product online shopping, but popular brands such as Ulta, Sephora, Nordstrom, and Kylie Cosmetics are not lagging far behind in the beauty e-commerce arena.

Top 5 Beauty E-commerce Trends

1. Social is the Way to Go

Social media, in general, has affected all facets of both our daily lives and the business world, with the beauty industry thriving in its visually-oriented landscape. 

The introduction of shoppable content online allows for beauty products to be purchased directly from the same social media or live stream page where they were discovered, creating a seamless experience for the consumer. 

However, it’s important to note that consumers have to trust the brand, which means the reliability of both the product and the retailer. Positive impressions and word-of-mouth are key. If the consumers are happy with a beauty product, they will recommend it themselves, both offline and online – not everyone may have the reach of an influencer, but positive reviews and ratings are sure to increase conversion.

Social widens the scope: even almost-forgotten brands can make a comeback if featured on anything from Instagram to TikTok. There is room there for new angles, as shown by TikTok which has been entering partnerships as a platform with various brands, such as the recent one with L’Oreal where the brand’s curated gift boxes can be purchased directly from the app’s marketplace.

2. Augmented Reality (AR)

A significant challenge the beauty industry has had to overcome was the fact that consumers prefer to try beauty products – something that is very easy to do in a brick-and-mortar store, but not so much when shopping online. In order to overcome this obstacle, online retailers were among the first to adopt augmented reality technology, using it to assist their customers with making purchases. 

The technology is very simple to use: a shopper need only upload their photo – and sometimes not even that because many AR tools can work directly with a smartphone’s camera – and apply various filters that mimic the way a desired product will look when used.

AR has so far had a significant impact on customer satisfaction and retention, and has decreased the returns of products consumers would have previously potentially found unsatisfying.

3. Influencers Drive It Home

Influencers come hand in hand with beauty brands, allowing them to connect to large audiences on anything from social media apps to live streaming platforms. They can provide that competitive edge to a brand when it comes to reaching a certain target population, be it a certain age group or some other demographic, and many brand partnerships have led to significant increases in brand awareness across various social platforms.

After all, 65% of consumers have purchased a beauty product, be it online or in a brick-and-mortar store, after seeing it on their social media feeds.

Influencers can provide that competitive edge to a brand when it comes to reaching a certain target population.

Related Article
Nº01 How is AI Transforming E-commerce?

August 2023

Industry News
How is AI Transforming E-commerce?

Artificial intelligence is slowly but surely entering various areas of our daily lives, and online shopping is no exception. When it comes to e-commerce, AI has been changing the game for a while now.

4. Data-driven in Beauty

The digital world is prone to changes on an almost daily basis, making up-to-date data crucial for business and planning. Benchmarking has thus become vital in digital marketing, especially with regard to social media. In short, keeping track of which sales and marketing channel and tactic is used by which of the most successful brands can help an e-commerce business refine and adapt its own strategy.

Beauty is a trend-driven industry, therefore employing data to identify and track lucrative patterns can provide a business with a much-needed competitive edge and help them stay ahead of the curve.

Data can also provide insight into any potential flaws and gaps in a marketing strategy, pulling the focus from wins to areas where improvements are necessary.

Also, data can avoid potential understocking, which can be the ruin of an online retailer, especially when competitors may have the same or a very similar product in plentiful stock.

5. Subscribe and Thrive

Subscription models have been on the rise lately. Business savvy e-commerce ventures have been implementing them to great effect. The beauty industry has found great success with adopting the subscription box model. 

These boxes provide great added value to customers, due to the “personal” touch they provide, and they offer consumers an opportunity to sample new products and brands without committing to more expensive, full-sized versions.

Finally, beauty subscription boxes can also increase a brand’s visibility on social media when subscribers share the contents of the newest box.