.png)
The beauty industry has been rapidly evolving, especially since more and more brands are leaning toward e-commerce for higher sales, visibility, and engagement. Turning to e-commerce for beauty and skincare products opens up avenues for startups to create unparalleled customer experiences through fast order placement and deliveries. Don’t know what we’re talking about? Some of the e-commerce trends, strategies, and examples in this piece might help.
If you’re planning to run a beauty e-commerce store and feel like you need expert advice and help, we’ve got your back. At TooMrkt, we cover all aspects of planning, launching, and efficiently running an e-commerce store. Book a call with our experts today to find out if we’d be a good fit.
Recent Worldwide Stats
According to recent stats, both the US and China are racing to secure the first position as the leading online beauty and personal care market. However, with $11 billion in beauty and $10 billion in personal care e-commerce segments, the US stands at the top in terms of revenue. The country is also the biggest player in the online beauty and cosmetics industry in terms of web traffic.
In contrast, China, with the second-most revenue in both of these market segments, is experiencing the fastest growth in terms of web traffic. According to a 2023 survey, the estimated worth of the global market was $119 billion. This number is expected to reach a whopping $184 billion by 2028.
Here are some additional useful stats:
- Shoppers prefer purchasing their beauty products via leading e-commerce marketplaces, such as Mercado Libre, Tmall, and Amazon.
- Alibaba was the top e-tailer in this sector in 2022 with approximately $60 billion in sales.
- In terms of exclusive retailers, Sephora was at the top of the global list of digital beauty stores with $3 billion in net online sales.
- One of the biggest e-commerce trends for cosmetic and makeup sales has been the use of social commerce.
- Cosmetics products in particular are the highest revenue-generating e-commerce beauty products, followed by other beauty care items and fragrances.
Top 6 E-Commerce Trends To Know for Your Startup
As mentioned, e-commerce is one of the biggest drivers for beauty sales globally. Digitally-native brands are now also shifting their focus on growing their social media presence and utilising multiple digital shopping channels. Let’s dive into some key e-commerce trends that are offering many brands and e-commerce experts a competitive edge.
1. AI for Product Discovery
As hyper-personalisation is becoming more and more crucial for beauty brands, many brands are integrating AI to utilise this strategy and enhance their buyer’s online shopping experience. For example, Dcypher Cosmetics is making cosmetic products that match their consumers’ skin tones with the help of AI.
YSL is another brand to have successfully integrated AI into one of its products, the Rouge Sur Mesure. This device is an at-home AI-powered system that comes with refillable cartridges and lets users create thousands of lipstick shades.
2. Inclusion & Diversity
Diversity has been a long-standing concern for the beauty and personal care space. From products that only suit specific skin shades to advertising that promotes unrealistic beauty standards, many issues have been brought forward by consumers who have made it clear that such exclusivity or bias is no longer acceptable.
A brand’s value is as important as the products it’s selling. In fact, according to a 2020 Business of Fashion and McKinsey & Company study, about two-thirds of your consumers in this industry are belief-driven buyers. Moreover, approximately 63% of American beauty and health consumers say they prefer brands that feature inclusion and diversity in their advertising.
Owing to such e-commerce trends, Sephora made a “15% pledge” in 2020, which stated they would dedicate 15% of shelf space to black-owned cosmetic companies in an attempt to promote diverse offerings in the beauty space.
3. Brand & Influencer Partnerships
One of the biggest beauty brand tools remains social media marketing, which enables them to connect with their target audience on a much more personal level. This industry sees one of the most intense competitions for user attention. Consequently, many brands are now turning to brand partnerships and micro-influencers to create multi-platform brand awareness.
In addition to e-commerce trends, they’re also turning to entertainment and pop culture to find relevance with their new consumer segments. For example, Besame Cosmetics recently partnered with Disney to recreate the signature red lipstick used by Mary Poppins. The lipstick became a winner among all beauty products–especially amongst fans of both the movies and the brand.
If you’re looking to increase your makeup and cosmetic sales on e-commerce platforms using this strategy, consider using the platform’s plugins or native influencer apps. These inbuilt features help brands find influencers, connect product catalogues, and launch influencer campaigns on various social media platforms.
For example, if you’re using Shopify to build your e-commerce beauty brand, you can use DojoMojo for brand partnerships and Caro for influencer campaigns.
4. Subscription-Based Models
We can’t talk about e-commerce trends without bringing up the subscription model. While many online retail brands have already incorporated this into their business, beauty and skincare brands are also seeing an increase in their average order value (AOV) after adopting subscription-based models.
Consumers appreciate subscription boxes because they offer a wider product selection and make the product discovery experience far better and easier. With more and more beauty brands applying this approach, this industry is seeing the strongest growth in terms of AOV.
According to a 2020 survey, beauty subscription brands saw a 20% increase in their AOV despite the COVID-19 pandemic. BirchBox is one such brand that uses subscription and membership models, offering a wide variety of personal care products at a considerably low per-month cost.
This brand was one of the first few to offer its consumers a winning combination of personalisation and convenience. For a relatively low cost, each subscriber receives 5 hand-picked product samples after they sign up and participate in the available beauty quiz.
Such models address one of the biggest pain points and allow consumers to test new lines of brands and products without committing to the expensive, full-sized ones that may or may not work.
5. Hyper Personalisation
While personalisation initially began with simple elements, such as addressing customers by their name in emails or offering them an exclusive discount on their birthdays, it has since spanned into something a lot bigger. Now commonly referred to as hyper-personalisation, it’s a phenomenon that refers to delivering the right messaging at the right time.
This strategy helps increase conversion rates and engagement with its ability to identify a customer’s stage in the buying cycle and personalise each touchpoint. For example, ILIA Beauty, a company selling beauty and skincare products, uses email automation to send their previous customers a reminder to replace products after specific intervals.
Such emails, according to Omisend, had an open rate of 34.26%, which is double compared to the pre-personalisation email campaigns of 2019, which received an open rate of just 18.86%. This proves that online shoppers are showing more interest in personalised experiences that cater to their pain points and needs.
Creating customer-centric shopping experiences is crucial for increasing skincare and makeup sales. Therefore, if you’re looking for ways to enhance brand loyalty, consider hyper-personalisation, a relatively easier and cost-effective solution.
6. AR & VR Incorporation
Brick-and-mortar stores allow customers to sample hair and skincare products before a purchase. The shift to online retail made the process more challenging for buyers because of the absence of this option. So, to address this pain point, the beauty industry became one of the first industries to adopt VR and AR technologies.
This allowed brands to enable their customers to “try” products during their shopping journeys. If you’ve shopped at Sephora, you might be aware of its Virtual Artist app. This app uses special filters mimicking the wearing of different products to enable the brand’s shoppers to try out the available products before buying them.
Adding such features to your store or app will better equip your customers to evaluate where a certain product is right for them. Consequently, this will lower return rates, and the costs of logistics associated with returns and increase shopper engagement.
According to one study evaluating behaviours on the YouCam Makeup app, shoppers were not only 1.6 times more likely to make a purchase but also spent 2.7 times more than they would without this app feature.
VR and AR are helping bridge the experience gap between in-store and online shopping for customers. With approximately 61% of online consumers preferring retailers with AR technology, there’s a lot of room for this space to grow and flourish.
Looking for capital investors for your e-commerce startup? This list of the best available options will help!
4 Popular DTC Brands To Follow
With a gazillion makeup brands doing everything in their power to create memorable experiences for their online customers to increase brand visibility, engagement, and conversions. You can’t keep up with all of them to know which e-commerce trends are providing positive results. We’ve shortlisted 4 of the most popular brands that you must keep an eye on for ideas and inspiration.
1. Glossier
Glossier exploited a massive gap in the market to become a cult favourite among millennial beauty consumers by producing minimalist beauty products that don’t cover up but rather enhance your features.
Instead of placing itself as a cosmetics vendor, the brand has positioned itself as a lifestyle offering through its compelling storytelling. If you review their Instagram feed, you’ll find a mix of inspirational quotes, UGC, and glimpses of customers enjoying their immersive stores.
2. Drunk Elephant
Drunk Elephant is a brand that sells beauty and skincare products online. It is one of the biggest success stories in this highly saturated industry. The primary reason for this is that the brand clearly defines what “clean” beauty means in practice, which is something many previous brands have failed to do.
Consumers in this industry are often sceptical of brands’ clean beauty movements. Drunk Elephant mitigated this issue by banning numerous ingredients, which it refers to as the “suspicious 6” from its product range. As a result of this transparency, the brand enjoys unmatched brand trust and loyalty.
3. ColorPop Cosmetics
ColorPop Cosmetics is one of the most popular beauty brands on social media. According to a survey by Vogue Business, this brand received 18+ million comments and likes on Instagram in a single month of October 2019. This number is higher than the number of Instagram likes and comments for KKW Beauty and Kylie Cosmetics combined.
The secret to this success lies behind the brand’s efficient and effective social media engagement plan. The plan entails using online feedback to inform its consumers of the upcoming product collections. The brand is also able to stay ahead of its competition in terms of e-commerce trends because of its quick turnaround time of 5 days from concept to production.
4. Kylie Cosmetics
Before launching her brand, Kylie Jenner had already amassed a significant following on her social media platforms as a member of the Kardashian family. She used daily life updates and beauty routines to prepare her audience and set the stage to launch her own beauty products without the need for any partnership with a legacy beauty retailer.
Her brand, Kylie Cosmetics, effectively used influencer marketing to build trust and social proof, harnessing this strategy’s power and proving its true potential. That is why, even as a novice brand in a highly saturated market, her makeup brand was able to compete with the well-established ones right from the get-go.
5 E-Commerce Strategies That Promise Growth
Now that we know the popular e-commerce trends and brands, you must be wondering what they did to reach this height of success and turn into trendsetters rather than mere followers. Here are the top 5 e-commerce strategies that promise long-term growth.
1. Virtual Stores & VR
Beauty companies are utilising try-on apps, as previously mentioned, as well as exploring VR technologies to build digitally-native, unique shopping spaces for consumers. One feature that has created a big uptick in popularity during the pandemic is virtual shopping.
Virtual shopping entails 3D-rendered store environments where online shoppers are able to “walk” around. The global spending on VR and AR technology was valued at $18.8 billion in 2020, a 78.5% increase from the previous year.
Virtual stores have evolved spaces into something you could previously only experience in a brick-and-mortar store and turned e-commerce from static product catalogues into dynamic ones. This makes VR a significant competitive advantage for online beauty products and brands.
Launched during the 2021 holiday season, the Virtual Beauty Gifting Wonderland is a wonderful example of an efficient virtual store. It provides customers the ability to shop with their loved ones through video chat, access exclusive products, and even avail virtual beauty consultations.
Haven’t built your e-commerce website yet? Here’s a list of all the best platforms to compare!
2. YouTube Channel
Many customers want to see their favourite beauty products in action and no other platform is better able to capture their attention than YouTube. According to Google, future purchase ideas and inspiration are driven by online videos for nearly two-thirds of shoppers.
Videos hold a lot of power within the beauty industry. If you want to deliver a higher level of value to your customers, consider investing in content marketing strategies to curate content teaching different techniques and products, such as masterclasses and tutorials.
Furthermore, you can use this content type for social listening and evaluate your customer’s shopping experiences. Reading and responding to your online audience’s comments will not only give you the ability to answer queries but also make recommendations and get inspiration for new product lines.
One prime example of this is MAC Cosmetics’ Holiday How-To series. It teaches the audience how to use MAC beauty products to achieve festive makeup looks via easy-to-follow tutorials.
3. Influencer Marketing
Beauty brands and influencers have built a strong interdependent relationship with time. Gifted products and sponsorships provide the basis for tutorials, reviews, and other content pieces that can significantly impact engagement and online sales.
It is estimated that ad spending in the influencer ad market will reach $35.1 billion in 2024, with an annual growth of 10.36%, resulting in $52 billion in estimated market volume by 2028. In 2022, it was reported that brands like Estee Lauder were spending a whopping 75% of their budget on beauty influencers. With numbers like these, there’s no reason to doubt the results this specific type of marketing is capable of producing.
According to the British Beauty Council, beauty brands that invest in influencer marketing enjoy an ROI of $11.45 for every dollar spent. Stats like these have compelled brands like Mielle Organics to develop micro-influencer strategies.
The brand has effectively partnered with influencers that have a small but highly engaged audience. Their partnerships include natural hair enthusiast Tasha Jeana, who promotes the brand’s Essentials Collection.
4. Search Engine Optimisation (SEO)
With thousands of individual product pages on their e-commerce website, beauty brands find SEO to be one of the most important elements of digital marketing. A robust SEO strategy has become a must for brands looking to enhance their discovery opportunities. This is partly due to the fact that about 40% of online shoppers in the post-pandemic era are more willing than before to try out new beauty products and brands.
Optimising your images and descriptions with semantic and long-tail keywords will assist you in dominating high-intent searches. Moreover, creating a strong internal linking strategy and increasing your website’s loading speeds will result in an effective shopping experience for your customers, leading to lower bounce rates and enhanced user experiences.
5. Search Engine Marketing (SEM)
SEM is one of the most important beauty e-commerce strategies that help brands capture high-intent searches and boost brand visibility. In particular, Google Shopping ads get the highest click-through rates in search results, with almost two-thirds of paid clicks.
When it comes to Google Shopping ads, keep in mind that data feed management is one of its most crucial elements. This refers to Google’s use of structured product data to create ads. Moreover, you must also keep your product titles short in characters but rich to prevent truncated results.
Here are a few ways you can structure your product titles:
- Product Type + Product size + Color + Feature + Brand
- Style + Color + Product Type + Brand
- Product Type + Color + Brand
- Brand + Product Type + Product Size (i.e. S, M, or L)
- Brand + Product Type + Color + Material
Wrapping Up
The beauty industry maintains its early-adopter approach to innovations, such as video marketing and virtual reality. Consequently, despite the pandemic and other external factors that have brought a change in consumer spending, the beauty e-commerce industry has continued to experience high, consistent growth.
Online shopping has been completely transformed with a more socially engaged customer journey and the rise of social commerce across several platforms. It has become more immersive and streamlined, offering stronger levels of brand trust and loyalty.
One of the many e-commerce trends that are expected to make waves for a long time is omnichannel marketing, which covers everything from product searches to deliveries.
With the growing DTC beauty industry, you might have plans to leverage an opportunity and make a bang despite the presence of big-name brands in this already saturated market. These trends will only give you an idea of what works. To truly make the best of your investment, we recommend partnering with e-commerce experts who do all the grunt work for you, so you can focus on your business’s core operations. Schedule a call with our experts today to find out more!
.png)
