The beauty industry continuously sees new innovation with countless new brands and an array of new products and ingredients. Possibly the most interesting change has been how we buy beauty products.
Beauty shopping once meant a trip to the beauty floor at a department store to browse the counters and trial products. As online shopping provides a simpler and more convenient alternative to a traditional shopping trip, it seems the beauty industry would follow suit. However, unlike many other types of retail, online purchasing of beauty products poses new challenges. It’s difficult to tell if a product works for you without trying it yourself first and that’s in-store-shopping’s big advantage.
As physical retailers closed and reopened (and closed again) multiple times over the past year, the pressure to adapt the online shopping experience was on. Success for many beauty brands is stemming from ecommerce, with online sales predicted to account for over 23% of beauty and personal care spend by the end of 2021.
With a crop of new retailers taking a different approach to appeal to digital natives, can they really create an exciting shopping experience without having to leave the house?
Creating connections online
With the absence of physical stores over the past year, beauty retailers focused on delivering engaging customer service online. Retailers such as FeelUnique and ASOS both report surges in make-up and beauty sales and it’s been suggested that Debenhams’ 1.4m beauty club members could be part of the reason behind Boohoo’s recent acquisition of the department store chain.
The online shopping experience once only extended to online tools such as a live chat or automated messaging but the online retail boom has led the way to a more personal shopping experience and a human approach. For many, this was made possible by moving retail employees into online positions.
The natural makeup and organic skincare store Credo Beauty is just one of the retailers leading this move. They partnered with live chat platform Hero to offer customers live virtual appointments. According to Hero, online customers who shop using Credo Live are up to 15 times more likely to make a purchase versus those who don’t. What’s more, sales via the technology now account for 15% of Credo Beauty’s total revenue.
Other retailers making a connection online include Cult Beauty who launched their Cult Concierge last year to offer personal, one-to-one guidance on all things beauty and SpaceNK who have been using virtual appointments as a tactic to drive sales. From a 20 minute ‘make-up bag refresh’ to a 15-minute ‘brand skincare spotlight’, the retailer offers specific consultations to help advise customers before buying.
With this, customers can now receive the same advice and knowledge (sometimes delivered by the same employee) online as they do in-store, and with the addition of the convenience of online shopping, there is far less need to shop in-store.
But what does this mean for physical retailers?
The end of the physical retail era?
With online shopping becoming a more seamless and convenient method of beauty buying, could this signal the end of shopping as we once knew it?
Some suggest that consumers will continue to shop online, while others predict that there will be huge demand for brick-and-mortar retail after a long period of time without it, but only if stores can deliver the experiential element that online shopping cannot.
The CEO of Dermalogica Aurelian Lis said: “Larger stores that strip human connection and touch out will falter as consumers realize that it’s not worth the hassle of going shopping if it’s going to be as drab as airport security.”
In order to draw customers into physical stores, retailers will need to create an experience that cannot be found elsewhere with importance on immersive, unique and personalised experience.
Emily Weiss, CEO of Glossier said: “As a digital-first company, we have always viewed our offline experiences as a channel for connection and community.”
Glossier’s London pop-up store saw record-breaking footfall in 2019. The New York-based brand knows the importance of fostering connection, both online and in store. The pop-up store featured areas intended to spark conversation between consumers including mirrors facing one another on a make-up stand.
Of course, some customers simply do prefer the physical experience of browsing a physical beauty counter. However, as online experiences continue to develop into a more realistic shopping environment, physical stores will need to consider adjusting to deliver something extraordinary. After all, why bother going out if you can receive the same service from the sofa?
Online retail giants
Although not strictly beauty retailers, digital retail moguls such as Amazon and Alibaba are set to take a significant share of the online beauty and health category in the next 5 years and retail experts suggest that brands should consider moving onto these platforms.
According to Wunderman Thompson’s 2020 ‘Future Shopper’ report, 63% of online consumers start their searches for products on Amazon, while 52% of online shoppers get product inspiration from Amazon. For new or small beauty brands, this can translate into healthy sales. However, for larger beauty brands, particularly those in the luxury market, selling on retail giants like Amazon means less control over the shopping experience and less opportunity to directly connect with customers.
Due to lower store footfall over the past year, many high-end brands reconsidered selling on Amazon after reviewing the benefits. One being Amazon’s ‘Premium Beauty’ and ‘Indie Beauty Shop’ categories. This not only helps to make the online shopping experience easier and more seamless for the consumer, it also restricts third-party sellers and counterfeit products helping to particularly support small businesses.
Another addition is Amazon Live, the site’s live streaming shopping function allows brands the opportunity to directly connect with their customers whilst also benefiting from the huge visibility and reach that comes with a retail giant such as Amazon.
Whilst sites like Amazon and Alibaba offer less opportunity for a personalised or luxurious online retail experience their ease and wide selection of products makes them a popular choice for many. As online shopping features continue to develop, these retailers are set to scoop a large percentage of the beauty market.
How to raise the bar
There are a number of ways that beauty retailers have raised their game in recent years in order to keep sales up and create an experience that is not too dissimilar to an in-store shopping spree.
According to Digital Commerce 360, One of the biggest struggles online cosmetics retailers face is that consumers still prefer to test cosmetics in person and are more reluctant to commit online. In fact, 46% of consumers report wanting to see beauty products in person before buying. Although almost impossible to replicate the ability to swatch a hundred different products on the back of your hand, virtual try-on services have made an appearance on a number of beauty retail sites.
In 2018 L’Oreal acquired AR tech company Modiface, pioneering the first digital ‘try on’ tool to enable customers to virtually test out make-up. Since, beauty brands and tech platforms have embraced AR for beauty, driven by a rise in consumer demand during the pandemic.
Another innovative technique is Sephora’s Skincare Advisor on Google Home. The company’s first voice experience through which clients can discover their skin type and receive daily skin care tips creating a personalised experience that essentially brings a professional beauty advisor right into your home.
Although it appears in-store shopping will continue to be a big hit for beauty buyers due to the ability to try and test products before buying, it is clear to see that the beauty industry’s move into the world of e-commerce is developing at a rapid rate.
With the addition of virtual tools, interactive experiences and the power of artificial intelligence, could a trip to the real-life beauty department be a thing of the past?
