The changing face of beauty: what will happen to the industry after the eCommerce boom subsides?

Fashion & Lifestyle Ecommerce9 min read

When you consider beauty shopping, the last thing might think is that it is well suited to eCommerce. Beauty has traditionally offered consumers a touch-heavy experience; beauty shoppers want to interact with products like make-up, perfume and even personal care products which explains why in-store shopping made up about 85% of beauty purchases prior to COVID-19. But all this has changed now; in-store shopping has been restricted for retail overall, and due to hygiene concerns, features such as sampling at the makeup counter have been severely restricted, leaving most beauty shoppers with one option: online shopping

While overall global beauty revenues are expected to fall 20-30%, this segment remains in the top 5 most purchased categories online during the pandemic, with online revenues increasing by 20-30% compared to pre-pandemic levels. As beauty players grapple with losses, and beauty sales shift more and more online, consumer behavior and the path from discovery to purchase is evolving. To meet the changing landscape of beauty, brands and retailers need to change their strategies to better meet the demands of online beauty shoppers. Let’s take a look at the top trends and how they will shape the future of the beauty industry:

Not all beauty is created equal

Beauty is a broad industry, spanning from personal care items such as hair care products to skincare and, of course, makeup. Typically in times of economic hardship, consumers splurge on makeup; “The Lipstick Index” refers to the phenomenon of makeup being a feel-good, affordable luxury purchase which is recession-proof. But in an unprecedented shift in consumer behavior, the demand for color cosmetics such as foundation and lipstick has decreased by as much as 70% as a result of changing consumer tastes during the pandemic. As more consumers are staying home and the emphasis on wellness and health has taken on new significance, beauty shoppers’ tastes have shifted overwhelmingly towards skincare, making it the winner of the pandemic where beauty is concerned. Compared to the end of 2019, clicks for facial skincare as a category have grown by 214% according to Stylight’s Skincare Report 2021. With consumers spending more time at home than ever, the focus of beauty has shifted towards long-term self care rather than quick fixes with cosmetics. But even before the advent of COVID19, there was already reason to believe that the landscape of beauty was shifting. Younger generations such as Gen Z are wearing less makeup and instead expressing greater interest in skincare products, indicating that the long-term future of beauty is skincare. 

Certainly for several months prior to the pandemic we’ve been aware of the ‘no makeup’ look evolving. It’s a more natural look, less glitzy, less high fashion, these consumers were already focusing on skincare more than makeup.”

Bill George, CEO of Paris Presents

The rise of virtual beauty 

The growing popularity of health-based skincare is not the only trend that retailers and brands need to be aware of. To counter the loss of a high touch experience beauty shoppers crave, retailers are racing to provide virtual tools that mimic the feel of shopping for beauty products in-store, while also providing increased personalization. Cosmetics company NakedPoppy, created an online beauty assessment or “virtual beauty consultation” to match shoppers with products that suit their skin to provide a digital experience that is also highly customized. 

Some brands have gone even further, offering virtual try on tools powered by artificial intelligence and augmented reality technologies, which have been widely used by shoppers since the beginning of the pandemic. MAC Cosmetics’ Virtual Try On tool, which enables users to try on over 200 eyeshadow and lipstick shades, has seen an 300% increase in engagement since the beginning of the lockdown. Alibaba reported a fourfold increase in their conversion rate just 6 months after adopting AR industry leader, Perfect Corp’s technology. 

From surveys to find the perfect skincare regime for every skin type to online beauty consultations to virtual try-on technology, COVID19 has forced the beauty industry to adapt and create an increasingly customized, digital experience for shoppers. Even after beauty shoppers return to stores, these virtual tools will still be essential to providing a good customer experience by offering personalized recommendations and formulas through AI technology

The Virtual Try On tool, created by MAC Cosmetics, for virtually sampling over 200 lipstick shades.

TikTok beauty drives engagement

But virtual tools are not the only way beauty brands and retailers are engaging an online audience. Social media platforms such as Instagram and TikTok are proving to be valuable tools to garner interest & foster engagement among a younger audience, with many users looking to these platforms for the latest beauty trends. In fact, 80% of women believe that social media platforms are the source of new trends. As our TikTok Beauty Trends Report indicates, consumers are seeking new beauty trends on the platform, which thereby presents a unique opportunity for brands looking to reach their audience.

Cult beauty brands, Kaja and I Dew Care, point to TikTok as the top platform for community engagement, making it a key component of their omnichannel strategy. In some cases, the platform even drives sales for beauty brands. After being featured in a TikTok post by influencer Kaelyn White, The Ordinary’s AHA 30% + BHA 2% Peeling Solution experienced a 427% increase in sales. It’s become clear that, overwhelmingly, younger users are turning to TikTok as a trusted source of information about beauty products, as the platform aligns with their values of authenticity & community. TikTok is, therefore, an obvious choice for influencer marketing, with nearly 50% of brands considering micro influencers their most effective marketing tool

But while TikTok and Insta Reels undoubtedly drive brand awareness and engagement, bridging the gap to drive conversions is still proving difficult. Still, TikTok is testing features which may enable in-app shopping sometime in the future. Collaborating with Shopify, the platform is now enabling brands to create & manage their campaigns from Shopify’s dashboard. While it may be a few years before TikTok will mature into a social media platform which drives sales, the future is promising. 

The future of beauty 

So what is the outlook for the beauty industry? Are these trends here to stay? 

The skincare boom is certainly not losing momentum anytime soon. As consumers continue to see the positive impact of skincare products that improve their complexion, we will continue seeing this sector devour other sectors like color cosmetics. And it makes sense: clearer, better skin means fewer consumers turning to foundations, concealers, & co. to improve their complexions. This does not mean the end of color cosmetics, however. We may indeed see an uptick in lipstick and perfume sales after restrictions related to the pandemic are lifted and more individuals return to the workplace, restaurants, bars and clubs. 

While there is hope for the color cosmetics industry, the way consumers purchase beauty will likely be changed forever. Beauty shopping will never go back to being a fully in-store experience; instead we will see beauty browsing and shopping shift more and more online. With many major brands investing in virtual technologies to help facilitate online beauty shopping, it’s clear that they also see the potential of beauty eCommerce in the long run. This is also supported vastly by social media beauty, which instills a sense of security in consumers, enough to even make the leap from engagement to conversion. This by no means spells the end of beauty shopping in-store. The key to success, however, will be to unite online and offline activities into a smooth and user-friendly omnichannel experience, which captures consumers’ attention, secures their confidence and trust and eventually leads them to purchase.

written by:

Anne Startup

Jr. Partner Marketing Manager

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