The beauty industry is a strong industry that is expected to grow, with projections to exceed $716B by 2025 after $420B in 2018, according to compiled data from Reuters, L’Oréal, and Statista. The sector has been undergoing a profound transformation over the last few years, with the rise of new methods for reaching – and selling to – consumers. These have changed consumption behavior around the world.
People still buy cosmetics at brick and mortar shops. However, e-commerce has become one of the most popular channels to buy cosmetics, as well as beauty and personal care products. In 2018, online sales market share increased by 6.5%, while the offline sales market share decreased by 1.2%, which means that online strategies are increasingly essential to any companies in the beauty space.
As more and more consumers turn to e-commerce for their beauty shopping to enjoy a more convenient, personalized and innovative buying experience, companies that want to enter this market need to adopt digitalized solutions to “simplify and bring faster solutions for their businesses and customers” explains this paper on the digitization journey of L’Oréal.
According to Jean-Paul Agon, CEO of L’Oréal, the cosmetics market grew between +5.0% and +5.5% in 2019, and “e-commerce has been extending the reach of the beauty sector to far greater numbers of consumers all over the world, well beyond the possibilities of traditional retailing”. Technavio declared that the online beauty market size could grow by USD 57.79 billion during the 2020-2024 period.
To help you understand better the growth opportunities of this market, we will focus on some of the most important online cosmetics industry trends for this year.
Create a New Buying Experience with Virtual Reality
Customers want to have an experience when buying cosmetics that they no longer have in the traditional sector – meaning through offline channels. That’s why services based on augmented reality and artificial intelligence are increasingly popular, offering a unique and personalized shopping experience.
Users can also learn more about how to use products, and which products can be used together when they follow virtual beauty tutorials, with each step animated directly on their faces.
Allowing your customers to try your products virtually through virtual reality and facial recognition provides the opportunity to create a new type of experience your clients will enjoy. Besides, it also provides a lot of information to brands about their consumers, the trends, and their products’ popularity.
Use Social Media Advertising, Influencers, and YouTube
Consumers want to see real people using the products they interested in, which is why many follow influencers and watch many YouTube videos. YouTube and Influencers have become one of the most dominant sources of referral traffic in the last few years.
“In 2018, beauty-related content on YouTube generated more than 169 billion video views, up from 59 billion views just two years prior. The most popular types of beauty content videos on YouTube are campaign films, favorites/reviews, and tutorials. Despite the popularity of campaign films, it is actually user-generated content by beauty vloggers and influencers that drives the views” according to Statista.
Social platforms are still looking for the best ways to integrate shopping possibilities within their platforms, especially Instagram or Pinterest, where social shopping is increasingly popular. As this functionality evolves, social networks will become an even more prominent selling tool in the e-commerce market.
Exploit voice shopping
Voice shopping is an increasing trend in all kinds of markets, including cosmetics and beauty, as it’s becoming a popular channel for any e-commerce consumers, especially the new generation. It means that mastering voice shopping is important for your brand if you want to grab this opportunity to be more competitive in the digital world.
Houses are also becoming more and more connected, which will definitely support the trend of voice shopping. According to Comscore, “U.S. homes are now more connected than ever. In November 2019, the average U.S. home had 9.2 connected devices”. In addition to smartphones, voice assistants are also present in connected speakers, televisions, smartwatches, and activity sensors.
As consumers increasingly use voice technology to make purchases, voice search optimization should be an important part of your marketing and sales strategy if you want your business to be successful through voice shopping.
If you’re thinking about launching a beauty brand, you definitely need to focus on e-commerce strategies to attract clients online by exploiting beauty tech. However, you shouldn’t neglect brick and mortar, as physical shopping still rules.
Maybe the smartest move would be to develop a strategy combining brick and mortar and e-commerce to be able to create a complimentary one-of-a-kind shopping experience by reinventing it for your clients.
Combine social media and influencers, mobile apps, voice shopping, as well as artificial intelligence and augmented reality to a digitalization in-store strategy with testing centers, big screens, tablets, as well as sensorial marketing.