The beauty sector, and more particularly the online beauty one, has been booming for many years now, both in France and internationally.
Indeed, every year, sales of cosmetic products in stores are decreasing in favor of online sales.
Let's take a look at the cosmetics market and the new challenges faced by retailers and e-tailers in the sector.
E-commerce, the new standard for beauty brands?
Digital channels have become essential for brands. Indeed, when stores are closed or when going to a store becomes impossible, consumers massively reorient themselves towards e-commerce.
On one hand, Under the effect of Covid-19 restrictions, physical stores have recorded a 26% drop in their sales of selective beauty products, according to The NPD Group. The cause: a three-month closure, followed by strict travel restrictions and curfews.
On the other hand, online sales have taken over from consumers. Thus, in the midst of a confinement, online beauty sales have increased by 73%, reflecting the growing interest in a channel that is now unavoidable.
E-commerce sites specializing in beauty have therefore taken advantage of this particular period. Their sales jumped 43% between February 2020 and February 2021 in France (vs.a 10% growth between February 2019 and February 2020) according to the latest NPD Group report. These platforms took full advantage of store closures and changes in consumer behavior, which essentially turned to online shopping during this period.
However, despite this strong growth, the share of online cosmetics sales in the French market remains lower than in the US, at 7% versus 15%.
Highly digitalized consumption habits
In 2020, e-buyers preferred to buy beauty products online from an online retail giant: Amazon (25.1% of e-buyers placed an order for cosmetics there). Yves Rocher comes second, with 24.4% of buyers, closely followed by Sephora and Nocibé.
The fact that online shopping gives access to a wide range of products and the ability to easily compare prices in order to access the most advantageous rates, make it really attractive for consumers.
A trend which is expected to increase in the coming years.
Indeed, if physical commerce is regaining its colors, especially in a market as experiential and sensorial as beauty, the new preponderance of digital in our post-Covid lives is becoming obvious. According to McKinsey, digital should represent 23% of the beauty market in 2022 and become the first business channel by 2024, with 28% of sales. In China, half of the sector's sales will be made online by 2023, thanks in particular to the massive use of WeChat-type super apps and their frictionless payment.
Thus, although in-store sales are still well established (80.7% of global beauty product sales), consumers are increasingly turning to e-commerce
Brands must therefore demonstrate their ability to master their offer on both fronts: digital and physical.
But how can they meet the new needs of consumers and the challenges brought about by digitalization?
The challenges of digitalization at the heart of the cosmetics market
Even if the latest pandemic has certainly had negative impacts on global sales, it has proved to be an opportunity for brands to be creative in order to differentiate themselves.
They had no choice but to find concrete solutions to the challenges posed by the restrictions, including the closure of physical stores.
MAC, for example, gave its customers the possibility to try on lipsticks online before ordering them, thanks to their webcam or by uploading a photo of their choice.
Sephora has also set up a system, the Virtual Artist, allowing consumers to try products.
Faced with these new practices and the reluctance they raise among consumers, brands must implement real strategies to support and advise them. This will be the key to the digitalization of the beauty industry, especially since it is a sector where the sensory is essential in the consumer's purchasing decisions.
What role for consumer reviews?
One of the advantages of e-commerce is the information that can be gathered about consumers who have made a purchase.
This information allows brands to better understand the expectations of consumers, to segment them and to offer a personalized experience to each one.
This can be done on the one hand thanks to cookies that allow tracking the behavior of consumers on online sales sites. They allow, for example, to suggest in a targeted way products likely to interest each consumer.
Another information lever is consumer reviews.
Appreciated by consumers, these reviews left on websites allow Internet users to exchange with each other and to identify the positive and negative points of each product.
The collection of this information is crucial for brands, whether it is for the launch of a new product or for the improvement of an existing one.
The challenge for brands is to take into account all of these opinions, beyond the global note or rating. Indeed, the comments are often a mine of information on the perception that consumers have of product claims (care benefits, product texture...).
Leveraging consumer reviews is therefore an effective way for brands to get closer to their consumers, to understand them and to become anchored in their habits.
In this context, consumer review analysis tools, such as the Beautysen dashboard, are becoming indispensable tools for brands.
Thus, despite a decline in sales due to the exceptional health situation of recent years, e-commerce in cosmetics has a bright future ahead of it.
Many brands have invested intelligently in digital, both in-store and online.
In this race for innovation, the ability to adapt quickly to changing consumer behavior is essential to creating the beauty of tomorrow.
To learn more about our solution, you can discover how we accompanied the Clarins brand during the renovation of one of its lip products: https://www.voysen.com/use-cases