The report, “Beauty and the E-Commerce Beast: 2014 Edition,” found that an industry rooted in the ability to touch, smell, sample and experiment with products in stores is being played by a new set of rules.
Almost half of people surveyed for the research (47%), said that they purchased more beauty and personal care products online in 2014 than in the prior year. Even “experiential products” — fragrances and color cosmetics — saw a 16% increase in frequent purchasers.
“Beauty online is so much more than just a transaction,” says A.T. Kearney partner and study coauthor Hana Ben-Shabat. “It’s in fact one of the most active categories on the Internet. So online is becoming one of the most important paths to purchase. And those who buy beauty products online make frequent purchases.”
For instance, the A.T. Kearney study revealed “an increased willingness on the part of consumers to buy fragrances and makeup online, versus habitually used products that they simply replenish.”
Walgreens.com and cvs.com were ranked among the top 10 websites for beauty and personal care products. Amazon was listed as the most frequently shopped site, with walmart.com a distant second.
Although brand-direct sites such as avon.com, loreal.com and olay.com showed growth, they still account for a small share of the market.
“It’s no longer sufficient for beauty and personal care brands and retailers to invest experimentally in digital,” said Ben-Shabat. “Winning companies are those that can figure out how to make the link between online and offline, digital and physical. And collaboration between manufacturers and retailers in the quest for engaging today’s online consumer is more important than ever before.”
At $4.3 billion and growing, online beauty and personal care sales represent 6.5% of total sector volume. The study found that skin care has a higher e-commerce penetration than bath and body and hair care.
A large difference in penetration also exists between prestige cosmetics (11%) and mass products (6%).
Brick-and-mortar outlets remain “the main channel for beauty and personal care,” according to Kosha Gada, an A.T. Kearney principal and study coauthor. “But the role of the store is shifting from a transactional platform to an experiential one,” Gada explained, “and increasingly every consumer that walks through the door is doing so armed with product information and opinions to a degree unlike ever before. This requires brands to rethink elements such as shelf planograms, retail staffing and integration between online and in-store experiences.”