The replenishment nature of beauty products makes them perfect candidates for higher purchase frequency. To learn more, Digital Commerce 360 and Bizrate Insights conducted a survey of 1,053 online shippers in March 2023. As it turns out, our expectations matched how our survey played out.
Everybody’s doing it
On a positive note, all of those surveyed indicated they buy beauty products online. A look at the numbers suggests 70% of online shoppers buy beauty products online at least monthly (some going as far as buying daily). Furthermore, 31% of that group is buying online at least weekly. The remaining 30% purchase on an annual basis, so everyone has embraced the online channel.
Retailer segments play into online beauty product sales
Online beauty shoppers search for particular products and brands, taking advantage of a range of retailers to meet those needs. Each retailer segment has a role to play, though competing with Amazon and other mass merchants is challenging. Amazon tops the list of merchants shopped online at 59%. Meanwhile, mass merchants like Target and Walmart come in at 52%, and drug stores follow at 36%.
Amazon also tops the list of Top 1000 retailers. The Top 1000 is Digital Commerce 360’s database ranking the largest online retailers in North America by web sales. Walmart ranks No. 2, and Target is No. 5.
Amazon is also No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.
Specialty beauty retailers are strong, as shoppers cited buying from both standalone choices at 29% and their partnerships with larger retailers (27%). With Ulta and Sephora partnering with major retailers like Target and Kohl’s, access to these products has certainly grown, and shoppers have taken notice.
Department stores have lost market share to other retailer sectors as shoppers change how they buy. One in four survey respondents reported shopping at them.
Direct-to-consumer brand shopping at 21% is meaningful, with 12% penetration among digitally native, vertically integrated brands (DNVBs), sounding a positive note for brands going direct.
New to our survey this year were marketplaces beyond Amazon, at 18%, and social media ads at 15%. Both should see gains among their respective audiences in years to come.
Dimensionality is the differentiator
Beauty buying online is multi-dimensional, from replenishment to experimentation and education, where execution can be a differentiator. The web is perfect for comparison shopping, and 36% felt it was easier to do that online. Shoppers also spend time learning about products and experimenting, helping to make new product sales viable with purchases taking place online and offline.
From an education and experimentation point of view, online shoppers were learners at their core in the following ways:
- Learn about new brands and products, and buy online: 30%
- Learn about new brands but buy in physical stores: 22%
- Experiment online when looking for new products: 22%
Given the nature of the beauty category, 34% report that most of their purchases are for replenishment. The significant loyalty to brands is critical for retention, as their loyalty to brands and products in the beauty category leads to frequent buying for 34% of participants. Another online driver is finding out-of-stock products in the stores. That was a reality for 31% of those surveyed.
Product detail pages are critical to buying beauty products online
Beauty is a feature-rich category, and online shoppers are hungry for product information.
Information of interest includes product details (56%) and the all-important product availability coming in No. 2 (55%). A list of ingredients is desirable for 48%, and 23% call out the ever-growing interest in vegan and cruelty-free products. Of course, imagery is not to be slighted, as 25% believe ample product images have a role to play.
Online shoppers appreciate saving money, embracing promotions and samples (27%) and gift with purchase promotions, a beauty mainstay at 19%.
Selection tools are playing an increasing role in profiling shoppers and assisting them to make smart selections. That includes the ability to profile beauty needs (22%), how-to guides or video tutorials (12%) and virtual try-on tools (11%)
Logistics will be top-of-mind, making in-store pickup (BOPIS, 17%) and curbside pickup (13%) options desirable. Mobile apps, which 12% noted, will undoubtedly play a role, as does the retailer’s social media presence at 9%.
Shoppers find value in using tools to assist in beauty purchasing
- Color-match tools: 35%
- Virtual try-on tools: 21%
- Augmented/virtual reality: 10%
Customer service sees online shoppers embracing chats with beauty experts along with other outreach. Chatting with a beauty expert (23%) topped the list. Others of interest among beauty buyers were sending a question to a retailer (17%), sending an image to a retailer (15%) and booking an in-store beauty appointment (13%).
Beauty subscription boxes see adoption and this bodes well for future purchasing as 20% tried this model. Lastly, 15% watched a livestreaming beauty event while 17% downloaded a retailer’s mobile app (17%).
Shopping perks and experiences
Saving money and perks matter most to price-conscious online shoppers and that meant rewards program perks for 36%. 26% gravitate to brands believing they would be more likely to offer free shipping. And speaking of shipping, 21% of respondents felt they would get their products quicker.
A strong beauty shopper experience starts with trust, broad assortments and comprehensive content all serving to inspire the shopper. Our results revealed that 23% had greater trust in brands, while 22% enjoyed the broader product assortments seen among these companies. Along with the trust factor, 22% had less concern for counterfeit goods among brands.
The experience also came into play, with 19% choosing brands for their more comprehensive content and the complete brand experience. They cited a more authentic experience (16%) and the fact that brands were more transparent about both the values and products they sell (14%). That same 14% cited they enjoyed being part of the brand community, with 12% finding the sites more inspiring.
The biggest influence
There are a broad array of influencers when it comes to selecting beauty products, but friends come first, where just under half (46%) acknowledge their role. That compares with just 15% who pointed to celebrity influencers.
Beyond influencers, video is a strong factor in beauty selection. That starts with YouTube (32%) and continues to how-to videos/tutorials (23%) and livestreaming events (11%).
Retailers must have strong content across social media to optimize the impact of influencers. The numbers here came in for Facebook (31%), Instagram (29%) and TikTok (26%), respectively.
Beauty subscription services can play an influential role as well among the 16% who had signed up for them.
Reasons to walk into a store
Store visits persist.
When asked about when they choose to go to a physical store, almost half of online beauty buyers said they need their products quickly (47%) or want to see the products in person (46%). Other tactile reasons include in-person testing (36%) and simply getting a full sense of the brand experience (16%). Some 20% also enjoy getting advice from in-store experts.
Shoppers also will seek out the store channel when they want to save money. That includes in-store sales or promotions for 39% and not wanting to pay for shipping for 37%. Omnichannel needs, from pickups to returns, prompt visits. They included an option to do both of these for 18% of survey respondents.
20% want to support local retailers post-COVID, along with attending an event at 10%.
There is a trust factor as well for 14% who are more confident buying in person. 12% expressed a concern that online shopping will mean receipt of counterfeit goods.
Does it look good?
Next we dove into how a site presented itself. First and foremost, the site look and feel is most important to online beauty buyers. 41% of survey respondents cited that element. Other important presentation factors were accurate swatches that aren’t photoshopped (35%) and model diversity (22%).
Thus, branding from sustainability to one’s story and stances including diversity, trade, social and charitable elements continue to see interest among shoppers. It is nice to see sustainability rise to the top of this group, and therefore it deserves a mention.
Online shopper sentiment was as follows:
- Sustainability practices: 25%
- Brand’s story: 24%
- Diversity stance: 21%
- Fair trade views: 18%
- Social and political views: 18%
- Charitable giving: 15%
It’s powerful to see that more and more shoppers care about sustainable beauty brands.
78% of these online shoppers factored in sustainability when purchasing beauty brands. Some 19% already buy these products (19%), and some are even willing to pay extra (18%). The largest segment (28%) is those who care about sustainability but do not yet put their pocketbooks on the line to seek out such products. 13% don’t want to pay more. The opportunity is to convert those who care and haven’t yet converted to becoming customers.
In many ways, beauty is one of the easiest categories for online consumption. Shoppers can get comprehensive information to guide their decision-making on first-time purchases. Then, replenishment kicks in and buying is almost on autopilot. Online shoppers have many choices, so the brands retailers put forth, the features, and tools they employ to guide their customers will ultimately determine their market share.
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