In This Article
The beauty ecommerce business is booming. In 2023 alone, the beauty industry was estimated to be over $510 billion.
Much of that decline is likely tied to brick-and-mortar stores closing in response to local lockdown rules or general consumer fear of populated spaces. However, the beauty ecommerce market has shown remarkable resilience and growth. In 2024, shoppers are expected to spend close to $646 billion on beauty and cosmetics online, with worldwide ecommerce beauty purchases accounting for 25% of all beauty retail sales – up from 11% in 2019.
Beauty ecommerce businesses have significant opportunities to capitalize on this shift in consumer behavior as customers increasingly turn to online channels for their beauty products. Smaller and newer ecommerce stores have a unique advantage in this landscape, as they can act quicker with more flexibility and precision to reach their target customers in the ecommerce beauty industry. This agility allows them to rapidly adapt to emerging trends and consumer preferences than larger, established brands.
Businesses using email marketing doubled their conversion rates 2020 compared to 2019, according to Omnisend’s Ecommerce Statistics Report. This trend has continued, with personalized email marketing becoming an essential strategy for beauty brands to engage customers and drive sales. Personalization extends beyond just using a customer’s name – it involves tailoring product recommendations, content and offers based on individual preferences and purchase history.
Other omnichannel marketing channels, like push notifications, saw conversion rates leap from 4.86% to 28.1%. This significant increase underscores the importance of an integrated, multi-channel approach in beauty ecommerce. Brands that successfully combine online and offline experiences, such as virtual try-ons and in-store events, are seeing higher engagement and conversion rates. For example, beauty retailer Sephora has effectively bridged the gap between digital and physical shopping experiences through its mobile app and loyalty program.
There are opportunities, even in a post-pandemic landscape. But that doesn’t mean it’s easy. A successful beauty-related ecommerce business hinges on recognizing and adapting to worthwhile beauty ecommerce trends most likely to drive profit. These trends include sustainability, AI-driven personalization, augmented reality (AR) experiences, and the rise of social commerce. Brands that effectively leverage these trends are positioning themselves for significant growth in the competitive beauty ecommerce market.
Download now: Ecommerce omnichannel marketing for the beauty, health, and wellness industry.
As we delve into the key trends shaping the beauty ecommerce landscape, it’s important to note that success in this industry requires more than just following trends. It demands a deep understanding of your target audience, a commitment to product quality and innovation, and the ability to create engaging, personalized experiences across all touchpoints. Let’s explore how you can leverage these trends to grow your beauty brand in the digital space.
Sustainable Products and Packaging for Environment-Conscious Consumers
Sustainability has become a key driver in consumer purchasing decisions, particularly in the beauty industry. As environmental awareness grows, beauty brands increasingly focus on eco-friendly products and packaging to meet consumer demands and differentiate themselves in a crowded market.
Despite the ongoing debates about climate change, beauty industry statistics show that consumers care about the environment and are willing to spend extra for sustainable products and packaging. This shift in consumer behavior is not just a passing trend but a fundamental change in how people approach beauty purchases. According to recent studies, 24% of consumers consider products free of harmful or synthetic materials ‘extremely important’ when choosing a retailer. At the same time, 18% cite sustainable packaging as a critical factor in their purchasing decisions.
A 2018 Nielsen report showed that sustainable products could generate anywhere from $140-$150 billion in the U.S. alone. According to industry estimates, the global natural and organic beauty products market will skyrocket 158%, from $34.5 billion in 2018 to $54.5 billion in 2027. Online beauty sales are set to catch a sizable portion of that revenue. This growth is further supported by more recent data, which projects the Natural and Organic Cosmetics Market to grow at a CAGR of 9.76% from 2021 to 2027, reaching $33.04 billion by 2027. This demonstrates the significant market opportunity for brands prioritizing sustainability and clean formulations.
So where does that put you? If you’re thinking about opening a beauty ecommerce store—and really, now is a great time to do it—then you should consider creating or selling products that place sustainability and naturalness at the heart of your business. This could involve developing products with organic ingredients, implementing eco-friendly packaging solutions, or adopting a circular economy model. For example, brands like Uni are shifting away from non-sustainable products and packaging, encouraging customers to refill and reuse their dispensers instead of throwing out single-use packaging. By making sustainability a core part of your brand identity, you can attract environmentally conscious consumers and differentiate your brand in a crowded market.
Not only will you help the environment by reducing harmful ingredients, but you will improve your bottom line. For example, cosmetic sales grew 2.3% in 2020 after eliminating parabens. Cosmetics company Kiehl’s removed parabens from its face cream and saw a $5 million sales bump. This trend is not only limited to the skincare industry. The demand for clean and sustainable beauty products extends across all categories, from makeup to hair care. Brands that can effectively communicate their sustainability efforts and the benefits of their clean formulations are seeing increased customer loyalty and higher sales. For instance, Love Beauty and Planet made a $100,000 grant pledge to help reduce carbon emissions, demonstrating their commitment to sustainability beyond product formulations.
Do note that it is insufficient to claim that your products are “natural” or “sustainable.” Consumers are eagle-eyed and demand to know the specifics behind this sustainability and naturalness. Transparency is critical in building trust with environmentally conscious consumers. This means being transparent about your ingredients, sourcing practices, and manufacturing processes. Consider implementing a traceability system that allows customers to track the journey of their products from source to shelf. Additionally, third-party certifications from recognized organizations can lend credibility to your sustainability claims and help differentiate your brand in a crowded market.
This is most likely due to the difference in cosmetic ingredients banned in the U.S. compared to Europe. While the United States has banned a mere 11 ingredients from cosmetic products, Europe’s list includes 1,328—with strict policies regulating another 500 ingredients. This disparity has increased consumer awareness and demand for transparency in ingredient lists. As a result, many beauty brands are now going beyond regulatory requirements, voluntarily banning potentially harmful ingredients and adopting ‘clean beauty’ standards. This trend is particularly evident in the rise of ‘free-from’ claims, where brands highlight the absence of controversial ingredients like parabens, sulfates, and phthalates.
Due to such vast differences, consumers are educating themselves on the ingredients included or processes used to create beauty products. This increased consumer knowledge has led to a shift in marketing strategies, with many brands now focusing on ingredient education and transparency. For example, some beauty brands create detailed ingredient glossaries on their websites, explaining the purpose and origin of each component in their products. Others are leveraging social media and content marketing to educate consumers about the benefits of certain ingredients and the science behind their formulations. This trend towards ingredient transparency and education presents an opportunity for beauty ecommerce brands to build customer trust and loyalty.
Hyper-Personalization to Make Your Customers Feel Appreciated
In the competitive landscape of beauty ecommerce, hyper-personalization has emerged as a critical differentiator. This approach goes beyond simple product recommendations, leveraging advanced data analytics and AI to create tailored experiences that resonate with individual customers. By understanding and anticipating customer needs, beauty brands can make more meaningful connections and drive loyalty in an increasingly crowded market.
“Personalization,” in terms of online shopping, was once the simple practice of inserting a first name in a mass email. However, data collection, automation, segmentation, and artificial intelligence (AI) improvements have created opportunities for enhanced personalization or hyper-personalization. This advanced approach allows beauty brands to tailor every aspect of the customer experience, from product recommendations and content to email marketing and product formulations. For example, skincare brand Proven uses AI to match products to people’s skin types and lifestyles, analyzing factors like genes, routine, and environment to create personalized skincare products.
Suppose personalization is akin to using the person’s name when talking to them. In that case, hyper-personalization is using their name and talking to them at the right time, armed with the right product or recommendation. In truth, this is less personalization and more individualization—the company recognizes the customer’s place in their journey and recommends the most timely product or information. This level of individualization can be achieved through various means, such as AI-powered product recommendation quizzes, personalized email campaigns based on browsing and purchase history, and even custom product formulations. For instance, direct-to-consumer hair care brand Prose uses an online quiz that asks consumers about their age, hair type, lifestyle, and other factors to match customers with a personalized assortment of hair care products.
This pays off for both the customer and the company. Omnisend’s Ecommerce Statistics Report 2020 showed that personalized automated messages led to nearly one-third of all orders, the most popular being the “happy birthday” email. The benefits of hyper-personalization extend beyond just email marketing. According to recent studies, consumers receiving personalized recommendations are 75% more likely to purchase. Furthermore, companies that excel at personalization generate 40% more revenue from those activities than average players. These statistics underscore the significant
This is also reflected in beauty industry insights. Beauty brand INGLOT Canada, for example, boosted revenues by a whopping 4,798% by using various hyper-personalization techniques, as illustrated in the diagram below. Other beauty brands have seen similar success with personalization strategies. For instance, Sephora’s highly personalized Beauty Insider program has been a critical driver of its success, earning the top spot in Sailthru’s Retail Personalization Index for five consecutive years. The program uses customer data to tailor product recommendations, offers, and content across all channels, creating a seamless and personalized shopping experience that keeps customers returning.
The reasoning is simple: hyper-personalization makes customers feel more appreciated, which helps influence them to buy your products over the competition’s. This appreciation translates into tangible benefits for beauty brands. According to recent studies, 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when this doesn’t happen. Moreover, personalization drives performance and better customer outcomes, with companies that grow faster driving 40% more of their revenue from personalization than their slower-growing counterparts. By investing in hyper-personalization strategies, beauty brands can meet customer expectations and drive significant growth and loyalty.
A 2017 Epson survey showed that 80% of respondents were willing to buy from a business offering personalized experiences. This trend has only intensified in recent years, with more recent data showing that 88% of shoppers feel the brand’s experience is just as necessary as its product. For beauty brands, investing in personalized experiences is no longer optional – it’s a critical component of success in the competitive ecommerce landscape. From personalized product recommendations to customized skincare regimens, beauty brands that can effectively tailor their offerings to individual customer needs are poised to capture a larger market share.
Because of the nature of beauty products, hyper-personalization allows you to engage with customers at any point during their journey, including when they:
Beauty brands must leverage advanced technologies and data analytics to implement hyper-personalization effectively. This might include using AI-powered tools to analyze customer behavior and preferences, implementing machine learning algorithms to predict future purchases, or utilizing augmented reality (AR) for virtual try-on experiences. For example, L’Oréal partnered with Facebook to bring AR-fueled makeup try-ons to shopping on Instagram, allowing customers to virtually try products before purchasing. By combining these technologies with a deep understanding of customer needs, beauty brands can create truly personalized experiences that drive engagement and loyalty throughout the customer journey.
- Are shopping for a good brand
- Are narrowing down their choices
- Need to replenish their products
- Seek recommendations for related products
Here’s the kicker: knowing where your customers are in their journey takes effort. Doing it manually or with a few disconnected tools takes time and money. However, the investment in robust customer data platforms (CDPs) and AI-powered analytics tools can significantly streamline this process. These technologies can help beauty brands collect, analyze, and act on customer data in real time, enabling them to deliver personalized experiences at scale. For example, beauty brand Sephora uses its Beauty Insider program to track customer preferences and purchase history across all channels, allowing for highly personalized recommendations and communications. By leveraging these advanced tools, beauty brands can create a seamless, customized experience that meets customers wherever they are in their journey.
The good news is that there are tools that can help you multitask on time. Omnisend, for example, enables you to divide your customers into a few different groups with its segmentation features. You can group them based on customer behaviors (recent purchases, pages or products viewed, etc.) or demographics (such as age, gender, and location). Beyond basic segmentation, advanced AI-powered tools can help beauty brands create even more granular and dynamic customer segments. For instance, some platforms use machine learning algorithms to identify patterns in customer behavior and automatically create micro-segments based on these insights. This level of segmentation allows for highly targeted marketing campaigns and personalized product recommendations. Additionally, real-time personalization tools can adjust content and offers based on a customer’s browsing behavior, creating a truly dynamic and responsive shopping experience.
Once you’ve placed them into different groups, you can use Omnisend’s automation to reach them at the right time with the proper product recommendations or information they need.
Sounds complicated? It is if you don’t know your business or customers. But if you have a good grip on that, then it’s relatively straightforward.
Try it out with your free trial (three-minute setup) and see how to create your segmentation and automation for your beauty ecommerce business.
See how beauty brand INGLOT Canada used Omnisend’s marketing automation to boost revenues by 4,798%
AI, AR, and Virtual Try-On to Boost Engagement
Speaking of hyper-personalization and individualization, AI and augmented reality (AR) are helping businesses personalize the online customer experience.
AR is undoubtedly the talk of the beauty ecommerce industry, as customers can virtually try on products with some help from AI. The product—such as lipstick or a hair color product—is typically overlaid on the customer’s picture or live video.
This is precisely what Chinese giant Alibaba did when it partnered with Perfect Corp to create the YouCam Makeup AR. People were excited to play around with the new tool, leading to a 300% increase in conversions. It was so successful that the significant global brand MAC used the same Virtual Try-On technology for its products.
Other major brands like Avon are harnessing AR beauty technology as a critical sales tool. L’Oreal is even announcing plans to transform from a beauty company to a “beauty technology” company.
So what does this mean for you? Although big names like Alibaba and MAC are using this makeup AR, the YouCam Makeup tech is available to businesses of all sizes.
It’s still in the $400/month price range so that it may be a better fit for more established beauty brands. But other options are on the horizon. Virtooal’s Decorative cosmetics try-on app works with Shopify and other ecommerce platforms.
As with all technology, continual development and new competitors will eventually drop prices and improve affordability.
Influencer Marketing is Critical for Branding and Reach
The reign of the Instagram influencer continues, even if some influencers lost business amid the initial pandemic scare. Companies have loosened their marketing purse strings and nearly doubled their influencer marketing spend.
Think about it. More people are at home, and stores are shuttering, sending consumers online. Influencer marketing on popular platforms like Instagram and YouTube is the perfect avenue for capturing browsers’ attention.
Influencer marketing can have immense power when done right. The result is an endorsement from the very people your potential customers trust. A 2019 study from the Harvard Business School demonstrated that influencers are a significant source of information for customers when making a beauty purchase decision.
A 2019 study by Mediakix found that 80% of marketers who utilized influencer marketing found it to be an effective strategy, with 35% claiming it “very effective.”
This explains why major beauty brand Estee Lauder spends roughly 75% of its marketing budget on influencers.
Choosing the influencer that best fits your beauty ecommerce brand is essential. The choice may be an in-demand, high-budget top influencer. Or it is a micro-influencer with limited reach but strong conversion potential.
Brand Partnerships to Unlock Audiences
The beauty of business partnerships is that you can utilize each other’s existing audiences to boost your brand and sales.
Significant brands are doing this regularly. For example, fashion brand Eddie Bauer partnered with Ford nearly 30 years ago. More recently, MAC collaborated with the famous Chinese game Honour of Kings. Coca-Cola partnered with the eyeshadow company Morphe.
In these partnerships, brands partner with companies far outside their industries. The connection is an overlap between their audiences.
There are a few ways to do brand partnerships in the beauty space:
- Collaborate with brands from a different industry considered at a similar or higher level, ensuring some customer overlap. Fashion and beauty always work well together. Beauty can also align with home decor and electronics.
- Contemplate partnerships with non-traditional brands like influencers. Instead of simply using influencer marketing—often a short-term campaign—create a longer-term relationship that involves utilizing each others’ brands and audiences.
- Partner with other organizations, such as schools, charities, and local businesses. Tweak your marketing messages to be appropriate for the audience.
How to Use Beauty Ecommerce Trends Effectively
Embracing cosmetic and skincare ecommerce trends goes a long way in boosting your store’s relevancy. Success depends on a sturdy ecommerce marketing foundation. Here are the essentials before deploying any of the tactics above:
- Create your online store. If you haven’t yet launched your beauty ecommerce store, find a platform that works for your business. Shopify is generally recommended, but other alternatives, such as WooCommerce or BigCommerce, might work for your niche.
- Choose your products. Identify product lines focused on sustainable, natural beauty ingredients that ease your customers’ minds.
- Use an ecommerce marketing automation tool. The word ‘automation’ is essential here. It allows you to schedule automated messages for the right time so you can focus on other parts of your business. Play around with a free Omnisend trial and see how it can help your business.
- Get viewers, subscribers, and buyers. Use the tips from above, such as influencer marketing, to reach your audiences. Don’t forget social media and Facebook ads (arguably the most accessible) to fine-tune your marketing messages. Once traffic starts flowing, use a marketing automation tool like Omnisend to build an email list with features like exit-intent popups.
- Follow up with buyers to turn them into repeat buyers. Again, your automation marketing tool will do the heavy lifting. With Omnisend, for example, you can use segmentation (customer groupings) to locate those who completed a purchase 30 days ago and may need a refill.
- Improve your business and scale. Concentrate on pinpointing the processes, products, and messaging that work. Improve your strengths and minimize your weaknesses. Once you’ve figured that out, you can scale your business. Rinse and repeat.
Ready to begin your journey or elevate your stature in the ecommerce beauty industry? Get your hands on a free trial of Omnisend to jumpstart the possibilities.
