Once exclusively reserved for physical in-store shopping, the beauty industry is increasingly online. The beauty industry, broken into categories of beauty tech, cosmetics, fragrances, personal care, and skin care, is expected to generate $646.2 billion in 2024, up 3.3% from 2023’s overall revenue.
An estimated $88.47 billion will be due to online beauty purchases. Shopping online for beauty products is becoming popular with all demographics—in fact, one survey found that 71% of U.S. beauty shoppers will use a specialty beauty retailer’s website when researching new products.
To help your beauty ecommerce brand stand out from the competition, we’ve collected the key stats, ecommerce strategies, and innovation defining the industry in 2024. Read on to get the details.
What’s the state of the beauty ecommerce industry in 2024?
In 2024, online sales are expected to make up 19.2% of the total revenue of the beauty and personal care industry. This number is only growing year over year as online shopping becomes more prevalent.
Over on e-retail giant Amazon, health and personal care sales are expected to take up 34.7%—almost one-third—of the platform’s entire ecommerce sales, up from 33.2% in 2023.
Online shopping will also be the number-one way people shop for beauty products, followed by heading to specialty retail stores, making purchases at their local grocery store, and finding products at travel retail stores.
The United States has the largest beauty and personal care market of any country, accounting for $97.81 billion in revenue. China is second ($67.18 billion), Japan is third ($45.96 billion), and India is fourth ($30.54 billion).
Consumer spending in prestige categories is also rising. Across four main beauty categories (makeup, skincare, fragrance, and hair care), the industry saw a larger year-over-year increase in revenue for prestige products than for mass-market products.
“The beauty industry is strong, and the outlook remains positive for both the mass and prestige sides of the business in 2024,” says Circana’s global beauty advisor, Larissa Jensen. “This performance is remarkable given the phenomenal growth it has experienced for the past two years, but the industry should not rest on its laurels.”
Larissa continues, “Consumers continue to cope with economic pressures, and being in tune with their shifting mindset is a must. Flexibility, creative thinking, and effectively harnessing high consumer engagement are all part of the winning formula to drive continued growth.”
The top 10 beauty ecommerce trends of 2024
Another part of the winning formula is to stay on top of trends. Keep these 10 beauty ecommerce trends in mind as you adjust your marketing and sales strategies for 2024.
1. Consumers expect personalized beauty offerings
Far from being a nice-to-have bonus, personalization has become ingrained in customer expectations. According to Segment’s 2023 State of Personalization survey, over half (56%) of consumers say they will become repeat customers after a personalized experience, up from 49% in 2022.
HubSpot’s 2024 State of Marketing report found that 94% of marketers say personalization boosts sales, too. Customers who get personalized recommendations and experiences are more likely to purchase and return for more. Beauty brands that don’t deliver tailored experiences to individuals risk leaving money on the table and losing out on customers.
Made-for-you beauty is one way ecommerce brands are personalizing their product offer to individuals. For example, clean beauty brand Pure Culture uses surveys and at-home skin tests to build custom skin care formulas.
Each set is sold for around $80 and takes into account variable factors like customers’ lifestyles, diet, genes, and personal skin goals.
Joy Chen, cofounder, and CEO at Pure Culture Beauty, explained that customers often have trouble finding the right type of skincare. This ultra-personalized approach helps them find what’s right for them.
“There’s a lot of confusion with the consumer, in terms of how they get information about what’s best for their skin.… So we really believe that the only way to get at this is going to be customization,” Chen said. “Consumers today are demanding more. They’re demanding that they have something that’s right for them.”
Product recommendation quizzes are another way ecommerce beauty brands are personalizing their customer communications and offers.
In the absence of third-party cookies—Google Chrome is eliminating them by Q3 2024—beauty brands will need to find new ways of collecting customer data. Product recommendation quizzes are one way to find out personal information about consumers and then tailor your offering.
For example, direct-to-consumer (DTC) makeup brand Il Makiage has an online quiz that helps customers find the perfect foundation match.
From there, customers are able to shop recommended products and get a personalized foundation that perfectly fits their skin tone.
In an interview with Retail Brew, Michael Simoncic, managing director at Alvarez & Marsal Consumer Retail Group, explains that personalization should simplify customers’ shopping experiences.
“It is about knowing the customer’s preference and then tailoring the response,” he said. “It should be a seamless, frictionless experience.… Personalization efforts that require significant time and investment from customers don’t work.”
2. Brands will look to AI to innovate individual offerings
In 2024, we’ll also see more beauty brands increase their efforts to use artificial intelligence for personalization.
A core use of AI is helping online shoppers identify the right products for them without having to go into a physical store. Artificial intelligence can also be used to create unique formulas for individuals, pioneering individualization in beauty.
For example, skincare brand Proven uses AI to match products to people’s individual skin types and lifestyles. Ming Zhao, cofounder and CEO of Proven Skincare, launched the brand after struggling to identify products that were suited to her skin type.
With her cofounder, Dr. Amy Yuan, the pair first created the Skin Genome Project, an AI-powered beauty database. The Skin Genome Project analyzes data from 20,238 skincare ingredients, 100,000 products, 28 million testimonials, and 4,000 scientific publications. The brand also asks consumers to complete a short quiz about their skin concerns and lifestyle.
Using this data, Proven makes personalized skin care products based on nearly 50 factors, including an individual’s genes, routine, and the environment—for example, water hardness, UV index, and humidity.
Proven then adjusts individuals’ products every eight weeks, taking into account changing seasons, the skin’s tolerance to active ingredients, and lifestyle shifts. “The beauty industry is increasingly leveraging AI technology to offer personalized shopping experiences,” says Steve Pogson, founder of ecommerce agency First Pier.
“Beauty brands can integrate AI chatbots that guide customers through a personalized selection process, providing tailored product recommendations based on their specific skin concerns or makeup preferences. This significantly enhances the customer journey, making it more interactive and personal, which boosts customer satisfaction and loyalty.”
3. Loyalty programs continue to win over customers
Loyalty programs represent a huge opportunity for beauty brands to personalize their offering and retain more long-term customers. Pioneering beauty brand Sephora led the way with its ultra-personalized loyalty program, Beauty Insider, in 2007. But in 2024, consumers are still looking to purchase from brands that offer rewards.
Around the world, 70% of US consumers said they’re more likely to be loyal to a brand with a loyalty program. And 43.5% of consumers would sign up for the loyalty program of a brand they’re already loyal to.
A great example of a brand that successfully rewards loyal customers is 100% PURE. Their Purist Pro program for estheticians and makeup artists offers a 35% discount on most products and first access to new product launches, while the Purist Perks loyalty program includes seasonal savings, birthday gifts, free shipping, points based on customer spend, and more.
Simplicity is key to getting people to join. It’s easy to understand and sign up for, and customers don’t have to jump through hoops to get their rewards.
Taking it a step further, e.l.f. Cosmetics’ mobile app for their Beauty Squad program does this well, too. Their mobile app features receipt scanning for non-app purchases so members can receive rewards wherever they buy products.
4. Brands to innovate with AR & VR try-on filters
Just over half of US adults have either used or are interested in using augmented reality (AR) or virtual reality (VR) while shopping.
People often first interact with AR via social media filters or lenses they find on Instagram, Snapchat, Pinterest, or TikTok. Beauty retailers have plenty of opportunities to tap into this trend by using AR filters to demonstrate their products or allow customers to try them on virtually.
Snapchat is currently the most developed AR platform, but Instagram is a top contender. Pinterest’s AR tools are currently designed for beauty brands and TikTok is focusing on becoming the go-to place for creator-led AR.
Using AR during the social commerce shopping journey has the potential to improve the customer experience. Beauty brands like Supergoop and OPI, for example, are investing in Snapchat’s AR tools. Snap users can virtually “try on” Supergoop’s new lip colors as well as different OPI nail polish colors.
Beauty brands are leading the way for AR shopping on social media. Marketers can experiment with social AR tools to create their own filters, effects, lenses, or even 3D experiences on social media. These virtual experiences are what will help beauty brands stand out from the competition in the future.
“The game won’t be the same when you simply ask your voice assistant to buy the best mascara on the market for you. Or if you are able to watch a makeup tutorial directly on your face with a virtual try-on,” said Lubomira Rochet, L’Oréal’s global chief digital officer in a Think with Google interview. “The brands that master these experiences will be the ones people choose.”
5. Brands to partner with authentic influencers
Influencers continue to
For brands looking to partner with beauty influencers, audience size no longer stands as the only indication of success, according to Glossy’s Influencer Index.
Authentic was Merriam-Webster’s 2023 word of the year, and for good reason. According to Sprout Social’s 2023 Index, authenticity is one of the top things customers claim not to see enough of from brands.
This also ties in with beauty brands moving to be more inclusive and diverse in their campaigns. Instead of always picking photoshopped celebrity-endorsed images, consumers want to see images of real people they can relate to.
Beauty brand Glossier is worth $1.8 billion today—but before they became a household name, the brand used influencer marketing and Instagram to build a loyal audience. Whether they’re working with Olivia Rodrigo or an individual beauty creator with several thousand followers, CEO Emily Weiss credits the “regular women who promote their brand so devoutly that make Glossier so special and successful.”
