With the holiday season swiftly approaching, Amazon is ramping up for yet another massive cyber event.
This time, though, its sole focus is exclusively on the cosmetic and beauty product industry.
This event, which they’ve dubbed the “Holiday Haul,” isn’t the only way that this ecommerce behemoth is tapping into the beauty industry.
Amazon has been leering at the beauty product sector for several years now — to little avail. Are things finally looking up?
The Transition of Beauty Shopping From In-Store Retail To Online
Amazon has never been one to shy away from expanding into new markets. Surprisingly, though, their ventures have not always been well-received, specifically by the beauty community.
But it seems that now is the time that the world’s largest online retailer and the world’s fastest-growing market are putting aside their differences.
So, what changed? The answer should be glaringly obvious.
Before COVID-19 hit, nearly 85% of all beauty product shopping in the US took place in brick-and-mortar retail stores.
But as the pandemic rendered all beauty consumers homebound, a new challenge arose for both customers and beauty brands alike. Approximately 30% of the beauty industry market was shut down.
With no other recourse, the beauty community’s ever-rising demand shifted its course towards online shopping. However, it was soon apparent that the beauty products industry was way over its head.
It was only a matter of time before the industry had to cut its losses and turn to larger ecommerce platforms, preferably one that was already showing some promising results.
How The Beauty Industry Will Benefit From Amazon
On the frontlines, Amazon’s most formidable competition included Ulta and Sephora, among others. The industry’s top beauty retailers and brands alike had multiple advantages over Amazon, such as exclusive partnerships.
Similarly, small-scale and indie brands were faring well, according to Forbes.
But Amazon had the only trump card that actually mattered at the end of the day: digital stores.
While many beauty retailers, such as Sephora and Ulta, had their own online platforms, the burden on these online platforms was suddenly too much.
Similarly, if small-scale and indie beauty brands wanted to ride their wave of success, they needed to up their distribution game. Indeed, consumers and small beauty product businesses would gain significant traction leveraging Amazon’s platform.
Now, this unprecedented shift to online shopping revealed that many beauty retailers were simply underprepared for handling this sudden surge in digital demand. Instead, they had become comfortable with a majority of their consumers visiting their in-person outlets.
Soon, the loss in profit became overwhelming.
On the other hand, the already-established ecommerce retail giant, Amazon, was more than prepared. In terms of logistics, warehousing, shipping resources, and online marketing scope, Amazon was a clear winner.
The Beauty Products Sector Is Still Booming
With everything said and done, the beauty industry still stood resilient in the face of lockdowns, store shutdowns, and profit loss.
As of 2020, the beauty products industry’s worth comes up to a whopping $511 Billion.
What’s more, even before the pandemic hit, the beauty industry was already expanding into the online landscape. The shift in the beauty shopping landscape, however, has kicked this transition into high gear.
Once initially unwelcoming of Amazon trespassing onto their turf, the beauty industry is now swiftly changing its attitude.
And as luck would have it, Amazon is responding in kind.
How Amazon Is Tapping Into The Beauty Community
Amazon had been eyeing the beauty industry market long before the pandemic. In order to infiltrate the beauty community — both consumers and brands — it had to establish itself as a serious contender.
Initial attempts were sporadic. Perhaps the most memorable was the launch of amazon’s beauty and clean skincare line Belei.
But the ecommerce behemoth has barely even scratched the surface.
According to Rina Yashayeva, Vice President of marketplace strategy at Stella Rising, Amazon currently captures 32 percent of all beauty bought online. That’s nearly one-third!
Of course, this number is only bound to increase. Without even trying, the value of skincare products sold on Amazon rose by 8% immediately following the pandemic. Now, imagine what would happen if Amazon really puts its back into it.
Here are some of the ways that Amazon is already tapping into the beauty industry.
Creating Brand Awareness
In 2020, Amazon’s mega-live streaming event drew hundreds of streamers, celebrities, customers, and influencers. Additionally, the 11-hour event also offered more than 70 special offers on different beauty products.
But apart from these grand events, Amazon Live has completely changed the way that beauty brands and consumers interact. Beauty brands take to the platform to promote their products through a video, and the products mentioned are easily accessible within the platform.
Believe it or not, such live streams have garnered hundreds of thousands of views per brand.
Hence, Amazon Live is also a unique opportunity for both mainstream and Indie brands to reach more shoppers and new customers.
Integration of Tech
Beauty brands and consumers have enjoyed Amazon’s efforts to marry technology and beauty.
With the closure of physical retail stores, Amazon allowed its consumers to replicate the in-person shopping experience.
L’oreal’s ModiFace, for example, allows customers to “try on” makeup through their front cameras. Recently, Amazon extended this AI experience to its beauty consumers in Canada.
Similarly, Amazon has made its own headway into the AR-powered beauty prospective with the launch of Amazon Salon in 2021. Based in London’s hip Spitalfields district, the salon features the latest industry technology, from augmented reality hair consultations to point-and-learn technology.
Holiday Beauty Haul
Amazon plans to hold a Holiday Beauty Haul for the entire month of October. The purpose of this beauty haul is “to draw customers back to Amazon during Black Friday week but also long term with additional marketing levers.”
The October 2021 Prime Day sale generated $11 Billion in profit, and this month’s event is already chartered for success. This month-long event focuses on the beauty industry and will feature special discounts on a vast array of beauty products.
Conclusion
While mass beauty has been around since Amazon’s inception, only the recent years have seen a more focused effort by Amazon to tap into the beauty industry.
In terms of what the future looks like for this unlikely alliance, both Amazon and the beauty industry are facing favorable prospects.
By itself, the beauty community is expected to reach a market value of $805.61 Billion, and you can bet that Amazon wants in, too. Third-party Amazon FBA sellers have also been gravitating toward selling more beauty products and entering the cosmetics market.
