Beauty is now an integral part of the business of beauty, according to A.T. Kearney’s new study, “Beauty and the E-Commerce Beast: 2014 Edition.” Online customer engagement is riding high in the area of beauty and personal care shoppers.
With sales of $4.3 billion and growing, online sales in beauty and personal care represent 6.5% of total sector sales. The study found that beauty categories such as skin care have above average e-commerce penetration compared to personal care products such as bath or hair care.
According to the study, prestige beauty and personal care products have higher online shopper penetration (11%) mass products (6%).
Amazon is dominant with 73% of online beauty and personal care shoppers followed by Walmart (42%), and Sephora (35%).
What’s more, 47% of survey respondents said they purchased more beauty and personal care products online this year compared to last year, including a significant increase in shopping for more “experiential products” such as fragrance and color cosmetics.
Hana Ben-Shabat, A.T. Kearney partner and co-author of the study, said in the report that it’s no longer sufficient for beauty and personal care brands and retailers to invest in digital.
“Winning companies are those that are executing against a deliberate short- and long-term e-commerce strategy,” she said. “Collaboration between manufacturers and retailers in the quest for engaging today’s online consumer is more important than ever before.”
The study shows that 50% of respondents are defined as “creatures of habit”–those who purchase online to replenish items they are familiar with. This type of shopping behavior gave rise to a variety of “replenishment programs” offered by some online retailers. Nearly 40% of respondents indicated they had subscribed at least once for such a program. Convenience and the ability to incorporate beauty and personal care products with a larger aggregated basket of household goods on a periodic basis were cited as the main reasons for the adoption.
Kosha Gada, A.T. Kearney principal and co-author of the study said the store remains the main channel for beauty and personal care.
“But the role of the store is shifting from a transactional platform to an experiential one, and increasingly, every consumer that walks through the door is doing so armed with product information and opinions to a degree unlike ever before,” Gada said. “This requires brands to rethink elements such as shelf planograms, retail staffing, and integration between online and in-store experiences.”