Management consulting firm A.T. Kearney released the results of its study ‘Beauty and the E-Commerce Beast: 2014 Edition,’ that lays out the results of a consumer survey of online Beauty and Personal Care shoppers.
The research found that Beauty and Personal Care, an industry traditionally rooted in the ability to touch, smell, sample and experiment with products in stores is being played by a new set of rules.
A.T. Kearney says that while the results of the study are encouraging for some and may be threatening for others, e-commerce is now an integral part of the business of beauty.
“Beauty online is so much more than just a transaction. It’s in fact one of the most active categories on the internet. So online is becoming one of the most important paths to purchase,” says Hana Ben-Shabat, A.T. Kearney partner and co-author of the study.
“And those who buy beauty products online, make frequent purchases. For example, what we’re seeing in this year’s study is that there is an increased willingness on the part of consumers, to buy fragrances and make-up online, versus habitually used products that they simply replenish.”
She adds that it is no longer sufficient for Beauty and Personal Care brands and retailers to invest experimentally in digital.
“Winning companies are those that can figure out how to make the link between online and offline, digital and physical. And collaboration between manufacturers and retailers in the quest for engaging today’s online consumer is more important than ever before.”
E-commerce penetration
According to the study, online sales in Beauty and Personal Care stand at $4.3 billion which represents 6.5% of total sector sales.
“As e-commerce penetration is still only an estimated 6.5% of the total category today, the store remains the main channel for Beauty and Personal Care,” says Kosha Gada, A.T. Kearney principal and co-author of the study.
“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. This requires brands to rethink elements such as shelf planograms, retail staffing, and integration between online and in-store experiences.”
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.
A large difference in penetration also exists between prestige cosmetics and mass products where penetration is estimated at 11% and 6% respectively.