In 2020, the UK cosmetics and toiletries e-commerce market surged 42% in value terms to €1.98bn (£1.7bn), up from €1.4bn (£1.2bn) in 2019, according to market research firm GlobalData. And this growth meant e-commerce now represented 14% of the cosmetics and toiletries UK market, making it the second-largest channel after hypermarkets and supermarkets that held a 30% value share.
“E-tailers have outpaced pharmacies and drugstores to take the second leading position,” said Nina Nowak, senior innovation researcher at GlobalData.
Speaking to CosmeticsDesign-Europe, Nowak said there had been “electric growth” in beauty and grooming e-commerce between 2019 and 2020 whilst market share in hypermarkets and supermarkets declined by 5.6% due to COVID-19 store closures and restrictions.
E-commerce beauty and grooming to hit €2.45bn in 2025
And GlobalData had forecast cosmetics and toiletries e-commerce growth to continue at a compound annual growth rate (CAGR) of 4.1% between 2021-2025 to hit €2.45bn (£2.1bn).
Whilst Nowak said this meant e-commerce growth would “stabilise” over the next five years, the perceived consumer benefits that drove the 2019-2020 surge would remain important for future growth and opportunities.
“Several factors contribute to consumers’ interest in online shopping,” she said. Findings from GlobalData’s Q1 global consumer survey showed 66% of consumers said convenience was the main advantage of shopping online; 64% said it was the time-saving aspect; 42% said it was about lower prices; and 41% said minimal social contact was the main advantage.
Another 41% said variety and choice available was the key plus to e-commerce; a factor that gained importance when looking specifically at beauty and grooming where e-commerce tools that allowed customised shopping experiences had fast-advanced, Nowak said.
“…The advanced digital tools and apps that allow personalised product choice based on a ‘selfie’ image provided by a consumer are efficiently replacing an in-store experience,” she said.
Beauty boost – D2C or multi-brand online platforms?
Asked what area of UK e-commerce would prove most plentiful for beauty and grooming brands moving forward – direct-to-consumer sites or multi-brand platforms – Nowak said: “As the e-commerce landscape evolves, it is important for beauty brands not to rely exclusively on either multi-brand platforms or D2C sites, as these channels serve different consumer groups and preferences.”
Presence on a multi-brand platform, she said, was “vital in broadening the brand’s reach” because these sites catered to consumers seeking a wide choice and those who enjoyed browsing and trying new products. At the same time, she said D2C “could prove crucial in maintaining a loyal consumer base” because these sites enabled tailored offerings, promotions and high-level personalisation amongst established or repeat customers.
Gen Z and millennials, for example, were most likely to admit typically purchasing beauty and grooming products online, with 22% claiming to buy these directly from brands, she said.
Omnichannel focus the future for beauty and grooming
Nowak said what would be key for beauty and grooming brands and future growth in e-commerce was balance and a multichannel strategy. And emerging partnerships between the likes of Sephora and Zalando and The Hut Group and Cult Beauty proved this, she said. “Such deals showcase the growing importance of omnichannel beauty shopping which should be at the centre of attention of brands striving to broaden their reach online.”
Whilst hypermarkets and supermarkets would likely remain the number-one channel for beauty and grooming shopping in the UK for some time – still around double the size of e-commerce in value terms and important because of accessibility and convenience – Nowak said there was good scope for e-tailers to compete and push beauty expertise and personalisation.
“E-commerce players can reinforce their place in beauty by positioning themselves as an ‘industry expert’ with additional services such as consultations or ‘beauty regimen finders’ that provide a touch of personalisation and premium experience,” she said.
“…Extended lockdowns and social distancing restrictions have triggered a permanent shift towards e-commerce across various categories, including beauty and grooming. This change should be an impulse for personal care brands to focus their strategy toward enhancing their online presence, with brand and retailer deals at the centre, as well as providing a tailored shopping experience for consumers.”
