By 2026, the global health, beauty and personal care market is expected to reach $ 1.14 trillion in sales, according to a recent report from research and data specialist Edge Retail Insight, and a little more than 50% of this growth would come from electronic commerce. . Much of this online growth would come more specifically from online giants Amazon, Alibaba and JD.com, according to the research firm.
And Amazon had made clear its intention to grow in beauty, with the launch of a Belei own-brand skin care line in 2019 and a partnership with L’Oréal to launch the Modiface virtual fitting tool. So how important should this platform be to beauty brands in the future? And will she succeed in carving out a place for herself in beauty?
CosmeticsDesign-Europe caught up with Beth Mercer, online retail expert, e-commerce account manager at UK-based digital marketing agency Croud, to find out more.
“People are there whether you like it or not”
“Amazon has a business model that is very suited to fast-paced environments and people who want everything yesterday. And that’s how it goes ”,said Mercer.
For beauty brands, the platform’s success was down to the volume and scale in which Amazon operated, she said, with massive free next-day delivery services to consumers around the world. , a major advantage.
“The problem, or the beauty, of Amazon is that people are there whether you like it or not” she said, and beauty brands were starting to realize that this was a platform they needed a presence on.
Back on a “difficult start” in beauty and luxury
Amazon was now working hard to position its e-commerce platform as a “Renowned place for brands”and go ahead as “partner”, said Mercer. And that’s because the e-commerce major had a “A difficult start with beauty and luxury”,she says.
“There are a lot of different reasons for this, but a lot of them are giving up control – things like distribution, the loss of consumer data in terms of the walled garden that Amazon operates in, and things like profit margins itself, according to the business models that brands have put in place with Amazon.
“But also, more personally for brands, it’s things like the gray market that can be driven on Amazon because of the rights that everyone has to sell. So that can pave the way for fakes and things like samples. sold with an empty half tube and things like that. So there are a lot of different issues that brands have had, especially in this space, ” she says.
Amazon has since recognized these issues and has started creating barriers for brands large and small, she said, to better protect businesses. It had launched programs for premium beauty, professional beauty, and independent beauty, for example, which offered brand benefits, such as restricting third-party resellers under the premium program and offering a space. subcategory search to showcase independent brands under the independent beauty program.
“These types of programs really help brands by protecting them and giving them a kind of barrier against counterfeiting and the gray market areas that have been such a problem in the past,”said Mercer.
Amazon Live and better navigation to come
Importantly, she said that Amazon is also heavily focused on becoming an experience-driven platform with tools like Amazon Live, similar to home shopping or Instagram reels, giving brands the ability to post. . “Lively and rich content”.
He was also working hard to improve navigation skills, Mercer said, to go beyond just being good at “Very generic terms”.
Looking ahead, she said beauty brands need to look at what the “Amazonian ecosystem” could deliver as a whole with its end-to-end framework that included reach, volume, SEO analysis, algorithms and increasingly richer content.
For brands that are not yet on Amazon, she said a starting point would be to determine if anyone else is already selling the product on Amazon and, if so, what the content looked like; reflect the brand and tone of voice and have consumers responded positively? The next step would be “Take control”Of that presence, she said, and from there, conduct research to determine how to improve that presence and ultimately generate net sales.
Amazon was aiming “world domination”In the online retail space, Mercer said, and working hard to position itself as a space that worked just as well for luxury and beauty as it did for mass market essentials. The recently launched luxury “stores” in the United States are a good example, offering more “a brilliant and premium atmosphere that is completely out of the mindset of Amazon being a convenience store”,she says.
Mercer said Amazon should “To be definitely a goal”For beauty brands in the future, especially since the platform was moving so rapidly in space.