Online beauty sales may have been the segment’s fastest growing channel last year, up 14 per cent on 2017 according to Euromonitor, but competition is heating up for e-commerce.
First up challenging beauty e-tail sites, is the resurgence of physical retail.
“The real competition is coming from brick-and-mortar stores, they’ve really updated the consumer experience to play on the senses and make the shopping processes more enjoyable,” said Mintel senior beauty analyst, Alex Fisher.
“Pop-up locations, in-store treatments, special events, etc., especially appeal to young shoppers, who can upload fun images of these experiences to their social media.”
Beauty brands born online are changing the e-commerce game, too. “The ability to purchase products directly through platforms like Instagram has made it easier than ever for brands to cut retailers out of the shopper journey,” said Fisher.
“Direct selling in this form is the future of online retail, while those brands wanting to increase their reach will look to department stores, where they can offer the consumer some form of unique experience or in-store theater.”
Influencers are another phenomenon reshaping the digital landscape, according Ecommerce Foundation senior research analyst and coordinator, Sara Lone.
“The new marketing strategy using influencers and online marketing is making it significantly easier for consumers to click a link to the actual brand web shop, such as Sephora, leaving websites like Feelunique and Cult Beauty struggling to find shoppers,” said Lone.
Digital sellers Cult Beauty and Feelunique were also up for sale recently but have failed to find buyers.
Sources said Cult Beauty went out on the market with a banker, who has since been let go. Feelunique is no longer being shopped around after bids fell short of the asking price, according to reports. Adding to changes, the site’s chief executive officer, Joël Palix, is stepping down after helming the company for five years.
Though there are challenges facing the e-commerce platform, pure-players have the opportunity to continue to develop the beauty space, if they play their cards right.
“A number of online-only beauty retailers have started to use their shopper data in clever ways, creating additional content like blog articles or trend predictions based on what their shoppers are buying,” said Fisher.
“Cult Beauty and Feelunique have taken great strides here, and could use this alongside customer reviews to become a really credible source of beauty information for the masses. If they really make the most of this, we could see e-tailers becoming the new influencers.”
