Study: Online is becoming important path to purchase in beauty
NEW YORK — E-commerce is now an integral part of the beauty business as nearly half of consumers buy more beauty and personal care items online this year compared with last year, according to A.T. Kearney’s new Beauty and the E-Commerce Beast: 2014 Edition study.
“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. 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 makeup online, versus habitually used products that they simply replenish,” stated Hana Ben-Shabat, A.T. Kearney partner and coauthor of the study.
According to the findings, 47% of the survey participants stated that they purchase more beauty and personal care products online this year compared with last year, including a significant increase in shopping for more “experiential products,” such as fragrance and color cosmetics (both saw a 16% increase over 2012 in the number of people who frequently purchase these items online).
At sales of $4.3 billion and growing, online sales in beauty and personal care represents 6.5% of total sector sales. The study found that beauty categories, such as skin care, have above average e-commerce penetration compared with 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.
“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. 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,” stated Kosha Gada, A.T. Kearney principal and coauthor of the study.
Added Hana Ben-Shabat, “It’s 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.”
In addition to the analysis of the survey data, the study also provides a segmentation analysis of online beauty and personal care shoppers, of which 50% 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.
A resounding 38% of the survey participants reported having 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.
This A.T. Kearney study of e-commerce in beauty and personal care was conducted in 2014. It is based on an online survey of 1,022 consumers’ answers to questions about their shopping behaviors, motivations, favorite attributes and preferred online shopping destinations. Eighty-seven percent of respondents, or 885, identified themselves as online shoppers. Of those 885 shoppers, 63% made at least one purchase of a beauty and personal care product online in the past 12 months.