Table of Contents
Executive Summary
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- Top takeaways
- Market overview
- Outlook on total beauty retailing: decreased use and limited spending will cause declines
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- Figure 1: Total US retail sales and forecast of beauty products, at current prices, 2015-25
- Outlook on online beauty retailing: despite changing beauty needs, beauty has growth potential online
- Impact of COVID-19 on online beauty retailing
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- Figure 2: Short-, medium- and long-term impact of COVID-19 on online beauty retail, November 2020
- Opportunities and challenges
- Interest in shopping online is growing, but in-store remains the dominant channel
- Offering reassurance and flexibility will reduce hesitation and unlock purchase opportunities
- Consumers’ disrupted beauty routines, and value-seeking behavior will shift brand preferences
- Use social content to drive awareness and maintain engagement
The Market – Key Takeaways
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- Consumers are shifting purchases online, but beauty will still face growth challenges
- Consumers’ lifestyles have changed and so have their beauty needs
- Diverse representation in beauty is required to meet diverse needs
Market Size and Forecast
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- Total beauty retail will decline due to decreased use and limited spending
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- Figure 3: Total US retail sales and forecast of beauty products, at current prices, 2015-25
- Online shifts indicate opportunity for digital growth in beauty
- Macroeconomic data
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- Figure 4: Consumer confidence and unemployment, 2000-October 2020
- Impact of COVID-19 on online beauty retailing
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- Figure 5: Short-, medium- and long-term impact of COVID-19 on online beauty retail, November 2020
- Lockdown
- Re-emergence
- Recovery
- COVID-19: US context
- Learnings from the last recession
Market Factors
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- Cash-conscious shoppers will limit spending to the essentials
- Consumers demand diverse beauty options
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- Figure 6: Number of households, by race and Hispanic origin of householder, 2009 and 2019
- Technology enables consumers to shop safely and stay engaged
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- Figure 7: Sephora “brow styling: 101” tutorial, June 2020
- A clean and conscious focus for beauty shoppers
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- Figure 8: Ulta clean beauty discussion, October 2020
Market Opportunities
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- Consumers want to see themselves in beauty messaging
- Expand product offerings to meet consumers’ needs
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- Figure 9: LoveSeen “Find your fit” quiz, October 2020
- Make it personal with flexible options that add value
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- Figure 10: Prose customized product example, August 2020
- Add value through flexible shopping options
- Appeal to the conscious consumer through a focus on DEI
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- Figure 11: Thrive Causmetics charitable support, June 2020
- Social media is now a shopping hub
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- Figure 12: Various beauty brands on Instagram Checkout, October 2020
Competitive Strategies
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- Using technology to create safer shopping
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- Figure 13: Benefit brow try-on virtual tool, July 2020
- Video content and influencers appeal to younger generations
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- Figure 14: Brickell everyday skincare routine, January 2020
- Targeted innovation through gaming
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- Figure 15: MAC x The Sims partnership, June 2020
The Consumer – Key Takeaways
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- Most are shopping beauty online, but in-store is dominant
- Reassurances are needed to drive purchases and engagement
- Social media is a critical part of the online shopping experience
Consumer Trends Impacting Online Beauty
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- Technology
- Value
- Identity
- Rights
- Wellbeing
Shopping Method and Online Activity
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- In-store is the top shopping method, but most beauty consumers shop across channels
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- Figure 16: Shopping method, August 2020
- Most consumers begin and end their shopping in the same channel
- Social shopping/content gives younger generations the best of both worlds
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- Figure 17: Shopping method and online activity (NET) – by generation, August 2020
- Online is a destination for pre-purchase activity
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- Figure 18: Online activity, August 2020
Activity by Item
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- No matter the item, most purchases involve online activity
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- Figure 19: Activity by item, August 2020
- Reading reviews online factors in to all types of beauty purchases
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- Figure 20: Select activity by product, August 2020
- Online is a vehicle for product discovery
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- Figure 21: Beautyque NYC virtual store, September 2020
- Different ages experience different online journeys
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- Figure 22: Activity by item – select items, by age, August 2020
Purchase Considerations
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- Shoppers seek free reassurance before buying
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- Figure 23: Macy’s x DoorDash, October 2020
- Figure 24: Purchase considerations, August 2020
- Loyalty programs still appeal to women
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- Figure 25: Purchase considerations, by gender and age, August 2020
- Younger shoppers want to make it their own
- Convenience is a bigger consideration to Black consumers
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- Figure 26: Purchase considerations - NET, by race, August 2020
Brand Engagement
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- Accessible, affordable brands are piquing interest of young adults
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- Figure 27: Brand engagement - NET, August 2020
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- Figure 28: Select brand engagement - NET, by gender and age, August 2020
- Affluent young adults engage with digitally native, buzzy brands
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- Figure 29: Select brand engagement, by age and HHI, August 2020
- Hispanic beauty shoppers like to explore brands
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- Figure 30: Select brand engagement, by Hispanic origin, August 2020
Online Content
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- Shoppers value each other’s opinion
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- Figure 31: Online content, August 2020
- Interest in ingredients spans generations
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- Figure 32: Top claims in skincare, January-November 2020
- Figure 33: Online content, by generation, august 2020
- Young women want to know what to buy, and how to use it
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- Figure 34: Marc Jacobs Fragrances virtual party launch, August 2020
- Figure 35: Online content, by gender and age, August 2020
Preferred Resources and the Role of Social Media
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- Category experts are highly sought
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- Figure 36: Preferred online resources - NET, August 2020
- Social media is a catch-all resource
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- Figure 37: Social media use, August 2020
- Visual content completes the experience for younger generations
- Young women want to turn inspiration into reality
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- Figure 38: U Beauty shoppable Instagram content, October 2020
- Young men engage in video-based content
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- Figure 39: Jack Black Skincare – “evening routine” video, September 2020
- Hispanic shoppers trust input from peers/other shoppers
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- Figure 40: Preferred resources and social media use – by Hispanic origin, August 2020
Attitudes toward Beauty Online
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- Disinterest with shopping in-store benefits online shopping
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- Figure 41: Attitudes toward beauty online, August 2020
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- Figure 42: Kiehl’s virtual skincare expert example, April 2020
- Beauty consumers appreciate the adventure of shopping online
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- Figure 43: Attitudes toward beauty online, by gender and age, August 2020
- Conscious consumers expect a stance on social issues
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- Figure 44: Attitudes toward online shopping, by select demographics, August 2020
Desired Improvements
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- Reassurance drives engagement
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- Figure 45: Desired improvements, August 2020
- Younger beauty consumers want an evolved, personalized experience
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- Figure 46: Desired improvements, by age, August 2020
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Abbreviations and terms
- Abbreviations
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