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1、RXSBC23RPBeauty&CosmeticsRetailXIn partnership with:2023499|July 2023Global beauty Sector report 2023|INtroDuctIoN aND coNteNtS3|RetailX|July 2023 RXSBC23RP 2023 IntroductionThis report examines the beauty&cosmetics sector,the extent to which consumers are shopping online around the world,developmen
2、ts over the last year and the trends that will continue to drive ecommerce forward.Some of the developments are echoed across the retail industry globally while others are specific to different regions or market segments.For instance,it is interesting to see the differences between how products are
3、merchandised in China compared to Europe and the North American market.Also the extent to which mobile is being adopted increasingly as the channel of choice for consumers who shop for beauty&cosmetics online.In this report,the RetailX researchers have combined charts and insight to bring the story
4、of this sector to life.Data is backed up with retail examples to showcase those companies that are investing in digital channels and omnichannel services.Innovations are also highlighted to show potential new directions for the beauty&cosmetics sector.Company profiles also show ways in which retaile
5、rs are engaging with consumers and how leading players are changing the industry.Amorepacific,Charlotte Tilbury,Douglas,LOccitane,LOral and Sephora all feature in these profiles.Ian Jindal,CEO,RetailXRetailers are increasingly turning to ChatGPT and other tools powered by artificial intelligencePage
6、16Company profiles showcase Amorepacific,Charlotte Tilbury,Douglas,LOccitane,LOral and SephoraPage26Ecommerce growth has declined but sales online are higher than pre-pandemic yearsPage08FeaturedRetailX SupergreatRetailXContentsIntroduction 3Figures 4Market context 5Regional variations 8Consumer beh
7、aviour 14Digital channels 16Social media 21Key players:The largest 100 25Company profile:Amorepacific 26Company profile:Charlotte Tilbury 27Company profile:Douglas 28Company profile:LOccitane 29Company profile:LOral 30Company profile:Sephora 31Next steps 32Conclusion 344|RetailX|July 2023 RXSBC23RP
8、2023 Global beauty Sector report 2023|FIGureSInflation rate,by region,2020-2023 5Beauty,health,personal and household care ecommerce revenue(bn USD),2017-2022 5Beauty care ecommerce revenue(bn USD),2018-2022 6Annual change in beauty care ecommerce revenue(%),by category,2018-2022 6Average spend of t
9、he beauty,health,personal and household care e-shopper(USD),by category,2018-2022 7Average spend of the beauty care e-shopper(USD),by segment,2018-2022 7Beauty care ecommerce revenue(bn USD),by region,2018-2022 8Annual change in beauty care ecommerce revenue(%),by region,2018-2022 9Shopping channel
10、share by revenue for beauty care multichannel shoppers(%),by region,2022 10Device usage share by revenue for beauty care online shopping(%),by region,2022 11Monthly online spend,cosmetics e-shoppers(%),2022 14Frequency of online purchase,cosmetics e-shoppers(%),2022 14Frequency of advertisements lea
11、ding to purchase,cosmetics e-shoppers(%),2022 15Other goods purchased online by cosmetics e-shoppers(%),2022 15Shopping channel share by revenue for beauty care multichannel shoppers(%),2018-2022 17Device usage share by revenue for beauty care online shopping(%),2018-2022 19Likelihood of influencer
12、recommendations leading to purchase,cosmetics e-shoppers(%),2022 21Channels for product discovery,difference between cosmetics and general e-shoppers(%),2022 21Share of online consumers buying from social networks,selected countries,2022 22Countries with the highest and lowest percentage of consumer
13、s intending to shop more through social commerce,2022 22Global beauty&pharmacy the largest 100 25Annual revenue growth of Amorepacific Corp(%),2020-2022 26Annual growth of web traffic to Amorepacific(%),2018-2022 26Annual growth of web traffic to Charlotte Tilbury(%),2019-2022 27Annual growth of web
14、 traffic to Douglas(%),2018-2022 28Annual revenue growth of LOccitane International SA(%),2021-2022 29Annual growth of web traffic to LOccitane(%),2018-2022 29Annual revenue growth of LOral SA(%),2020-2022 30Annual growth of web traffic to LOral Paris(%),2018-2022 30Annual growth of web traffic to S
15、ephora(%),2019-2022 31Figures5|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|MarKet coNteXtA changing marketThe global beauty&cosmetics market continues to grow despite geopolitical and socio-economic challengesThe beauty&cosmetics market is significant,encompassing skincare and
16、all areas of colour cosmetics.While not as large as the personal care sector,which includes products such as toothpaste and deodorants,the two sectors are closely linked and often sit side-by-side as divisions within the larger corporations.For example,brands under the Unilever umbrella include Dove
17、 skincare and Sunsilk haircare.The same is true among retailers where beauty often sits alongside hair products andhealthcare.Ideas of beauty have changed over the years but colour cosmetics have continued to play an important part in showing peoples identity throughout history.They provide a way to
18、 show membership or affiliation with a group,be that culturally or because of fashion,as well as giving a way to show individualism and creativity.These factors remain just as important today.MarKet GroWtHIn recent times,the market has been averaging between 4%and 5%growth a year,except in 2020 when
19、 the pandemic reduced many of the going out occasions,as well as restricting the travel sector which is an important part of the business for some brands.Today,the sector is as important Inflation rate,by region,2020-2023Beauty,health,personal and household care ecommerce revenue(bn USD),2017-20226|
20、RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|MarKet coNteXtas ever to consumers and the celebrities that play a part in the market endorsing products as brand ambassadors and models and in their reach on social mediaplatforms.The sector also provides a place for brands not norma
21、lly associated with the beauty industry to extend their profile through launching products such as fragrances.While consumer tastes around the world alter in the level and type of scent used in fragrances,the names,brands and celebrities on the bottles and packaging are known globally.With factors s
22、uch as changing fashions,a thirst for something new or the next big launch,the rise and fall of celebrity and brands and different niches and personalised products the beauty&cosmetics market continues to alter and expand.An increasing number of people joining the middle classes has led to more cons
23、umers purchasing in this sector as well,as they are able to buy beyond the basics of food and housing.LOral forecasts there will be 800 million more people in the middle classes by 2030.There are other factors impacting consumer behaviour in this sector and these will be covered in depth in a sectio
24、n later on in this report.oNlINeOnline is a smaller part of the overall market,but a significant portion.Around 30%of all sales are made online.While this has declined in the last year as people have returned to shopping in bricks-and-mortar stores post-pandemic,the beauty sector hasnt been affected
25、 as much as some product categories which have seen online growth decline to a greater degree in the last year.Beauty care ecommerce revenue(bn USD),2018-2022Annual change in beauty care ecommerce revenue(%),by category,2018-20227|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|Mar
26、Ket coNteXtIn fact,all areas of the beauty industry are seeing growth through online channels,with sales remaining significantly above 2019s level.In 2019,online sales accounted for 22%of the total market.In 2022,this figure was at 31%having dropped from 2021s peak of 33%.This indicates that the con
27、sumer switch to buying online seen during the pandemic is leading tomore permanent changes in spending patterns.However,with China only reopening in late 2022 andsome reticence from consumers in other countries remaining,it is an area to watch closely.Sales figures from brands and retailers over thi
28、s coming financial year will give a better indication as to the longer term trends.What is apparent is that changes made by the beauty industry are sticking,with many of the techniques implemented to help consumers gain more of an instore experience online remaining key techniques in 2023.Global eco
29、NoMyInflation and the cost of living crisis have caused worries for consumers,reducing the level of disposable income as energy and food prices rose throughout 2022.Some regions,and individual countries,have been hit harder than others.As a continent,Africa has seen the highest rate of inflation and
30、 rather than dropping in 2023 as other regions have done,inflation continues to rise.In 2023,it has reached 15.5%.Inflation in Zimbabwe,as an example,is at almost 100%.Governments around the world are being urged to either raise taxes or cut public spending in a bid to curb consumer spending and red
31、uce inflation.11 spend of the beauty,health,personal and household care e-shopper(USD),by category,2018-2022Average spend of the beauty care e-shopper(USD),by segment,2018-20228|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|reGIoNSRegional variationsRetailers are capturing opport
32、unities online and off as they look for growth across bordersAsia is the largest market for the beauty&cosmetics sector online but,while it remained dynamic in 2022,restrictions in China due to coronavirus resulted in more challenging trading conditions.Consumer spending bounced back in early 2023 f
33、ollowing the lifting of Chinas zero Covid policy.However,consumer spending has since slowed again and initial GDP projections for the year have been reduced.S&P expects China to log 5.2%GDP growth in 2023.1“From February 2023,Chinese consumer demand for beauty resumed,as did footfall in bricks-and-m
34、ortar stores,”says LOral in its financial results for the first quarter of the year.The gradual resumption of travel also resulted in more tourists buying duty free in Hainan,Macau and Hong Kong,the company said.Hong Kongs AS Watson Group continued its expansion of bricks-and-mortar stores in the re
35、gion throughout the years of the pandemic.Its Watsons health and beauty stores have opened in more than 1,400 locations since 2019.“The pandemic has been very challenging for us and retailers around the world,”says Dominic Lai,Group Managing Director of AS Watson Group.“The passion and dedication in
36、 our 130,000 employees around the world to continue to care for our customers made a difference to enable us to weather the storm and transform the crisis into opportunities,”he added.On opening the retailers 700th store in Malaysia,Laisaid that the companys omnichannel strategy has made the brand m
37、ore relevant to customer needs.It has also boosted membership of its loyalty scheme by 1.5 million people since before the pandemic.In 2019,membership stood at 5.7 million.Watsons Malaysia is also recording“high double-digit sales growth,”with the country being one of its fastest growing markets in
38、Asia.tHe INFlueNce oF GeNZAsia requires a unique market proposition,with shoppers expecting different experiences to consumers in other parts of the world.This is mainly driven by the higher levels of mobile and social commerce.This is particularly true in China where GenZ account for the largest gr
39、oup of consumers although due to age and purchasing power are not yet the highest spenders.This group of shoppers actively seeks out new experiences and is happy to try new products or be attracted by something novel.These consumers are also very conscious of their self identify as well as the envir
40、onment.In fact,environmental sustainability is crucial when purchasing beauty products,according to 91%of GenZ respondents to a survey by Daxue Consulting.These two factors alone are important enough for marketers to be conscious of when trying to attract this increasingly important group ofconsumer
41、s.GenZ is also very health conscious.More than half of the health-related products sold by ecommerce giant JD.com are bought by Chinas GenZ,according to the company.Overall,the 233 million teens and young people in their early 20s that make up GenZ in China account for 11%of consumer spending while
42、also influencing overall householdspending.Beauty care ecommerce revenue(bn USD),by region,2018-20229|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|reGIoNSAll of these factors are leading to a market in which messaging is increasingly based around product health benefits and ingr
43、edients.Where Western brands would have been the go-to in recent years and seen as more trustworthy or premium,Chinese brands are now gaining traction.The spending power of GenZ is only set to increase as more of this generation enters the workspace and their level of disposable income rises.Current
44、ly,many of their purchases are paid for using instalments rather than being paid for outright.cHINaMillennials are the biggest purchasers of beauty&cosmetics in China.This age group accounts for 31%of beauty sales in the country,according to DaxueConsulting.2As with other countries,Chinese consumers
45、 turned to the internet for shopping during the pandemic and the same was true during 2022s restrictions.However,trading conditions for some brands remained tough even into the first part of 2023.LOral called China a“challenging market”for consumer products while its luxury division saw a“drastic sl
46、owdown”of the Chinese market in 2022,according to the groups full year financial results.Its Consumer Products division“accelerated its market share gains in the fourth quarter”while the group reported a double-digit increase in online sales.As well as affecting how consumers shopped,the pandemic al
47、so influenced what consumers bought.Skincare and items that claimed restorative,health or wellbeing benefits saw sales increase.The top five beauty categories on Douyin in August 2022 were facial masks,skincare sets,serums,lotions and electronic beauty devices.Lipstick declined in popularity,with 27
48、.5%of consumers who normally buy beauty products saying they didnt wear lipstick at all during the second half of 2022 due to having to wear a mask.Consumers spent more time and money on eyeshadow instead.It is understandable therefore that beauty brands increased their marketing spend during the 11
49、.11 shopping festival in 2022.Overall,Chinese consumers spent$80 billion on beauty&personal care in 2021 both online and off,with sales increasing by 10%over the previous year.The market is predicted to grow by above 5%each year until 2027.One area,in particular,that has been seeing sales increasing
50、 at a faster rate than the global average is male beauty.Chinas male beauty market reached$1.44 billion in sales in 2021.cHINaS rISING local braNDSLocal insight and high marketing spend are helping beauty&cosmetics brands founded in China gain trust with Chinese consumers and increase market share a
51、gainst global brands.They are making high quality products that cater specifically for consumers in China and selling them at prices that are affordable for mass market.Proya and Winona were among the ten top selling brands in the 11.11 shopping festival in 2022,while Florasis and Timage were among
52、the leaders in colour cosmetics.In fact,Florasis ranks second highest for sales only behind MAC Cosmetics.cHINa luXury MarKetChina is also a major market for the luxury sector and this part of the beauty&cosmetics market is dominated by international brands.LOral is leading the market with a 30%mark
53、et share in 2022,according to the company.Este Lauder and LVMH also hold significant positions in the market.Annual change in beauty care ecommerce revenue(%),by region,|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|reGIoNSLOrals acquisition of Australian luxury brand
54、Asop is one of the ways that the company will be looking to strengthen its presence in the luxury market inChina.In 2022,disposable incomes in China grew by 2.9%year-on-year and,as such,more consumers moved up to buying what are seen as the better quality products of the luxury brands.NortH aMerIcaT
55、he US is the largest market for the beauty&personal care sector with sales in 2022 reaching above$87 billion overall.In comparison,Chinas sales reached$55.3 billion.Where the two differ is in the level of online sales;China outpaces the US in sales via digital channels and the extent to which sales
56、are made on mobile devices.Mobile commerce in the Americas accounts for 49%of online sales compared to almost 80%in Asia.The US is the second largest beauty&cosmetics market online.Sales reached$11.7bn in 2022 having seen revenue jump from$6.4bn in pre-pandemic 2019.Sales online in 2021 reached$10.5
57、4bn highlighting how consumers are not buying beauty&cosmetics online to the same extent they did the previous year,although sales have not dropped off completely as shoppers return to buying in bricks-and-mortar stores.The online market is predicted to continue growing at one percentage point a yea
58、r through to 2026.By then,Coresight Research predicts online will make up a third of the US beautymarket.The largest share of the US market is held by Amazon and the brands that use it as a platform for selling.Christmas is a key part of the trading year with cross-brand beauty boxes and special pac
59、kages tested and sold by brands on the platform.Amazon says that beauty was one of its best performing categories over the 2022 holiday period.Amazon Prime Day is a major sales event for brands on Amazon as well.For example,Laneige became one of the top selling beauty&personal care brands on Amazon
60、Prime Day 2022 in the US,a move that the company called“a new milestone”.Its Lip Sleeping Mask and Lip Glowy Balm ranked as number one and three best selling products.“The impressive performance we made during this years Amazon Prime Day is the direct result of our efforts in expanding our interacti
61、ons with customers through a 360 degree omnichannel strategy and marketing communications,combined with the superior quality and innovation of our best-selling products in the North American market,”said Shopping channel share by revenue for beauty care multichannel shoppers(%),by region,2022High qu
62、ality products from chinas domestic brands are gaining market share Florasis11|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|reGIoNSRobinNa,President&General Manager in North America of the brands parent company Amorepacific.Amazons share of the beauty and cosmetics market is alm
63、ost three times higher than specialist retailer Ulta Beauty,although the Illinois-based omnichannel retailer is growing its share of the domestic market.Ulta Beautys sales in the first three months of 2023 were$2.6 billion,an increase of 12.3%compared to the same period of 2022.The company operates
64、1,359 bricks-and-mortar stores as well as online,offering consumers around 25,000 products from more than 600 brands.“The year is off to a positive start as the Ulta Beauty team delivered revenue,operating margin,and diluted EPS consistent with our internal expectations,”said Dave Kimell,CEO,Ulta Be
65、auty.“Store traffic remained healthy,member growth showed continued strength,we delivered growth across key categories,and we strengthened engagement with the Ulta Beauty brand,”he added.Sephora holds almost a similar share as Ulta Beauty,with company performance in the first quarter of 2023 called“
66、exceptional,”by parent company LVMH.“Momentum was particularly strong in North America,”it says.uS luXury MarKetConsumers in North America are predicted to increase their spending on luxury cosmetics over the ten years to 2033,making the region the largest for this sector globally,according to Futur
67、e Market Insights.Skincare will retain the largest share of consumer spend on luxury beauty worldwide.Innovative technologies and AI-powered mobile apps are expected to drive growth in the luxury sector in North America,combined with commitments being made by key companies to redefine luxury cosmeti
68、cs through innovative formulae,cutting-edge performance and appealing packaging,the insights company says.Among the luxury cosmetics companies,Charlotte Tilbury had a particularly strong year in the US.Parent company Puig reported growth of 56%in 2022 across its entire portfolio in North America,boo
69、sted mainly by Charlotte Tilbury and sales of prestige fragrances.36%of the companys sales are made in the Americas,and the US is the companys largest market within that region.Other brands under the Puig umbrella also saw positive results in 2022.Carolina Herrera achieved its best results since the
70、 launch of its makeup line in 2020 and Byredo,the luxury Swedish brand,had a“very positive year”,reinforced by the launch of a series of new iconic products.In 2022 Dries Van Noten made its first inroads into this category with a collection of 30 shades of lipstick in refillable containers,the compa
71、ny reports.europeGermany,France and the UK are the three largest beauty&personal care markets in Europe.Consumers spend an average of$60 each on beauty products each year,less than their counterparts in Australia&Oceania,who spend almost$100 each,and consumers in the Americas who each spend almost$1
72、 more annually.The UK sees a larger share of consumers who shop online buying beauty&cosmetics products online than in the other key European markets.30%of people who shop online in the UK buy in this category.This compares to 26%in Germany,which is a larger market by revenue.Overall,in Europe,ecomm
73、erce accounts for 35%of consumer spend in this product category.47%of that spend is made Device usage share by revenue for beauty care online shopping(%),by region,202212|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|reGIoNSusing a mobile device,such as a smartphone,rather than t
74、he consumer shopping from a desktop device.However,the amount that individual consumers are spending on beauty&cosmetics online in Europe did decline in 2022,as did the value of the overall ecommerce market.The average spend dropped from almost$70,while the overall revenue figure for the market decl
75、ined almost 6%year-on-year.In 2021,ecommerce revenue grew by 17.6%.This follows the 26%increase in online revenue reported by the beauty&cosmetics sector in 2020 as shoppers moved online during the first wave ofcoronavirus.tHe uK MarKetIn the UK,health&beauty companies,which saw almost 40%growth onl
76、ine in 2020,saw sales drop by 10.7%,according the UK ecommerce association IMRG.Growth has been hampered,not just because people have returned to shopping in bricks-and-mortar stores post-pandemic,but also because supply chain and inflationary issues have raised other challenges forretailers.In 2022
77、,consumers were spending more at the checkout,according to IMRG,with average basket values higher than in 2021,but overall conversion rates have been lower.Nervousness around intermittent postal strikes andretailers ability to deliver online orders around the time of the 2022 Christmas shopping seas
78、on was also a prohibiting factor for pureplay retailers in the UK.Sales dropped off for all beauty retailers in the UK at that crucial time but less so for multichannel retailers that could rely on their click and collect services to reassure customers about delivery in time for Christmas.All of the
79、se factors could be why health&beauty brands and retailers in the UK on the whole launched Black Friday sales much earlier than retailers selling in other categories.For example,Boots commenced its Black Friday sale on 1 November.Over the eight days of the Black Friday shopping festival,sales in thi
80、s sector increased by 3.8%year-on-year.This is among the health&beauty companies that report sales figures to IMRG.Overall,2022 was not all doom and gloom in the UK market.Although the beauty sector saw revenues decline online,there was an increase during the Black Friday period,as well as a sharp i
81、ncrease in sales of colour cosmetics online over the holiday season itself.Sales also spiked in early November across budget,mass market and,in particular,premium beauty&cosmetics categories.Fashion brand H&M opened its first bricks-and-mortar beauty store in Norway H&M Beauty13|RetailX|July 2023 RX
82、SBC23RP 2023 Global beauty Sector report 2023|reGIoNStMall lauNcHeS IN europeThe largest share of the European market is held by Amazon,with Sephora accounting for the largest portion among retailers specialising in beauty&cosmetics.Douglas and Boots also stand out as major retailers in this sector.
83、The European beauty sector has seen a number of significant moves recently among retailers,particularly in Spain,the UK and Norway.Chinas Alibaba has chosen Spain as the first location for the launch of its Tmall ecommerce platform in Europe,while Sephora has fully launched in the UK market followin
84、g its acquisition of Feelunique.In June 2023,Tmall was running a pilot project in Spain,which“will expand across Europe,”according to Michael Evans,President of Alibaba Group.3Tmalls expansion to Europe is an interesting move,especially as the platform has proven to be such a success for European br
85、ands selling in the Chinese market.Tmalls luxury pavilion has been a key entry point to the market and for product launches.According to a talk Evans gave at VivaTech Paris and reported by CNBC,Tmalls approach to Europe will be to“serve local brands and local consumers in the local markets”.This mea
86、ns Tmall is entering a market that is already competitive,especially among beauty&cosmetics retailers and,of course,Amazon.Its approach to the premium end of the market in Europe will be interesting to follow,as will the experience and techniques it brings to European consumers that are already succ
87、essful in China,suchas livestreaming.1 beauty eXpaNDSSwedish fashion brand H&M has expansion plans as well.The company has chosen Norway as the location to launch its first bricks-and-mortar H&M Beauty store.The 300m2 flagship store is located on Oslos main street,Karl Johans gate,offering shoppers
88、easy access to H&M own branded items as well as a curated selection of products from more than 80 brands including Huda Beauty,Wishful,Kayali,Smashbox,Anastasia Beverly Hills,KVD,Origins and Emma S.This first store opened on 4 May 2023,followed by asecond in the same city at the end of the month.The
89、 company says that this is the start of H&M Beautys journey,“with the goal of creating both a physical and digital beauty universe where the customer can be inspired and buy their entire look.”H&Ms own beauty products are sold online currently,with the extended offer available on its Norwegian site,
90、as well as in Sweden and Germany.“We are very happy that we can now offer our customers a well-curated beauty assortment that goes hand-in-hand with the fashion we offer.Our goal is to inspire every customer who enters an H&M store,or who shops online at ,to leave with a complete look across fashion
91、 and beauty,”says Cathrine Wigzell,General Manager,H&M Beauty.SepHora IN tHe uKSephora has fully entered the UK beauty&cosmetics market following its acquisition of Feelunique in 2021.The Feelunique site was replaced with Sephora branding,enabling consumers in the UK to browse and buy from across th
92、e mix of prestige cosmetics,fragrance,skincare,haircare and wellness products that Sephora carries.The retailer,which is owned by LVMH,opened a flagship bricks-and-mortar store in Westfield London in March 2023.“At Sephora,we innovate every day to build the most loved beauty community.We are delight
93、ed to bring Sephora to the UK,responding to Britains strong demand for our unique prestige beauty experience.UK customers will be encouraged to explore and discover the best versions of themselves as we support them in their beauty journey with a fantastic curation of time-tested classics and new in
94、die brands,”said Sephoras Chairman and CEO Chris deLapuente.“We will offer British consumers a pioneering selection of beauty that is best in class for innovation,diversity and inclusion.The UK is home to a dynamic beauty and wellbeing market that Sephora will aim to surprise and delight through our
95、 trademark knowhow and creativity,”he added.Bath and Body Works has also opened a bricks-and-mortar store in the UK.14|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|coNSuMer beHaVIourRetailX study shows how consumers behaveBeauty customers are avid online shoppers,spending more a
96、cross the internet than other consumersShopping for beauty&cosmetics creates a variety of different customer journeys in terms of how and where consumers buy,the channels they use and the mix of touchpoints both online and off.Some products are bought in quick grab,pay and go transactions where the
97、customer knows exactly what they want and goes directly to it in a store.Online,navigation,a search bar or personalisation techniques showing previously viewed or bought items all help with speeding up the process and reducing friction for the customer.Retailers of mass market products then try to g
98、ain a greater share of these consumers purchasing through implementing subscribe and save models,discounts for buying multiples of the same product and marketing for repeat purchases.While consumers may stay loyal to their favourite brand or products in segments such as skincare,there are many other
99、 transient shoppers who are easily swayed into buying new products and trying other brands.In fact,consumers who buy beauty&cosmetics products online are influenced by adverts Monthly online spend,cosmetics e-shoppers(%),2022Frequency of online purchase,cosmetics e-shoppers(%),202215|RetailX|July 20
100、23 RXSBC23RP 2023 Global beauty Sector report 2023|coNSuMer beHaVIourmore frequently than other shoppers and are more likely to go on and make a purchase after seeing a product advertised.Beauty&cosmetics shoppers buy online across all product categories more often as well.42%of beauty&cosmetics e-s
101、hoppers buy something online more than once a week compared to 32%of online shoppers who only buy from other product categories.A larger number shop online multiple times a day 7%of beauty&cosmetics shoppers,compared to 6%of other people.As the frequency of shopping times decreases so the percentage
102、 of consumers who shop only outside of this category increases.13%of general e-shoppers buy online more often than once every three months,compared to 11%of beauty&cosmetics shoppers.This may be because a large percentage of consumers buying beauty&cosmetics online are found in the younger age group
103、s.The majority of online shoppers who buy beauty&cosmetics online are under 34,according to a survey conducted across multiple countries by RetailX.These Millennials and GenZ,who have grown up with the internet and ecommerce,are known for being less loyal to brands and actively seeking out digital e
104、xperiences and inspirational content all factors that will make them more likely to click through from targeted advertising.They are also more knowledgeable about the products they are buying,wanting clarity on ingredients and product efficacy,as well as being price sensitive in the current economic
105、 climate.Frequency of advertisements leading to purchase,cosmetics e-shoppers(%),2022Other goods purchased online by cosmetics e-shoppers(%),202216|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|DIGItal cHaNNelSDevelopments in digital channelsDigital content is extending beyond do
106、tcom sites as retailers innovate with the customer experienceThe switch to shopping online continues,albeit at a slower rate than during the pandemic years when consumers swapped shopping in bricks-and-mortar stores for the perceived safer environment of the internet.This behaviour highlighted those
107、 retailers that had invested heavily in digital channels in previous years,as well as the agility of all to ramp up fulfilment operations,introduce click and collect or curbside collection.Digital experiences were ramped up,such as the use of augmented reality enabling consumers to try on colour cos
108、metics or switch hair colour virtually.Since then,Nars Cosmetics has found that consumers try an average of 27 shades on its website,with the ARtool driving a 300%increase in conversion rate.Implementations such as these didnt slow as consumers returned to shopping in bricks-and-mortar stores,and lo
109、oking at the growth figures for the industry they are becoming more important,not less.In fact,when comparing figures to 2019,brands and retailers are selling more online than they were before the pandemic.This boost to online has resulted in 31%of beauty&cosmetics products being bought online in 20
110、22 compared to 22%in 2019.In 2021,online accounted for a third(33%)ofall sales.What has continued to grow is mobiles share of the online market as the use of desktop devices for shopping declines.While overall sales online decreased in 2022,mobile accounted for a larger proportion of those sales tha
111、n it had in 2021.Mobile accounted for 61%of sales in 2022,compared to 60%in 2021 and 55%in 2019.Consumers say they like the convenience of shopping online,but beauty&cosmetics shoppers also like the actual experience of shopping and product discovery is as important as repeat purchases of favoured p
112、roducts.As shown in the RetailX Beauty&Cosmetics 2022 report,it is not uncommon for consumers to own upwards of 50different beauty&cosmetics products.The importance of social media influencers and content creators to this sector attest to consumer desire for newness and experiences.The extension of
113、digital experiences,from website to mobile app,social platforms and the metaverse,as well as into physical retailing,will further increase the attractiveness of brands,particularly to younger shoppers as their spending power increases.Metaverse beauty Week played out across Decentraland,Spatial and
114、roblox Cult17|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|DIGItal cHaNNelStHe rISe oF artIFIcIal INtellIGeNceThe use of artificial intelligence(AI)in ecommerce is common.It is used across different applications from supply chain to merchandising.Where it is in more noticeable v
115、iew to customers is in the use of augmented reality virtual try-on and skin analysis tools.These have become entrenched in the industry and consumers are used to visiting a website,mobile app or bricks-and-mortar store to receive personalised recommendations for skincareproducts.Skincare analysis to
116、ols use a mixture of user-answered questions,images from the shoppers webcam or mobile phone camera and artificial intelligence to analyse areas of skin,identify skin type and the skincare ingredients that are best suited to alleviating any concerns the customer has.Tools such as these help personal
117、ise the experience for customers,increasing surety over the items they are buying as well as increasing engagement and reducing products returns.Marianna Naturals has seen dwell time on its site increase by 300%and sales growth of 30%since launching an AI skin analyser.In a different move,The Este L
118、auder Companies has developed an application that uses AI and augmented reality to give greater independence to visually impaired customers when applying colour cosmetics.Once makeup has been applied,the app analyses the users face checking that everything has been applied correctly and evenly.Advic
119、e is given audibly,with the app describing areas where lipstick,eyeshadow or foundation needs touching up.The companys Este Lauder brand was the first to introduce the Voice-Enabled Makeup Assistant(VMA)in a mobile app and on its website in the UK.Other brands will roll out the technology in due cou
120、rse.“The launch of our Voice-Enabled Makeup Assistant is an important step in our journey towards makeup accessibility for all by removing barriers to engaging with beauty products and services,”says Monica Rastogi,Executive Director,Corporate Cultural Relevancy and Inclusion and Diversity,The Este
121、Lauder Companies UK&Ireland.While artificial intelligence helps retail sites make personalised recommendations from a range of mass produced products that are available for sale,other brands are taking the concept further with on-demand manufacturing.Perfect Corp,which is known for its AR and AI tec
122、hnology online,has partnered in an offline analysis tool to be used with apersonalised,on-demand skincare service.Precision Skin takes into account the users preferred product texture,key skin concerns and lifestyle habits as well as the AI analysis before providing a detailed report on a customers
123、major skin concerns,including moisture,pores,acne,spots,firmness,radiance,dark circles,droopy lower eyelids,wrinkles,texture,oiliness,redness and eyebags.The AI analysis also provides the customer with an overall score for skin health.From these,the Precision Skin team can provide a bespoke skincare
124、 formula for thecustomer.“Personalisation is the future of skincare,”believes Alice Change,Founder and CEO of Perfect Corp.“With the power of AI technology,skincare customers can have bespoke product formulations created for them,with active ingredients that better address their unique skin concerns
125、.”Shopping channel share by revenue for beauty care multichannel shoppers(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|DIGItal cHaNNelSAmorepacifics Cosmechip combines software and hardware to give one-to-one skincare solutions that are personalised and manufactur
126、ed as required at home.The home appliance which won an innovation award at the 2023 Consumer Electronics Show uses active ingredients and water to create the correct textured product with the best formula for the users skin condition at the current time.cHatGptWhere artificial intelligence has gaine
127、d traction in 2023 is through applications using ChatGPT.The generative AI can be integrated into websites and mobile apps to understand and answer complex or nuanced consumer questions in real time using a mixture of knowledge about the brand and its product catalogue and information about beauty&c
128、osmetics in general.Whats more,ChatGPT does this using natural language so consumers can ask questions in a natural way and receive responses in the same manner.This is regardless of the language used since ChatGPT can also be used for languagetranslation.The advantage of these integrations by beaut
129、y&cosmetics companies is in ChatGPTs 24/7 availability,so an assistant or beauty advisor can be available at any time to help with customer service questions,such as delivery times,as well as guiding a customer through the shopping journey.Generative AIs capabilities make it seem as if the customer
130、is communicating with a knowledgeable beauty expert in-store or via a live link.Also,ChatGPT can take the personalised recommendations of existing AI-powered applications to a deeper level.Once items have been recommended,customers can ask questions about specific products,seek advice on skincare ro
131、utines or get tips on techniques to apply the recommended colour cosmetics.These are all applications that create deeper engagement and increase the likelihood of the shopper making a purchase.As an example,video-based beauty community and fan review site Supergreat has incorporated ChatGPT into its
132、 site,inviting consumers to“ask me anything about beauty+skincare.”Get Ready With Me,or grwm.ai as Supergreat calls the chatbot on its site,will recommend products and serve relevant videos based on what question it is asked.One concern that has been mentioned about ChatGPT is around the security of
133、 its responses and,like someone who always wants to help regardless of the depth of their knowledge,it has yet to learn to say“I dont know”.Because of this,any application incorporating the AI has to set its own guardrails and limitations to keep responses within the same boundaries and tone of voic
134、e that the brand woulduse.MobIle appSCharlotte Tilburys mobile app is one of the latest brand launches and highlights how consumers are looking for more of an experience than a quick shop and the tools that companies are using to engage these consumers and lead them to a purchase.Designed to educate
135、,inspire and reward new and existing customers,the mobile app brings together the makeup artists expertise through video tutorials with an AI-powered skin analyser to personalise the experience and AR virtual try-on to help the user find their perfect match.It also includes exclusive content and giv
136、es shoppers first access to products that have been out-of-stock or are new releases.These are backed up by a loyalty programme,rewards and gifts for members.“Our goal has always been for our community to feel like they are engaging 1-2-1 with Charlotte,because there is nothing quite like experienci
137、ng her energy and her expertise first-hand,”says Corinne Suchy,Chief Growth and Technology Officer at Charlotte Tilbury Beauty.“We created this app because we truly want everyone,everywhere to feel they are in her makeup chair experiencing the power of her artistry and confidence-boosting positivity
138、.”chatGpt is gaining traction as a beauty advisor Supergreat19|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|DIGItal cHaNNelSThe app is available in 34 countries and five languages since the brand wants to follow Charlotte Tilburys mission to“democratise and simplify beauty for a
139、ll.”“We want to reach those customers around the world,of all ages,genders and backgrounds,who havent felt that professional makeup artistry or expert skincare advice is accessible to them,”says Suchy.“Charlottes app is for both the beauty beginner who wants to unlock their beauty confidence and und
140、erstand what their beauty wardrobe of skincare and makeup looks like and for our engaged community which wants to discover even more of Charlottes expert artistry.”VIrtual StoreS aND tHe MetaVerSeDisney,Microsoft and Meta have been laying off staff in their metaverse divisions but there is no slowdo
141、wn among beauty&cosmetics companies.LOral,which is becoming a beauty tech company as well as a beauty&cosmetics company,has made its first venture capital investment in the metaverse space.The French company has invested in building platform and NFT marketplace Digital Village as part of a$4 million
142、 funding round.Other brands in the beauty&cosmetics sector are launching virtual experiences to raise awareness of their products among potential new customers.Many of these are temporary being pop-up stores,part of larger industry-wide events or games within multi-player platforms.Consumers are emb
143、racing these new experiences and shopping within them as well.In 2022,an estimated$1 billion was spent in virtual stores and the metaverse across all product categories,according to Coresight Research.The company estimates that sales will more than double in size every year until 2027.Korean skincar
144、e brand Laneige is among the latest to launch in the virtual beauty&cosmetics space.Its virtual store enables visitors to explore the brand through a mix of digital entertainment,videos,quizzes and explanations of key product ingredients.Visitors can add items to their basket in the store to buy dir
145、ect from the brand.Obsess,the technology company behind Laneiges virtual store,has discovered that visitors to one global consumer goods brand spent ten times the amount of time in a virtual store than on the brands traditional ecommerce site,while visitors to a leading luxury brands store were 112%
146、more likely to make a purchase.Cosmetics giant Shiseido is already a convert to virtual stores and the metaverse.The Japanese company has found that consumers are more willing to engage with brands in such settings than on traditional social platforms.Shiseidos Nars Color Quest game on the Roblox ga
147、ming platform attracted 41.9 million visitors between July and October 2022.The game itself used different islands corresponding with makeup colours with non-player characters that gamers could interact with to unlock special abilities.Gamers could also earn badges and use virtual currency to buy me
148、rchandise and virtual looks.Roblox is not the only platform attracting beauty&cosmetics brands.Metaverse Beauty Week 2023 played out across Roblox,Decentraland and Spatial.Brands also used it cross between virtual space and the real world,highlighting how the metaverse can work in parallel with exis
149、ting channels.Device usage share by revenue for beauty care online shopping(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|DIGItal cHaNNelSFor example,Glossybox dropped parcels from the sky in Decentraland and scattered Glossyboxes across the scenery,giving consumer
150、s the chance to win a free physical Glossybox.According to the company,49%of Glossybox metaverse attendees clicked through to the Glossybox site.Ahead of the event,the company put 200,000 inserts into customer orders in the UK in order to promote theevent.Metaverse platforms and massively multiplaye
151、r online role-playing games(MMORPG)realise the market appeal of their brands,so while beauty brands are finding their space on the platforms,the platforms are merchandising outside of their virtual worlds.For example,Epic Games has partnered with Revolution Beauty to launch Revolution Beauty x Fortn
152、ite,marking the gaming platforms first-ever beauty collaboration.The range consists of 27 products including colour cosmetics and skincare which have been inspired by the Fortnite game and characters within it.As such,the collection is appealing to players Fortnite has 500 million+registered account
153、s worldwide as well as Revolution Beautys customer base.MarKetplaceSMarketplaces,such as Amazon,attract a much higher level of traffic than brand and retailers own ecommerce sites in the beauty&cosmetics sector.They understand the price and convenience factors driving consumer purchasing when the sh
154、opping journey is one of a quick grab and go rather than a more leisurely inspirational visit.Marketplaces give consumers a fast and easy way to shop.Even multisector sites,which encompass marketplaces as well as retailers selling across a variety of categories,gather a larger share of web traffic t
155、han sites focused purely on selling cosmetics.This is a generalisation that alters depending on specific country or marketplace vs retailer assessed but globally and at regional levels it holds true.How brands use marketplaces shows the power that these platforms now have in the wider retail environ
156、ment,often forming part of brands omnichannel strategies.They are the first choice for many customers shopping online and for brands that have to follow where the customer goes,they offer a risk-free way to sell online.Any misgiving they may have had in the past about ceding brand identity or custom
157、er data to marketplaces is longgone.Europes luxury brands have been embracing the marketplace model created by Tmall as a way to reach high spending Chinese consumers.This has opened the way for them to work with marketplaces in other regions and enabled them to learn lessons from Asias mobile-first
158、 consumers.As research by RetailX in the Health&Beauty Marketplaces report shows,the majority of the leading beauty bands within the RetailX Top500 ranking sell online on marketplaces.For example,Clinique and Este Lauder are both sold on the keymarketplaces for health and beauty in EMEA.Ofthe 21 bra
159、nds making it into the Top500 ranking,it is only Clinique and Este Lauder that appear on all of these leading health and beauty marketplaces.Furthermore,retailers in the beauty&cosmetics sector are opening up to the opportunity of marketplaces as a business model enabling them to derisk expansion.Se
160、lected brands can sell products on niche retail sites and fulfil orders directly to the customer without the retailer having to hold stock in a warehouse or store.For retailers already established as leaders in the beauty&cosmetics sector,extension through a marketplace offers relatively risk-free,l
161、ow cost growth.If the retailer already stocks 70%of a brands inventory,the remainder could be sold online through a marketplace addition to their ecommerce site.Margins are higher than more traditional retail models as well,since responsibility and the burden of pricing,fulfilment,content creation e
162、tc.are with the brand rather than the retailer.For example,German beauty retailer Douglas operates what is calls a closed and selective partner programme.It closely monitors market trends and customer needs,so is able to respond to changes fast,working with brands to add product to its ecommerce sto
163、re and ultimately benefiting its customers.“Thanks to the fact that we carefully select our partners and present their products in a high-quality beauty environment,we can maintain our premium standards and thus a positive reputation for both sides,”says Steffen Maschke,Head of Partner Programme at
164、Douglas.“If something is trending on TikTok,Douglas can quickly add it for sale via a partner without any of the risk or need to store the product itself in stores or warehouse,”he adds.21|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|SocIal MeDIaThe influence of content creators
165、Social media has a greater influence on cosmetics purchasers than other groups of online shoppersSocial media is of significant importance for the beauty&cosmetics sector.The reach of platforms such as Instagram and TikTok enable brands and retailers to engage with consumers directly in a way that w
166、asnt achievable before.Influencers and content creators alike play a major part in marketing campaigns,with consumers looking to them for expertise and recommendations.Such is the impact of social on this sector that the majority of consumers who buy beauty&cosmetics online say that an influencers r
167、ecommendation is likely to lead them to buying a product.22%of cosmetics e-shoppers are“very likely”to make a purchase after seeing an influencers recommendation,with a further 42%“somewhat likely,”according to a survey of consumers in multiple countries by RetailX.In both cases,consumers who buy be
168、auty&cosmetics online are more likely to be influenced in this way than consumers who dont shop this category online.A fifth of general e-shoppers say it is“very unlikely”that influencer recommendations will lead to them making a purchase.Likelihood of influencer recommendations leading to purchase,
169、cosmetics e-shoppers(%),2022Channels for product discovery,difference between cosmetics and general e-shoppers(%),202222|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|SocIal MeDIaWhile the results are true across four of the six countries in which consumers were surveyed(Australi
170、a,Brazil,UK and the US),online beauty shoppers in France and Germany are less likely to be influenced by what they see on social media than consumers who purchase in other product categories online.Overall,it is cosmetics purchasers in France who are least likely to spend money based on influencers
171、content,although almost 50%of those asked could be influenced to a certain extent.It is among consumers in the US and Australia where the biggest differences can be seen between consumers who shop for cosmetics online and those who dont.In the US there is a 15 percentage point difference between the
172、 two groups,while in Australia beauty consumers are 13 percentage points more likely to buy product seen on social media than online shoppers who only buy other categories.Consumers in Brazil are the most likely to be influenced into purchasing by social media content creators.38%of the people who b
173、uy beauty&cosmetics online in Brazil are very likely to act on an influencers recommendation,with a further 43%somewhat likely.Trust in influencers is particular high in the South American country since the same is true of 80%of online shoppers overall.Instagram is the main channel on which cosmetic
174、s shoppers see adverts most often that they then click on.Again,this varies by country,with consumers in Brazil most likely to interact with advertising on Instagram.The platform also shows up the greatest difference in behaviour between cosmetics shoppers and those who dont buy in thiscategory.Shar
175、e of online consumers buying from social networks,selected countries,2022Countries with the highest and lowest percentage of consumers intending to shop more through social commerce,202223|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|partNer perSpectIVeExpert insightTreat yourse
176、lf findingbeautyin little luxuriesKamran Iqbal,Commerce Strategist at PFS During the early 2000s recession,Leonard Lauder,heir to Este Lauder,introduced the term“The Lipstick Index”.Lauder hypothesised that cosmetic purchases tend to be inversely correlated to economic health.He observed that during
177、 periods of economic uncertainty,people shift from buying expensive items to purchasing smaller but still luxurious products such as lipstick.We can see evidence of the lipstick index playing out through several major financial events as consumers have repeatedly looked to these small luxuries to br
178、ing joy in trying times.Cosmetics sales surged during the Great Depression and again when the 2008 recession hit,and we continue to see increased demand for beauty and cosmetics products that began during 2020.More tHaN JuSt lIpStIcKThrough the years,we have adapted the term to fit current trends.Ar
179、ound 2010,with nail art growing in popularity,this financial marker became the nail-polish index.Then,during the Covid-19 pandemic,it evolved into the mascara index with everyone wearing masks,sales of lipstick took a back seat as our eyes became the focus and,with that,eye makeup sales increased.As
180、 retailers such as LOral continue reporting double-digit sales growth across the board,Lauders original theory rings true beauty purchases ride the wave of economic turbulence in a way that other luxury items do not.As the global economic crisis continues to play out in 2023,were starting to see oth
181、er luxury sectors experience a slowdown,begging the question,is the Lipstick Index still a relevant indicator today?Despite record US inflation rates in 2022,online searches for cosmetics increased by around 300%compared to the previous year.Fragrance sales saw increases as well,with Gen Z and high-
182、income buyers driving the growth.This suggests that the Lipstick Index theory continues to hold true,though some categories appear to be stronger than others.SpottING tHat treat yourSelF MeNtalItyRetailers that keep their customers happy,keep them.Being able to spot consumer trends is critical to en
183、suring you are providing consumers what they want and,in turn,capturing their loyalty.Retailers can add value to the customer experience through theorder fulfilmentprocess,especially when they are able to deliver that luxury feel via ecommerce fulfilment.Delivering products in high-end packaging and
184、 creating an enjoyable unboxing experience can keep your brand top-of-mind and encourage customers to return for more when they are ready for another pick-me-up.Many consumers will often return to the same retailer time and time again for their staple lipstick or mascara.In fact,retailers have been
185、known to damage loyalty when they ignore zero-party data and discontinue cult favourites.Changes to key product lines often leads to consumers seeking out dupes or supplementary products.Using big data to evaluate popular lines,colours and order volumes can save a loss of loyalty down theroad.By com
186、bining data gathered from purchases,on-site searches and returns information,retailers can create a clear picture of items in high demand.24|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|partNer perSpectIVeThe data gathered allows retailers the opportunity to maximise sales by fo
187、cusing on the items that are seeing the most interest.From an inventory perspective,this data also assists brands in determining restocking priorities and making other decisions regarding items and stock-keeping units(SKUs).This could be down to colour,size or othervariations.Whilst it can be diffic
188、ult to know where to start,the information gathered from zero-party data can help retailers look for trends and insights,whether thats a Lipstick Index theme or something else,thus enabling brands to make informed decisions based on their own consumers and not just industry data.A brand can bring al
189、l these insights together to support future product development,order management and customer experience initiatives.Thanks to big data,companies no longer need to worry about losing customer loyalty over a cult favourite lipstick shade being discontinued,or being left behind when it comes to new be
190、auty trends.Big data should now and forever be a retailers best friend when it comes to all areas of the beautybusiness.are We treatING ourSelVeS,or beING INFlueNceD?Treat yourself aside,the continued strength of cosmetics sales may be due to other factors in addition to the rocky economy.Technologi
191、cal advancements have made it easier than ever for consumers to purchase beauty and cosmetics products online.This includes features such as colour matching options,the use of AI to achieve the perfect complementary shades,and digital try-onenablement.Social media and the rise of the beauty influenc
192、er has also increased demand for makeup products,enabling consumers to discover new products and trends every time they scroll Instagram and TikTok.Social proof has fast become an important factor for consumers ahead of purchasing a product.The validation consumers receive in seeing influencers use
193、products is a critical component to building consumer trust online.According to Global Web Index,48%of beauty buyers follow influencers on social media,with just under half(49%)using social media as their main point of research when looking at new products.Not to mention how easy it is to be influen
194、ced when you arent even seeking that information a simple scroll down your feed can result in a purchase without too much thought.The beauty and cosmetics industry remains an important part of consumer spending despite continued economic turmoil.By keeping a close watch on spending habits,influencer
195、 trends and economic projections companies can tailor their marketing strategies and product offerings to meet the needs and preferences of their customers.PFS is the ecommerce fulfilment provider of choice for the best in beauty.Learn more about our experience supporting beauty and cosmetics brands
196、,and how we can do the same for you here.Kamran Iqbal is an expert in all things commerce,pre-and post-click.As Commerce Strategist at PFS,he shares his extensive industry knowledge with brands and retailers to help drive digital transformation and omnichannelexcellence.PFS supports the worlds leadi
197、ng beauty brands with post-click ecommerce operations inherently designed for beauty and cosmetics industry requirements.With rapid scalability that supports peak volumes and value-added services that enable deep personalisation(engraving,samples fulfilment,kit-to-order,etc.),beauty brands look to P
198、FS to fulfil brand-centric experiences that inspire customer loyalty.With solutions supporting B2B and DTC operations and 20+years of experience in the industry,PFS is the provider of choice for brand-centric ecommerce fulfilment.PFS ecommerce fulfilment Built for pFScommerce25|RetailX|July 2023 RXS
199、BC23RP 2023 Global beauty Sector report 2023|Key playerSKey players:The largest 100Global beauty&pharmacy the largest 100Global beauty&pHarMacy tHe larGeSt 100Adore BeautyAllbeautyAmwayAPO DiscounterApollo PharmacyApotalApotea.seApotekApoteketApothekeApteka MelissaApteka Ot SkladaApteka24AraujoAroma
200、-ZoneAvonBath&Body WorksBeauty BayBeleza na WebBootsChanelChemist WarehouseClicksColourPopCult BeautyDHCDocMorrisDoTerraDouglasDoz.plDr.MaxDrogaria So PauloDrogarias PachecoDruniEaptekapoca CosmticosEste Lauder EtosEudoraFarma CityFarmacia LoretoFarmaeFarmalineFlaconiFraganceNetFragrancexFramarGloss
201、ierHarrysKiehlsKikoLEtoileLOccitaneLife ExtensionLloyds PharmacyLookfantasticMakeupMarionnaudMatasMeccaMedikamenteMedpexMonatNaturaNewpharmaNocibNotinoO BoticarioOriflamePague MenosPanvel FarmciasParfumdreamsPaulas ChoicePilulkaPriceline PharmacyPrimorRandewooRitualsRossmannSally BeautySant Discount
202、SephoraShoppers Drug MartSpace NKStolichkiSuntorySuper-PharmSuperdrugSwanson VitaminsTabletkiThe Perfume ShopThrive CausemeticsUltrafarmaWaptekaWell.caYoung LivingYves RocherZhivikaThe largest 100The following list shows the beauty and pharmacy ecommerce sites receiving the highest web trafficSome b
203、eauty&cosmetics brands have a global presence,with ecommerce sites receiving visitors from multiple countries.Localised sites enable consumers to experience the brand in their own language.Other companies are leaders in specific regions,such as those that have expanded from their domestic market int
204、o neighbouring countries.High visitor numbers online do not always translate to high turnover but web traffic can give an indication of a companys market share.For instance,Sephora receives the greatest amount of web traffic from consumers in Europe while in Oceania the title goes to Chemist Warehou
205、se,according to statistics from RetailX,drawing on data from knowledge partnerSimilarweb.Due to the nature of the sector and the inclusion of skincare products,companies better known for their pharmaceutical and personal care ranges,rather than being specialist beauty retailers,are included in the l
206、isting.The statistics show that Bath&Body Works is the most trafficked site in this category in North America,with Araujo seeing the most visitors in South America.Consumers in the other two regions,Middle East and Asia,are most likely to visit Super-Pharm and DHC respectively.26|RetailX|July 2023 R
207、XSBC23RP 2023 Global beauty Sector report 2023|coMpaNy proFIleAmorepacific at a glancecompany:AmorepacificHeadquarters:Seoul,South KoreaFounded:1945revenue 2022:KRW4.5 trillionKey brands:Amorepacific,Innisfree,Laneige,Etude,Amos Professional,Osulloconline:Annual revenue growth of Amorepacific Corp(%
208、),2020-2022Annual growth of web traffic to Amorepacific(%),2018-2022Amorepacific was established on 5 September 1945 with the founding philosophy of“contributing to humanity through beauty and health”.Today,this is seen through the companys environmental work and A rating on CDPs climate measures as
209、 well as its innovations in the beauty space.The company continues to strengthen its position as a K-beauty leader,particularly with its skincare brands including Amorepacific,Sulwhasoo,Laneige and Innisfree.The company launched into the US market in 2002 and this continues to be a key focus for its
210、 global expansion which has also seen ecommerce growth and expansion through multi-brand stores,in response to changes in the market during the pandemic.In the first quarter of 2023,Amorepacific Groups sales in North America increased by 80%.In September 2022,it acquired luxury clean beauty brand Ta
211、ta Harper in a move that further signals the companys intent to grow its global business,particularly in the North American market.Amorepacifics Tonework and Cosmechip technologies,which make personalised products for individual customers,were awarded innovation awards at the Consumer Electronics Sh
212、ow 2023.Celebrating the companys 77th anniversary,chairman and CEO Suh Kyung-bae said,“now is the time to redefine and rebalance our business by placing the basis of all values in our customers.”He continued:“let us continue to communicate with our customers at home and abroad to help them build the
213、 lives they want in an era of infinite potential that transcends the boundaries of nations and regions.”He also highlighted the importance of digital technologies in reaching customers.“We must expand our perspective to across the entire life of our customers,effectively use digital and data technol
214、ogy to reach Amorepacific customers more closely,and continue our effort towards achieving our goal.“We make A MORE beautiful world based on our spirit of New Beauty that emphasises with the challenge our customers and world face,”he added.27|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector rep
215、ort 2023|coMpaNy proFIleCompany profile:Charlotte TilburyMakeup artist Charlotte Tilbury MBE launched her eponymous luxury beauty brand in 2013.In June 2020,Spanish fashion and beauty business Puig acquired a majority stake.Tilbury remained as Chairman,President and Chief Creative Officer of the com
216、pany,with Demetra Pinsent continuing asCEO.At the time,Tilbury commented:“Ive always dared to dream and create magic through beauty.Im proud to be joining forces with Puig in a strategic partnership that will help us achieve our limitless ambitions.Weve reached a pivotal point in our growth since la
217、unching seven years ago,and were looking forward to unlocking new opportunities with Puig,which is the perfect partner as we build an iconic brand to last.The deal added an established makeup and skincare brand to Puigs portfolio of fashion,fragrance and luxury beauty brands while gaining Charlotte
218、Tilbury access to Puigs global footprint and operations as it continues itsexpansion.MobIle appIn June 2023,Charlotte Tilbury launched a mobile app making the artists expertise available to a wider customer base.The app uses a mix of content for the founder to share her expertise as well as artifici
219、al intelligence-powered tools to personal the experience for shoppers.Consumers can watch tutorials on skincare routines,read news,view makeup application techniques and access tools for finding the right product or shade.The focus of the app is to simplify beauty for everyone whatever their level o
220、f knowledge.Augmented reality is used to help consumers purchase items they are seeing used in video tutorials within the app while artificial intelligence helps with analysis and personalised recommendations.A skin analysis tool enables a personalised skincare routine to be offered to a potential c
221、ustomer in less than 60 seconds.It also takes under a minute to help a customer find a product match.Consumers are invited to login to the app so they can earn loyalty points on purchases,access free gifts and member-only products.They also have to login to use the skin analysis and shade match tool
222、s.charlotte tilbury at a glancecompany:Charlotte Tilbury BeautyHeadquarters:London,UKFounded:2013revenue 2021:225 milliononline:Annual growth of web traffic to Charlotte Tilbury(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|coMpaNy proFIleCompany profile:DouglasDou
223、glas is an international success story selling a wide mix of health and beauty items across cosmetics,skincare,haircare and perfume in multiple countries in Europe.It operates via a network of 1,840 bricks-and-mortar stores as well asonline.Douglas is a digital-first business and is at the forefront
224、 of merchandising beauty products in ways that resonate with consumers.Content such as videos and live streaming inspire and teach customers about different beauty brands,applications and techniques as well as giving the retailer an opportunity to interact with customers inreal-time.Shoppers can ent
225、er competitions and claim discounts against different products and brands while taking part in the livestreams.They also provide a number of commercial opportunities for health and beauty brands,including Honest Beauty and Clarins which have participated to date,to give away product.On its mobile ap
226、p,customers can analyse their skin and try on makeup virtually.AI tools combine data from an uploaded image with information that the consumer enters manually to determine skin type,level of hydration,oiliness and wrinkles to give tailored product recommendations.Another tool on the app helps consum
227、ers find the perfect fragrance.In 2019,Douglas became the first beauty retailer in Europe to incorporate a marketplace solution into its ecommerce platform,pioneering the move by this sector to enable third parties to sell on their ecommerce sites.Today,the retailer works with more than 200 partners
228、,3,000 brands and offers more than 200,000 SKUs.It also offers marketing services to brands enabling them to maximise the opportunity of the Douglas partner programme,asit calls its marketplace.“We see it as an added value for our customers,asthey benefit from the partner programme by being able to
229、choose from an even larger assortment and along with it a much higher availability of products,”says Steffen Maschke,Head of Partner Programme at Douglas.Online sales are now more than double what they were before the pandemic,with Douglas reporting ecommerce sales of 1.2 billion in its latest full
230、financial year.Douglas at a glancecompany:DouglasHeadquarters:Dusseldorf,GermanyFounded:1918revenue 2022:3.65 billiononline:www.douglas.deAnnual growth of web traffic to Douglas(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|coMpaNy proFIleLOccitane Group is compris
231、ed of nine beauty and wellness brands including LOccitane en Provence,Elemis,Sol de Janeiro and Grown Alchemist.The brands sell across the skincare,body and bath,haircare,fragrance,mens,gifts and travel categories.Products are available across a network of more than 3,000 retail outlets in 90 countr
232、ies as well as online.1,490 bricks-and-mortar stores are operated by the Group,which employs more than 9,000 people.The brands ethos is to use the best natural and organic ingredientsin its products combined with a respect for nature as well as an innovative and science-based approach to development
233、.These sustainability values extend to the support given to local growers and produces.For example,a 30-year joint partnership in Burkina Faso enables the brand to support more than 10,000 women working to produce shea butter.In March 2023,LOccitane Group brand Elemis became a B Corp,a form of busin
234、ess entity that puts sustainability on a legal footing within its corporate reporting.The transition took two years and saw Elemis changing a number of processes and practices across the business.Key changes included:DE&I training and mentoring programmes for all employees,ensuring fair wages and wo
235、rking conditions,changes to packaging and adoption of new carbon sink projects to help the company achieve its biodiversity and climate goals.“We are proud of our B Corp certification,a holistic assessment of a companys social and environmental impact across all of its stakeholders.In our view,compa
236、nies have a responsibility to bringmeaningful,positive benefits to society,”saysSan Harrington,Co-Founder&CEO of Elemis.LOccitane Group wants all of its independently operated brands to gain B Corp status as part of its long-term ambition to become the market leader for natural cosmetics.Its nature-
237、based ethos is highlighted online on the homepage of ecommerce sites and on individual product pages where emblems show product properties including vegan friendly and paraben free.Developments such as recyclable packaging,take-back schemes and product refills show customers how they can make a diff
238、erence.LOccitane Groups online sales account for almost a third of groupturnover.loccitane a glancecompany:LOccitane GroupHeadquarters:Geneva,SwitzerlandFounded:1976revenue 2022:2.13 billionKey brands:LOccitane en Provence,Melvita,LOccitane au Bresil,LimeLife,Elemis,Erborian,Sol de Janeiroonline:Ann
239、ual revenue growth of LOccitane International SA(%),2021-2022Annual growth of web traffic to LOccitane(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|coMpaNy proFIle“LOral is the archetype of the beauty pureplayer nothing but beauty,for all types of beauty and our u
240、nique expertise acquired over 110 years,allows us to understand,in extreme detail,the desires and aspirations of consumers all around the world,”so says Jean-Paul Agon,Chairman of the Board of Directors,LOral Groupe.As a group,LOral encompasses 36 international brands including Maybelline and CeraVe
241、,more than 87,000 employees and a presence across online,department stores,pharmacies,hair salons and travel retail.It also operates 20 research centres in 11 countries.The group has ambitions around sustainability,where it remains the only company in the world to have been award the highest CDP rat
242、ing of AAA for seven years consecutively.EcoVadis ranks LOral in the global top one per cent of companies in terms of environmental and social performance.LOral continues to strengthen its position as a beauty technology powerhouse.To this end,its Research and Innovation team currently comprises 5,5
243、00 tech and digital professionals.Overall,sales increased in 2022,with the Consumer Products Division reporting its best growth in 20 years.Turnover increased 8.3%like-for-like and 14.6%reported growth,with makeup being the Divisions fastest growing category.Growth continues in 2023.Group sales incr
244、eased by 14.6%to 10.38 billion in the first quarter with LOral outperforming the market in all geographies.Sales were particularly strong in South Asia and the Middle East/North Africa as well as in Latin America.Overall,“this performance,which has yet to benefit from Chinas reopening,demonstrates t
245、he strength of LOrals balanced multipolar model,”says Nicolas Hieronimus,CEO,LOral.“Mindful of the current uncertainties,we remain optimistic about the outlook for the beauty market,ambitious for the future and confident in our ability to keep outperforming the market and achieve another year of gro
246、wth in sales and profits in 2023,”he added.Future growth in the luxury division will be accelerated by LOrals acquisition of Australian,clean beauty brand Asop.The brand,which was previously owned by Natura&Co,is known for its skin,hair and body products.loral at a glancecompany:LOralHeadquarters:Pa
247、ris,FranceFounded:1909revenue 2022:38.26 billionKey brands:LOral Paris,Maybelline,CeraVe,NYX,Garnier,Krastase,La Roche-Posayonline:Annual revenue growth of LOral SA(%),2020-2022Annual growth of web traffic to LOral Paris(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 202
248、3|coMpaNy proFIleCompany profile:SephoraSephora is part of LVMH,the French company that houses multiple brands across luxury including the beauty&cosmetics sector.Sephora is part of the companys Selective Retailing division which includes Paris department store Le Bon March Rive Gauche and luxury fa
249、shion pureplay 24S.According to the company,Sephora aims to be“always at the forefront of latest trends.Sephoras unique shopping experience offers beauty clients across the world an unparalleled choice among premium brand perfumes and cosmetics.”Sephora is present in 35 countries,with more than 2,60
250、0 bricks-and-mortar stores as well as online operations.The retailer carries around 78,000 products and employs 39,000 people worldwide.In the US,where it is among the leaders in the overall beauty&cosmetics sector,Sephora operates more than 600 stores as well as being present in a growing number of
251、 Sephora at Kohls stores.The first of these spaces within Kohls department stores opened in August 2021.The firms plan for stores to open at all of Kohls 1,100+locations across the US,with Kohls projecting annual sales from the premium beauty&cosmetics spaces of$2billion by 2025.Kohl reported in Aug
252、ust 2022 that the 200 Sephora at Kohls stores that opened in 2021 have“maintained a high single-digit per cent sales lift,relative to the balance of the chain.”The 400 stores that opened in 2022 were seeing a mid single-digit per cent sales lift,“which is consistent with the initial performance in t
253、he first 200 stores.”The report also showed how the two brands are complementing each other since“roughly half of all customers”who have made a purchase at Sephora are buying something from another category at Kohls as well.Online,Sephora US has accelerated its digital architecture growth with a swi
254、tch to microservices based,API-first,cloud-native,headless technology(MACH).The move is part of the premium retailers plans to enable customers to“shop without constraints,anytime,anywhere”as well as boosting digital experiences,including increased personalisation,and omnichannel services forcustome
255、rs.In the UK,the switch from Feelunique to Sephora branding is complete and the companys re-launch has been amplified with the opening of a flagship bricks-and-mortar store in London.Sephora at a glancecompany:SephoraHeadquarters:Paris,FranceFounded:1969online:Annual growth of web traffic to Sephora
256、(%),|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|NeXt StepSHeadwinds and tailwindsSustainability measures and economic pressures feature in board-level discussions in 2023,while new players disrupt existing marketsAmong the brands changing hands through acquisition i
257、n the past year have been Asop and Tata Harper.Both are clean beauty brands and have been acquired by large beauty corporations Asop by LOral and Tata Harper by Amorepacific.Acquisitions such as these will continue as companies follow consumer sentiment around environmental protection and purchases
258、that do as little harm as possible to the natural world while also boosting their own health and wellbeing.At the same time,clean beauty brands are doubling down to ensure that any claims are backed by science.Companies are also reducing their impact on the environment as corporate and investor sent
259、iment moves further towards sustainability.Legislation is moving this way in many countries as well,as governments look to enforce net zero promises made at country level.LOral,LVMH,Beiersdorf,Kao Corporation and Firmenich all rank among the global leaders in terms of scores for their environmental
260、endeavours.CDP,the non-profit organisation responsible for recording such measures,ranks all five companies as A(out of a possible A-D score)for their sustainability efforts across climate change,forests and water security.coNSuMer SpeNDINGSustainability measures are all being introduced against a b
261、ackdrop of turbulent economies and declining consumer confidence.High inflation is still a factor for many countries,with governments raising interest rates in a bid to curb inflation or avoid recession.“No one is predicting 2023 will be a golden year for retailers,but there are a healthy number of
262、growth areas to concentrate on,to maximise potential opportunities,”says David Jinks,Head of Consumer Research at ParcelHero.Brands and retailers are concentrating on areas that they can control.Some of the areas to watch or test within the beauty&cosmetics sector have been highlighted in this repor
263、t already but while technologies continue to develop,there are always new companies wanting todisrupt the industry,inviting consumers to try new shopping experiences and capturing the zeitgeist of current digital trends.DISruptorSAmong them are mobile apps including Agora and Trendio which combine t
264、he best innovations around social medias engagement levels,content creation,livestreaming,marketplaces and frictionless purchasing.Agoras beauty,skincare and wellness video shopping platform is available only via a mobile app in the UK,while Trendio offers a similar experience for shoppers in the US
265、.Agora requires brands to sign up to the platform as they would for Amazon or eBay,providing product content and pricing information.They are also responsible for fulfilling orders placed by customers through the platform.Where Agora differs from a traditional marketplace model is that sales are dri
266、ven by independent content creators uploading videos or streaming live product reviews or general beautycontent.The content creators add tags for any products used or mentioned in their video and this enables consumers to add the products to a shopping basket and checkout,all within the platform.Sho
267、ppers also receive loyalty points against purchases and when introducing friends to the app.The content creator receives commission for any sales they make for thebrands.“Some livestreams have a conversion rate as much as 10%,”according to Agoras founder Riccardo Basile.Trendio also reports higher c
268、onversion rates for livestreamed events rather than for recorded video but its founder believes that beauty fans in the US are not as keen to run livestreams as their counterparts in China.Trendio founder Alex Perez-Tenessa expects the platform to be made up of an equal amount of live and recorded v
269、ideo over the next 12 months but while they will account for a 50/50 share of the content,livestreamings higher conversion rate will see it generating 80%of productrevenue.Perez-Tenessa believes live is“critical”for creating the right experience for beauty marketplaces in the US and Europe.Join Reta
270、ilX today and access exclusiveresearch and webinars Join today at RetailX.netFree access to all resources for retailers.RetailX exists to help the retail professional navigate the complex world of multichannel retail.We offer the data,analysis and authoritative insight needed to build successful and
271、 profitable businesses.Our meticulous research encompasses data from ecommerce and trade associations,with national and European government data,our own research and other sources.Also join our exclusive webinars for up-to-the-minute updates on the performance of ecommerce markets and sectors.Better
272、 yet,all this information is free to retailers-just sign up using your work address to get started.Country Level Market AnalysisRetailX Country and Regional Reports zoom in on the state of ecommerce in more than 20 of the most prominent B2C markets around the world.From ecommerce trends,to unique ca
273、se studies with leading retailers;each report is jam-packed with the key analysis required to triumph in any given ecommerce territory.Sector Insight ReportsOur Sector Reports combine in-depth company performance research with analysis of sector dynamics to equip retailers with a lucid understanding
274、 of the current state of key industry segments-including financials,performance and market context.Exclusive WebinarsJoin leading figures in world ecommerce,senior retailers and our team of researchers as we delve into the world of ecommerce;including how its performing at a county and a sector leve
275、l,as well as discussing important concerns facing retailers.All previous webinars are now available to watch on-demand.34|RetailX|July 2023 RXSBC23RP 2023 Global beauty Sector report 2023|coNcluSIoNreSearcH:research analyst Anna Segarra FasFor questions about our research and to send feedback,please
276、 email the team via research Director Martin Shawceo Ian JindaleDItorIal:editor Emma Herrodproduction editor Gary TippManaging editor Jonathan WrightDeSIGN:art editor Mike Clarkcover Design Freny AntonyMarKetING:Marketing and circulation Addison Southam SaleS:commercial Director Andy James Group cre
277、ative Solutions Director Marvin Roberts This report may not be stored in a retrieval system,distributed or sold in whole or in part without the publishers express permission.Fair quotation is encouraged,with a link to the reports URL on RetailX.net.All charts and figures marked with RetailX 2023 are
278、 provided under the Attribution-NoDerivatives 4.0 International(CC BY-ND 4.0)license(https:/creativecommons.org/licenses/by-nd/4.0/).You are welcome to use these in full with a link to this report,retaining the copyright notice RetailX 2023This report is based upon our reasonable efforts to compile
279、and analyse the best sources available to us at any given time.Opinions reflect judgment at the time and are subject to change.retailX at Internetretailing Media Services ltd 27 Clements Lane London,EC4N 7AETel:+44(0)20 7062 2525Printed in Great B ConclusionThe beauty&cosmetics sector is growing aro
280、und the world.The Chinese beauty&personal care market is predicted to grow by above 5%each year until 2027 while in the US online is forecast to continue running above 30%of all beauty sales.Economic uncertainty makes it even more important for companies to concentrate on what they can control and h
281、ow they engage with existing customers and attract and convert potential new ones.All areas that are entirely within their skills and capabilities.Digital opens lots of opportunities for brands and retailers to engage and interact with consumers and help them make a purchase.What companies choose to
282、 do with the different technologies and how they use them for the benefit of their customers and themselves is where the magic in this industrylies.We hope that you have found this RetailX research and analysis to be of interest and commercial value and would be very pleased to hear from you with questions,suggestions or comments.In particular,we would like to hear about any areas you think should be included in the 2024 report.Please get in touch with us via Emma Herrod,Editor