Retail expert: Amazon has ‘clear ambitions’ in beauty

By Kacey Culliney contact

- Last updated on GMT

Amazon's unique selling point, convenience, puts it ahead of the rest in a competitive space (Getty Images)
Amazon's unique selling point, convenience, puts it ahead of the rest in a competitive space (Getty Images)

Related tags: Amazon, e-commerce, retail, omnichannel, UK beauty

E-commerce giant Amazon has clear ambitions to rise fast in the beauty world which creates plenty of opportunities online and offline for brands in the category, says a retail expert.

In 2019, UK e-commerce generated an estimated €90.8bn, making it the third largest e-commerce market in the world behind China and the US and the largest in Europe, according to data and insights firm Edge by Ascential. Amazon represented the lion’s share in the UK, holding a 30% share of the market, and Florence Wright, retail analyst at Edge by Ascential, said it was fast becoming one to watch in beauty and personal care.

‘Watch out’ – Amazon pushing fast into beauty space

“Amazon has got clear ambitions in this space – that’s a ‘watch out’ for retailers and an opportunity for brands to really drive their presence on the platform,”​ Wright told CosmeticsDesign-Europe.

“…Although we haven’t seen them fully take over this space yet, it’s definitely something that brands and retailers need to be aware of going forward.”

Amazon’s stand-out unique selling point – convenience through its fast, free delivery service – put it ahead of the pack, Wright said, and it was heavily invested in innovation in the beauty space.

In March, this year, the e-commerce giant launched its own-brand skin care line Belei​ – 12 products designed to meet the most common consumer demands searched for and mentioned in reviews by shoppers on its website. Amazon also teamed up with beauty major L’Oréal this year to launch Modiface​ – an artificial intelligence-powered technology to enable virtual try-ons of cosmetics.

“Amazon has definitely been really pushing into the health and beauty category more over the past few years, not just in the UK but particularly in the US where they’ve been focusing a lot of their investment,” ​Wright said.

Amazon was also clearly invested in creating an “online experience” ​for beauty shoppers through various technologies, including augmented reality and artificial intelligence, she said.

For traditional retailers in beauty, the likes of Boots, Superdrug and independent pharmacies, she said Amazon was a threat in terms of its scale and ability to invest in ‘test and learn’ initiatives. But for brands and manufacturers in the space, she said the e-retail giant’s rise in beauty presented clear opportunities.

Beauty on Amazon, collaboration with competition

Amazon’s online platform offered a strong target for beauty brands to sell on and companies had to up investments in digital and online strategies, Wright said.

In addition to this, brands also had to consider collaboration with competing traditional retailers, she said. “Some of the legacy store-based retailers are really upping their game in omnichannel, like Boots. In terms of their results, they’ve not been posting the best results, but they’re undergoing this transformation at the moment, and digital is a part of that.” ​The bricks and mortar retailer had, for example, launched an app to digitalise its prescription service and had introduced fast-track lanes for ‘click and collect’; working to make things “more convenient and seamless between offline and online”.

Beauty brands, she said, could collaborate with and “help these store-based retailers”​ push forward in omnichannel offerings in the face of rising Amazon competition.

In the US, Birchbox had partnered with Walgreens on in-store inserts, for example, she said.

“Brands can help retailers in terms of their omnichannel and e-commerce ambitions because they’re experts in this space and can help drive the whole experience.”

Beauty definitely ‘one of the most exciting’ retail categories

The future of beauty retail, Wright said, would see lots more retail-brand collaboration – offline and online – and plenty of change.

“We track different categories for retailers, and health and beauty specifically is one of the most active in terms of initiatives, and consumer spend is growing very rapidly in this category. So, as an outlook and as a category to monitor, it’s definitely one of the most exciting and where we expect to see a lot of transformation going forward.”

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