Beauty and The E-commerce Beast: Tackling Y(our) Challenges

In this report, our beauty e-commerce experts explore the five main challenges that are forcing beauty brands to rework their e-commerce strategies, complete with solutions to overcome these challenges and succeed in beauty e-commerce.

5 Challenges Your Beauty Brand is Facing

Challenge 1: Elusive Loyalty 

While online sales are on the rise, customer loyalty is on the decline. Data shows that 52% of shoppers are more eager to discover new beauty products and brands than they were in pre-covid times. This is further compounded by the fact that 67% of consumers reported using four or more websites to fulfill their beauty and personal care browsing and shopping needs. The only platform that is bucking this trend is Amazon, with 69% of shoppers affirming they purchase beauty products regularly from them. 

To hook consumers and build a loyal community, start by leveraging user-generated content and listening to what your audience has to say.

Challenge 2: High Acquisition Costs

With a decline in customer loyalty comes a huge rise in acquisition costs. The increasing number of competitors bidding for the same keywords and seeking visibility, added to the lack of an omnichannel strategy, are making advertising more expensive—and acquisition costs on marketplaces are set to climb higher. In fact, CPC costs on Amazon have increased by 30% year-on-year since 2020.

Many strategies can help reduce acquisition costs, but a good first step is to leverage your first-party data.

Challenge 3: Contested Authenticity

Beauty brands are facing an authenticity scarcity. As mobile devices drive the majority of beauty online traffic, especially on social media, we’ve witnessed the birth of “well-informed consumers”. About 86% of them affirm they jump on social media to read and watch videos about beauty product recommendations from micro-influencers and beauty enthusiasts, as they trust their opinions. This can lead to customers questioning a product’s ingredients, ethical use and environmental impact.

A good way to reinforce authenticity is to collaborate with micro-influencers and boost social proof through video testimonials, ratings and reviews.

Challenge 4: Demand for Dialogue and Personalization

Beauty consumers demand dialogue, which sheds light on another great barrier for beauty brands: the lack of one-on-one, personalized in-store assistance where beauty advisors can guide customers in the selection of the perfect product. Beauty and cosmetics consumers expect the same level of attention, interaction and personalization when they shop online. In fact, 77% of young consumers say they prefer to shop through social media or live stream programs where real-time communication is possible.

If you offer livestream shopping experiences, consider including AR features that help enhance viewers’ experience and allow them to try the products on their own faces.

Challenge 5: Omnichannel Experience

While e-commerce is on the rise, it doesn’t mean beauty consumers have abandoned in-store shopping. Data show most online beauty shoppers fall into one of three groups: online enthusiasts (55%), who browse online and shop online; information seekers (36%), who browse online and shop in-store; and showroomers (9%), who browse in-store and shop online.

Overall, conversions are 60% higher for brands that facilitate hybrid shopping experiences. This means that brands need an omnichannel strategy to meet their customers everywhere on their journey.

The growing challenge of customer loyalty, the high costs of customer acquisition, the struggle of delivering a seamless experience between online and offline, the outbreak of live streaming shopping platforms and the increasing popularity of micro-influencers are all influencing the growth of beauty e-commerce businesses.

Download our report to find out more on how you can tackle these challenges.