US Evolving eCommerce: Beauty Retailing Market Report 2020
“Disruptions to consumers’ lifestyles caused by the pandemic, combined with the recession, have created challenges for the beauty industry. Consumers are re-evaluating their beauty needs and limiting nonessential spending overall.

US Evolving eCommerce: Beauty Retailing Market Report 2020

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Report Summary

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Providing the most comprehensive and up-to-date information and analysis of the Evolving eCommerce: Beauty Retailing: Incl Impact of COVID-19 – US market including the behaviours, preferences and habits of the consumer.

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What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

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The shift to consumers’ beauty routines caused by the pandemic has created challenges for the total beauty category; however, the online space presents opportunities for growth. Enhancements to the online shopping experience such as the use of virtual tools and social commerce, along with increased usage of video content, will keep shoppers engaged in the category. As consumers continue to adjust to the next normal, beauty brands and retailers will look to bring more of the in-store experience online. Mintel anticipates growth online to continue, although it won’t offset the declines in total beauty.

Expert analysis from a specialist in the field

Written by Alexis DeSalva, a leading analyst in the eCommerce sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Disruptions to consumers’ lifestyles caused by the pandemic, combined with the recession, have created challenges for the beauty industry. Consumers are re-evaluating their beauty needs and limiting nonessential spending overall. While the total beauty category will continue facing challenges, the online channel represents growth opportunities for the market. Features such as virtual discovery and trial tools, video tutorials and shoppable social content have become more common across the industry and will drive engagement and selling opportunities moving forward.
Alexis DeSalva
Senior Retail and eCommerce Analyst

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
          • COVID-19: Market context
            • Economic and other assumptions
            • Executive Summary

                • Top takeaways
                  • Market overview
                    • Outlook on total beauty retailing: decreased use and limited spending will cause declines
                      • Figure 1: Total US retail sales and forecast of beauty products, at current prices, 2015-25
                    • Outlook on online beauty retailing: despite changing beauty needs, beauty has growth potential online
                      • Impact of COVID-19 on online beauty retailing
                        • Figure 2: Short-, medium- and long-term impact of COVID-19 on online beauty retail, November 2020
                      • Opportunities and challenges
                        • Interest in shopping online is growing, but in-store remains the dominant channel
                          • Offering reassurance and flexibility will reduce hesitation and unlock purchase opportunities
                            • Consumers’ disrupted beauty routines, and value-seeking behavior will shift brand preferences
                              • Use social content to drive awareness and maintain engagement
                              • The Market – Key Takeaways

                                • Consumers are shifting purchases online, but beauty will still face growth challenges
                                  • Consumers’ lifestyles have changed and so have their beauty needs
                                    • Diverse representation in beauty is required to meet diverse needs
                                    • Market Size and Forecast

                                      • Total beauty retail will decline due to decreased use and limited spending
                                        • Figure 3: Total US retail sales and forecast of beauty products, at current prices, 2015-25
                                      • Online shifts indicate opportunity for digital growth in beauty
                                        • Macroeconomic data
                                          • Figure 4: Consumer confidence and unemployment, 2000-October 2020
                                        • Impact of COVID-19 on online beauty retailing
                                          • Figure 5: Short-, medium- and long-term impact of COVID-19 on online beauty retail, November 2020
                                        • Lockdown
                                          • Re-emergence
                                            • Recovery
                                              • COVID-19: US context
                                                • Learnings from the last recession
                                                • Market Factors

                                                  • Cash-conscious shoppers will limit spending to the essentials
                                                    • Consumers demand diverse beauty options
                                                      • Figure 6: Number of households, by race and Hispanic origin of householder, 2009 and 2019
                                                    • Technology enables consumers to shop safely and stay engaged
                                                      • Figure 7: Sephora “brow styling: 101” tutorial, June 2020
                                                    • A clean and conscious focus for beauty shoppers
                                                      • Figure 8: Ulta clean beauty discussion, October 2020
                                                  • Market Opportunities

                                                    • Consumers want to see themselves in beauty messaging
                                                      • Expand product offerings to meet consumers’ needs
                                                        • Figure 9: LoveSeen “Find your fit” quiz, October 2020
                                                      • Make it personal with flexible options that add value
                                                        • Figure 10: Prose customized product example, August 2020
                                                      • Add value through flexible shopping options
                                                        • Appeal to the conscious consumer through a focus on DEI
                                                          • Figure 11: Thrive Causmetics charitable support, June 2020
                                                        • Social media is now a shopping hub
                                                          • Figure 12: Various beauty brands on Instagram Checkout, October 2020
                                                      • Competitive Strategies

                                                        • Using technology to create safer shopping
                                                          • Figure 13: Benefit brow try-on virtual tool, July 2020
                                                        • Video content and influencers appeal to younger generations
                                                          • Figure 14: Brickell everyday skincare routine, January 2020
                                                        • Targeted innovation through gaming
                                                          • Figure 15: MAC x The Sims partnership, June 2020
                                                      • The Consumer – Key Takeaways

                                                        • Most are shopping beauty online, but in-store is dominant
                                                          • Reassurances are needed to drive purchases and engagement
                                                            • Social media is a critical part of the online shopping experience
                                                            • Consumer Trends Impacting Online Beauty

                                                                • Technology
                                                                  • Value
                                                                    • Identity
                                                                      • Rights
                                                                        • Wellbeing
                                                                        • Shopping Method and Online Activity

                                                                          • In-store is the top shopping method, but most beauty consumers shop across channels
                                                                            • Figure 16: Shopping method, August 2020
                                                                          • Most consumers begin and end their shopping in the same channel
                                                                            • Social shopping/content gives younger generations the best of both worlds
                                                                              • Figure 17: Shopping method and online activity (NET) – by generation, August 2020
                                                                            • Online is a destination for pre-purchase activity
                                                                              • Figure 18: Online activity, August 2020
                                                                          • Activity by Item

                                                                            • No matter the item, most purchases involve online activity
                                                                              • Figure 19: Activity by item, August 2020
                                                                            • Reading reviews online factors in to all types of beauty purchases
                                                                              • Figure 20: Select activity by product, August 2020
                                                                            • Online is a vehicle for product discovery
                                                                              • Figure 21: Beautyque NYC virtual store, September 2020
                                                                            • Different ages experience different online journeys
                                                                              • Figure 22: Activity by item – select items, by age, August 2020
                                                                          • Purchase Considerations

                                                                            • Shoppers seek free reassurance before buying
                                                                              • Figure 23: Macy’s x DoorDash, October 2020
                                                                              • Figure 24: Purchase considerations, August 2020
                                                                            • Loyalty programs still appeal to women
                                                                              • Figure 25: Purchase considerations, by gender and age, August 2020
                                                                            • Younger shoppers want to make it their own
                                                                              • Convenience is a bigger consideration to Black consumers
                                                                                • Figure 26: Purchase considerations – NET, by race, August 2020
                                                                            • Brand Engagement

                                                                              • Accessible, affordable brands are piquing interest of young adults
                                                                                • Figure 27: Brand engagement – NET, August 2020
                                                                                • Figure 28: Select brand engagement – NET, by gender and age, August 2020
                                                                              • Affluent young adults engage with digitally native, buzzy brands
                                                                                • Figure 29: Select brand engagement, by age and HHI, August 2020
                                                                              • Hispanic beauty shoppers like to explore brands
                                                                                • Figure 30: Select brand engagement, by Hispanic origin, August 2020
                                                                            • Online Content

                                                                              • Shoppers value each other’s opinion
                                                                                • Figure 31: Online content, August 2020
                                                                              • Interest in ingredients spans generations
                                                                                • Figure 32: Top claims in skincare, January-November 2020
                                                                                • Figure 33: Online content, by generation, august 2020
                                                                              • Young women want to know what to buy, and how to use it
                                                                                • Figure 34: Marc Jacobs Fragrances virtual party launch, August 2020
                                                                                • Figure 35: Online content, by gender and age, August 2020
                                                                            • Preferred Resources and the Role of Social Media

                                                                              • Category experts are highly sought
                                                                                • Figure 36: Preferred online resources – NET, August 2020
                                                                              • Social media is a catch-all resource
                                                                                • Figure 37: Social media use, August 2020
                                                                              • Visual content completes the experience for younger generations
                                                                                • Young women want to turn inspiration into reality
                                                                                    • Figure 38: U Beauty shoppable Instagram content, October 2020
                                                                                  • Young men engage in video-based content
                                                                                      • Figure 39: Jack Black Skincare – “evening routine” video, September 2020
                                                                                    • Hispanic shoppers trust input from peers/other shoppers
                                                                                      • Figure 40: Preferred resources and social media use – by Hispanic origin, August 2020
                                                                                  • Attitudes toward Beauty Online

                                                                                    • Disinterest with shopping in-store benefits online shopping
                                                                                      • Figure 41: Attitudes toward beauty online, August 2020
                                                                                      • Figure 42: Kiehl’s virtual skincare expert example, April 2020
                                                                                    • Beauty consumers appreciate the adventure of shopping online
                                                                                      • Figure 43: Attitudes toward beauty online, by gender and age, August 2020
                                                                                    • Conscious consumers expect a stance on social issues
                                                                                      • Figure 44: Attitudes toward online shopping, by select demographics, August 2020
                                                                                  • Desired Improvements

                                                                                    • Reassurance drives engagement
                                                                                      • Figure 45: Desired improvements, August 2020
                                                                                    • Younger beauty consumers want an evolved, personalized experience
                                                                                      • Figure 46: Desired improvements, by age, August 2020
                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                    • Data sources
                                                                                      • Consumer survey data
                                                                                        • Abbreviations and terms
                                                                                          • Abbreviations

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