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Keith Anderson

Amazon: Beauty is in the eye of the consumer

When online shoppers make you their #1 destination for beauty products, what do you do to leverage your leadership position and boost sales even further? That’s the question faced by Amazon, which made a big splash in March by launching its first live show, known as “Style Code Live,” which provides viewers with fashion and beauty tips that are designed to inspire them to make online purchases.

The show, a 30-minute program that’s streamed live during weekdays, is offered free to all viewers, features no advertising as of now, and enables viewers to shop for corresponding products in a gallery adjacent to the video player. The launch of “Style Code Live” underscores the importance Amazon places on the fashion/apparel and beauty categories. As far as the beauty category is concerned, Amazon ranks number one as the leading destination for online beauty products (with 73% of shoppers stating that Amazon was their most frequently shopped beauty site).

Considering that eCommerce sales now account for 6-8% of the $32 billion spent annually on beauty products in the US, Amazon is targeting a lucrative market, and is using the show as a testing ground for additional live offerings in different product categories in the near future. In particular, with “Style Code Live,” Amazon may be creating an interactive prototype that allows viewers to participate live online by giving them the opportunity to chat and provide their personal perspective on the advice dispensed during the show.

Luxury sales are at the center of the eCommerce (and Amazon) experience

Indulging oneself with a luxury brand has long been a key factor in the beauty category, and this holds true for online beauty sales as well.

Chance Wales, Amazon’s director of beauty and health & personal care, described how Amazon’s Luxury Beauty store has been dedicated to serving the luxury-minded consumer since its launch in 2013: “We know that our beauty customers are searching for luxury brands on Amazon. We’ve worked hard to create a single destination that showcases luxury beauty collections and makes it easier than ever for customers to explore these brands, follow trends and develop their beauty regimens.

But, per Wales’ statement, how many consumers are actively “exploring,” and how many are simply reordering products they know and trust?

According to A.T. Kearney research, 53% of online beauty shoppers fall within the segment Kearney labels as “Creatures of Habit,” who are basically replenishment shoppers. The Kearney report, Beauty and the eCommerce Beast, describes these shoppers as follows: “[The segment] comprises shoppers who know what they want and are comfortable with online replenishment. They are motivated by convenience and price and visit their ‘go-to’ sites regularly, rather than exploring the web for ideas. Since it represents loyal consumers who repeatedly shop for the same items, this segment is extremely important to brands.

Joelle Kaufman of BloomReach, a search applications provider, describes the mindset of this type of consumer: “People will go to Amazon to buy something that they regularly buy, because it’s convenient: ‘I don’t need to go into the store to buy my hand cream.

The dynamic lends itself perfectly to Amazon’s search function, an area where Amazon dominates retail eCommerce, as evidenced by the fact that 44% of consumers start their retail product searches on Amazon, tops in the industry.

Or, if consumers don’t want to manually reorder and/or search every time they want to repurchase the same product, they can subscribe to a replenishment program. Kearney reports that 38% of beauty shoppers stated they subscribe to at least one replenishment program such as Amazon Subscribe & Save.

But experiential products are also in the eCommerce (and Amazon) mix

Kaufman’s perspective is not shared by all. Kearney, for example, divides shoppers into a second segment, “Online Enthusiasts,” who comprise 31% of the survey total, and who not only replenish online, but actively seek out and purchase experiential products such as fragrances and color cosmetics.

Amazon is making an aggressive investment to leap to the front of the pack here as well. By achieving the same level of success in product discovery, where it helps shoppers find products they didn’t even know they wanted, Amazon seeks to duplicate the dominance it enjoys in search. As part of this effort, look for adoption by Amazon of the augmented/mixed reality tools pioneered by beauty retailers such as Sephora that enable shoppers to “try on” products digitally before making the decision to buy them. When a shopper uses an experiential app where she can see onscreen what a particular type of makeup looks like on an image of her face, she feels much more comfortable hitting the “Buy” button.

Still, even with the upsurge in online sales sophistication and purchasing volume, Amazon’s brick-and-mortar foes are formidable. For one thing, more than 90% of all beauty sales are still made in-store. One reason is that even with innovations such as augmented reality, it’s still difficult for online retailers to duplicate the appeal of in-store beauty product shopping, where consumers can see, touch and smell the merchandise. Stephanie Wissink, an analyst at investment bank Piper Jaffray, compares a satisfying in-store experience to “a good glass of wine. You can find yourself in your own space for a period of time. That 15 minutes is glorious.

And yet, even the merits of this type of experience are not beyond debate. Kosha Gada, a principal at Kearney states “People actually enjoy the experience of [shopping online/Amazon] more. People prefer it to shopping in stores, where they feel there is maybe too much sensory overload or there are salespeople pushing things on them or spraying fragrances on them.

Optimizing your content is critical to beauty product success

In place of being subjected to “pushy” in-store salespeople, online shoppers can gather product information and begin to formulate their buying decisions in the privacy of their homes, or wherever they happen to be accessing online sites such as Amazon.

As Gada states, “There are so many how-to videos and peer reviews and so much information [to review] before you get to the final step of click and purchase. That means that both brands and retailers have to operate more and more like media companies, because they have to understand content and storytelling much more than before. So content strategy has become a key competency that brands and retailers have to have, because there’s such a touch-and-feel element to it.

The key question, then, is what are brands doing to optimize their content for beauty merchandise they sell online - on their own sites and on e-retailers such as Amazon?

First and foremost, successful brands are focusing on search performance. Well-informed brand teams understand the key words shoppers use when searching for the brand’s products. Amazon’s role in the process is especially compelling when one compares its standing as the place where 44% of consumers begin their retail product searches to the 34% figure for leading search engines such as Google, Bing and Yahoo! and the 21% for specific brands or retailers.

As part of the search strategy, brands place a top priority on ensuring product titles, bullet content and long descriptions or stories include the keywords as part of a naturally-flowing copy. For example, the manufacturer of retractable waterproof eyeliners must be sure their keywords communicate the product attributes and benefits in the most compelling way possible.

Leading brands also seek to consistently optimize product titles and primary product images. Since these are the only elements the shopper will see on result and category pages, they need to stand out and be noticed. The rule of thumb is that primary product images should be high resolution shots that provide clarity and visual product appeal. With variations of colour and texture so critical to the buying process, special care must be taken to accurately replicate onscreen how the product looks and what it does.

Mark White, President of Content26, a strategic content provider for consumer brands, sums up the necessity of optimization by posing the questions: “Does the content have good images, not just a certain number of images, but…[high] resolution images? Is the product page optimized for page load time? Amazon is very strict about that. Is the title optimized with a certain number of characters in the character count so that it can be optimized for mobile?

And the winners are…

So which beauty brands are doing the most successful job of optimizing their content and driving online sales? Who are the most worth emulating in the quest to maximize market share? A quick look at the Amazon Beauty FastMovers 100, produced by Profitero, reveals the following brands have the most products among the top 100 sellers on Amazon in the US and UK:

Different directions: one goal

The meticulousness of content preparation for presentation on Amazon forms an interesting counterpoint to the “free-flowing” content on Amazon’s streaming “Style Code Live.” But whether one is using bullet points to communicate the benefits of pore cleansing healing clay, or product placing an aroma therapy oil diffuser on a live show where viewers can expound on its virtues, both types of communication are cut from the same cloth (to borrow a phrase from the fashion playbook). They are two means to the end of making the sale on Amazon, the online selling platform where beauty truly is in the eye of the consumer.

Keith Anderson
VP of Strategy & Insights, Profitero

© 2016 - Premium Beauty News - www.premiumbeautynews.com
about Keith Anderson
Keith Anderson

Keith Anderson is VP, Strategy & Insights at Profitero, where he helps global companies gain a deeper understanding of their online presence to optimize online and in-store sales. Anderson has advised leading retailers and CPG companies including Walmart, Target, Best Buy, P&G, Unilever and Coca Cola.

Web site: www.profitero.com

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