Last year I wrote a blog on the rise and rise Amazon, highlighting how the online e-commerce giant was essentially stealing the show when it comes to retail. From distribution and company profiling to top-notch product creation, Amazon has got bricks and mortar retailers shaking in their boots. And they’re not just shaking in their boots, they’re falling left, right and centre. With a record number of bankruptcies and stores closures in the US – the face of retail as we know it is changing, and its undeniable that Amazon has had a large hand to play in this change.
However, there seems to be one industry that’s bucking this trend, and that’s our very own beauty. Far from falling by the wayside, the cosmetics, skincare and beauty markets are enjoying a boom with increased footfall reported in high street stores. And, according to Inkwood Research, the market is set to grow even further, reaching $750bn by 2024. So what’s the first factor making our market stand strong? Well, we have to give credit where credit is due, with the beauty market being a touch-feel industry, buyers are loathe to lose that one on one connection with their product. Consumers want to try before they buy, get a feel of that creamy concealer, ensure that red lipstick suits their skin tone and feel the thickness of the latest must-have moisturizer.
Savvy retailers such as Sephora also have a large part to play in challenging Amazon’s dominance. On-the-ball marketers have not only adapted and evolved to meet the needs of Millennial and Gen Z consumers, they are outpacing Amazon due to offering experiential experiences that only bricks and mortar stores could offer – the one offering online stores just can’t compete with.
However, ironically, it’s the rise and rise of social media that is having a hand in boosting high street beauty retail. Social media activity from savvy retailers has helped protect the sector from falling prey to Amazon, while online influencers have also, ironically, become the saving grace of high street beauty with consumers trusting these online celebrities and, as a result, heading instore to make their purchases. A recent Beautycon event was said to have attracted tens of thousands of beauty buyers due to its Instagram promotion ahead of the event, while Saks Fifth Avenue’s New York flagshop store has just unveiled a new and improved beauty floor that has been expanded by 40 percent and encompasses more experiential offerings.
Of course, Amazon hasn’t got to where it is by stepping back from a challenge, and has this month launched an Indie Beauty Shop that will sell beauty brands not already sold in stores such as Walmart, Ulta and Target – an interesting move to try and take a slice of the beauty pie. However, it seems that there is discomfort amongst the brands about whether to allow their products to be sold via the site. According to reports some independent beauty companies fear being lost in the crowd, while also being uneasy about the ongoing trend for discounting from unauthorized sellers.
So while the Amazon counterattack to try and win back one of the only industries withstanding its Goliath stakehold is admirable, it’s fair to say that we’re giving this one to David. And we do love an underdog…