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The Top Five Trends Fueling Global Beauty Purchases

Published March 15, 2022
Published March 15, 2022

The beauty industry has become the most digitally sophisticated retail vertical in e-commerce today. With e-commerce sales predicted to account for nearly half of all beauty purchases in the US in 2022, and global penetration to grow to more than 27% within the next three years, brands are now fully embracing new channels and formats for reaching a wider audience. Consumers of all ages aren’t limiting themselves simply to buying local brands either—more and more beauty shoppers are discovering and buying products from outside their home country. Brands and retailers must be prepared to leverage the macro trends that will continue to propel global DTC sales in cosmetics, skincare, and fragrances.

Here are the top trends leading the global beauty boom:

Millennials and Gen Z Lead the Way: According to ESW’s Global Voices 2022 survey of 14,000 shoppers in 14 countries, the number of DTC beauty consumers shopping outside their home countries increased across all age groups between December 2020 and July 2021. Younger Millennial and Gen Z consumers are driving this trend, with the data showing that they are buying significantly more from outside their home countries than Gen X and nearly twice the rate of Baby Boomers. 

Even among those consumers who prefer to purchase beauty, fragrance, and skincare in person, a majority of in-store purchases begin with online discovery. Online product discovery driven by younger consumers using platforms such as YouTube and TikTok ignite curiosity and then often drive direct purchases through Instagram or Facebook. 

Social Commerce Continues to Grow Globally: According to ESW’s July 2021 survey, 47% of shoppers made a purchase via a social media channel, with Gen Z (55%) and Millennials leading the way. Even so, social selling, which is defined as encompassing the consumer’s entire shopping journey, from discovery to checkout, has a way to go in the West compared to China. While Accenture has found that social commerce will grow three times as fast as e-commerce by 2025 (to $1.2 trillion), Beauty Matter reports that McKinsey estimates sales from the full range of social selling in China (including livestreaming) are ten times higher than in the US. Livestreaming is still in its infancy in the West, but it promises to catapult the beauty industry’s digital sales to even greater heights in the next few years. According to Coresight Research, the US livestreaming market is estimated to top $25B by next year.

Omnichannel Is Here to Stay: Seventy-one percent of shoppers in ESW’s recent survey said that they would continue to purchase via a mix of digital and physical channels as COVID restrictions eased. Stores no longer serve solely  as the end point in the supply chain; they have taken on roles as branded experiences, fulfillment hubs, and try-on centers. This highlights the importance of omnichannel capabilities in retailers’ international commerce strategies. Shoppers have come to expect services like click and collect, ship from store, and return to store, no matter where they are shopping from.

AR and VR Merge Physical and Digital Experiences: To continue to drive increased online sales, many DTC brands and retailers are implementing new augmented reality technologies, both online and in-store, to help them bridge the gap between physical and digital. In the last year, in-store and online shopping experiences have converged with an explosion of options for virtual video appointments, chat consultations, augmented reality, and personalization services. Fast-growing vegan cosmetics brand Tarte Cosmetics offers virtual try-on on its website to ensure shoppers “never buy the wrong shade again.” MoneyWeek notes that in 2018, L’Oréal bought AR and VR-focused start-up ModiFace, whose software enables consumers to “try on” anything from color cosmetics to hair color through L’Oréal’s brand apps as well as those of their retailers. Ulta’s app allows its customers to try on anything they sell virtually as well as providing personalized recommendations.

Sustainability Is Critical to Consumers: The Gen Z consumer is vocal about their concern for the planet and is demanding more transparency around sustainability from retailers and brands.  They want ethical, cruelty-free beauty products with clean and sustainable ingredients, but also a reduction in plastic packaging and overall environmental impact. As cross-border e-commerce continues to elevate economies all over the world, we must ensure that what’s good for business is also good for the planet. To enable our retail clients to make this promise in every market they sell into, ESW provides 100% carbon-neutral shipping to our partner brands, including first, middle, and last-mile delivery anywhere in the world. 

Beauty brands must adapt to new methods for engaging consumers, no matter where they live in the world. Forty percent of global health and beauty shoppers in ESW’s recent survey said that they preferred online shopping over in-store. With Gen Z and Millennial consumers proving to be both channel and border agnostic, while still expecting that their brand experiences will align online and in-store, it’s more important than ever for beauty brands to embrace a global approach to their DTC omnichannel businesses.