The $430bn global beauty market is at the vanguard of innovation in e-commerce. From experimenting with video content to addressing consumer concerns about wellness, sustainability and diversity, brands are becoming skilled at selling personalized products in a virtual world.
Debuting with a report on Beauty & Personal Care published today, Category Insights is a new series from WARC Digital Commerce exploring the current state of a category from the perspective of the retailer, the consumer and the brand.
Gregory Grudzinski, Report Editor, WARC Digital Commerce, says: “In the virtual world of digital commerce, the Beauty & Personal Care category is a hotbed of marketing innovation. Successful brands are going beyond helping consumers improve their appearances to helping them discover and reveal their authentic selves.
“In this report we shed light on trends in this space, such as premiumization and the outsized influence Gen Z shoppers have on the category. We also look at top performers and share gainers to help understand how the top brands plan to stay on top, and how challenger brands are looking to unseat them.”
- Beauty & Personal Care category is recession resistant and growing
In 2022, the global beauty market, encompassing beauty, personal care and fragrance, generated $430bn in revenue, and is forecast to grow 6% annually to reach $580bn worldwide by 2027, according to McKinsey. Largely resistant to inflationary pressures, only 13% of US consumers have reduced spending on personal care items in the past 12 months.
Also in 2022, e-commerce became the beauty category’s leading channel, claiming nearly a quarter (21%) of sales.
- Category leaders increase paid retail media investment to stay ahead of competition
Analysis of WARC’s dComm Index, in conjunction with Perpetua’s sales estimates, found that in the US, brands including Maybelline New York, Lume and Versace are among the top category performers on Amazon. Their success has been underpinned by investment in retail media to increase paid share of voice (SOV) to stay ahead of their competitors.
In makeup and fragrance, 60% of the top selling brands increased paid SOV, with an average increase of 1.7% and 0.9%. The paid investment fueled an increase in organic share-of-voice in both makeup and fragrance of 1.6% and 1.2%, respectively.
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