- Beauty is a key growth category for Amazon, having greatly expanded its number of brands sold.
- By expanding its indie beauty category, Amazon has appealed to more shoppers.
- The efforts are paying off: Beauty was one of the top performing categories on Prime Day 2021.
Amazon is taking on Ulta Beauty and Sephora in an effort to become the go-to destination for online beauty and personal care purchases.
The e-commerce giant has doubled down on the category in recent years, with a concerted push to sell a wider array of prestige and indie beauty brands as well as debuting exclusive partnerships with celebrities like Lady Gaga.
Its efforts are now paying off. Beauty has become one of the company's fastest-growing business segments and was one of the best-selling categories on Prime Day 2021 last week, according to Amazon.
Beauty products were so popular during the annual shopping holiday that it was the second biggest category impacted by out-of-stock items after Amazon-branded devices like Kindle and Alexa, according to a survey conducted by Blue Yonder.
Despite its relatively recent focus on beauty, Amazon believes it is "uniquely positioned to reinvent" the experience of buying cosmetics and personal care items online, while capitalizing on a global beauty market that is expected to reach $463.5 billion by 2027, up from $380.2 billion in 2019, according to Allied Market Research.
"In general, and beyond Amazon, consumers are increasingly shopping for beauty products online," Amazon said in the statement. "And, beauty [e-commerce] is ripe for innovation, not only in terms of how products are discovered and presented on the web, but also in terms of selection and convenience."
According to Yoni Mazor, chief growth officer and cofounder of the technology company Getida, beauty and personal care will continue to be an especially lucrative sector for Amazon, particularly given the need for replenishment.
"Beauty products are well known to be great for repeat customers," Mazor told Insider. "Amazon has also built automation when shoppers can subscribe and save money on the price they pay for the products they repeatedly buy, so Amazon is able to generate automatic revenue once their shoppers are hooked."
Part of Amazon's success with beauty is its focus on appealing to wider audiences by broadening the types of products it sells. Such efforts have included its indie beauty store, first launched in 2018, which features more than 500 emerging brands and spotlights black-owned businesses.
The indie beauty store came on the heels of the launch of specialty online-only stores like the salon and spa and professional skin care stores in 2017, as well as the premium beauty store in 2013. "We remain focused on increasing our selection, adding new content, features, and functionality to make shopping for beauty products even easier and more enjoyable for our customers," Amazon said.
During the pandemic, beauty retailers like Sephora and Ulta found success in virtual technology tools, with features like Ulta's Glamlab which allows shoppers to try on makeup digitally from home. Amazon has similarly leaned into virtual makeup try-on, using artificial intelligence to allow shoppers to test different products.
According to Wendell Lansford — cofounder of the marketing technology firm, Wyng — such technology is helping Amazon win over beauty customers, alongside the company's ability to meet the rapidly evolving needs of shoppers around areas like customization.
"There's informational overload stemming from social media, so advertising must be incredibly specific to break through the noise," Lansford told Insider. "These factors, combined with convenience of getting products shipped quickly and directly to their door, will ultimately win them over. Companies that are able to deliver this will become a go-to destination for beauty products."
