Starting on October 4th and ending October 25th the Online Retail Giant Amazon plans to hook new buyers in Health & Beauty. This information was sent to advertising partners and marketing firms. Surprisingly, not brand owners selling in Health and Beauty. Most brand owners are learning about it now. This is an effort for Amazon to expand its share of the $500 BILLION per year market.
Of course we should all know about this, right?
A slide deck Amazon sent to select beauty brands said the company is currently planning the event for Oct. 4-25. The same information was sent to some consulting firms that help manage businesses on Amazon.
“We want to draw customers back to Amazon during Black Friday week but also long term with additional marketing levers,” Amazon wrote in the slide deck. “This is a unique opportunity for selected brands to reach both more shoppers and new customers.”
Catie Kroon, an Amazon spokesperson, confirmed the authenticity of the document. She told CNBC by email that the event next month will be called “Holiday Beauty Haul” and added that the site will feature a number of product types, including fragrance, men’s grooming and winter skin care.
Amazon, the world’s largest online retailer, has long been trying to gain a bigger share of the global beauty market, which generates $500 billion in annual sales. The company began offering health and beauty products in 2000, but its selection was initially limited mostly to mass-market brands.
The beauty market is of particular interest now, as consumers have flocked to the web to buy makeup and personal care items during the pandemic. Online makeup sales surged 40% in 2020 from a year earlier, while sales of “self-care” items such as shampoo, face wash products and lotions climbed 59%, according to market research firm 1010data.
Amazon hopes to use the event to drive traffic to upcoming holiday promotions, said one consultant, who had discussions with Amazon and asked to remain anonymous because the talks were private. The company began reaching out to beauty brands and consulting firms in mid-August to gauge participation in the event, said Jed Rawson, CEO of e-commerce consulting agency Pirawna.
While largely stuck inside during the 2020 holiday season, Americans spent a record amount of money from their devices, according to Adobe Analytics. U.S. online purchases during November and December surged 32.2% from a year earlier to $188.2 billion, Adobe said.
In recent years, Amazon has expanded its “premium beauty” subcategory to include more high-end products and launched an indie beauty store to highlight new and emerging brands. It also rolled out specialized hair care sections and its own skin care brand.
Kroon said beauty is one of the fastest-growing categories on Amazon and that it’s “ripe for innovation” when it comes to product discovery and presentation. Amazon is “uniquely positioned to reinvent” the experience of buying beauty products online, she wrote.
The October event could also help Amazon better compete with retailers such as Ulta Beauty and LVMH-owned Sephora, said Elaine Kwon, who previously served as a vendor manager in Amazon’s fashion category and now runs Kwontified, an e-commerce management and software company. Department stores are increasingly losing share in the beauty market to Ulta, Sephora and direct-to-consumer brands such as Glossier and ColourPop.
Kwon said Amazon has tried to boost its market share by featuring more leading brands on its site and experimenting with features such as a “clean beauty” tag, which taps into trends around natural and sustainable products.
“Sephora and Ulta have very, very successfully protected their customer base,” Kwon said. “This is Amazon’s way of trying to reach out to those customers and give them a great experience that makes them think, ‘Maybe I don’t have to go to Sephora for all of these things, maybe I can go to Amazon for this or that.’”
Health and Beauty is a competitive category. Heck, really beauty products can be competitive. There are some broad phrases that we’ve been known to bid as high as $64 per click just because of how valuable those words are to organic ranking.
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