How the Health and Beauty Industry is Performing in 2022
During the first half of 2022, there was a 12% growth in the volume of merchandise bought and sold by health and beauty merchants as compared to the first half of 2021. Health and beauty orders experienced an 11 percent surge between the first half of 2021 and 2022.
The average order value for health and beauty items had no considerable decline or increase from 2021 to 2022, despite it following a different pattern than observed in other categories.
Social platforms remain a dominant sales channel.
It is not unexpected that social media continues to be a leading sales method for health and beauty brands because the U.S. social e-commerce market is projected to reach more than $50 billion a year by 2023.
From 2021 to 2022, merchants in the health and beauty industry who offer their products on Facebook and Instagram saw an 83% boost in their year-over-year gross merchandise value (GMV) for the first half of the year. Examining the year-over-year orders, these sellers had an enlargement of 140% in the first half of the year, but the year-over-year average order value diminished by 24%.
Mobile sales experienced a slight change.
In spite of the common move towards mobile and social buying, our merchant statistics displayed that yearly orders dropped 6% in the first half of 2022, gross merchandise value sank 2%, but average order value increased 5% compared to the first half of 2021.
When looking at places for ordering, purchases made with the iPhone were far more successful than those made with an Android device.
From January 2021 to June 2021 of 2022, the health and beauty sector had a 3% development in gross merchandise value, sales averaged 6% more, and sales from iPhones declined by only 2%. Nonetheless, the health and beauty sector witnessed an 8% slump in total market value, a 3% rise in average order value, and an 11% drop in orders made through an Android device.
Health and beauty brands grow in B2C and hybrid B2B.
It was evident that businesses dealing with consumers saw considerable growth over the course of a year in the health and beauty sector. The online sales of health and beauty products for customers in H1 2022 rose by 10%, and year-over-year total merchandise value increased by 10%. However, YoY AOV was only up 1%.
The statistics for merchants who sell to both consumers and businesses were even more astonishing. In the first half of 2022, health and beauty purchases saw an increase of 21% compared to the same time period a year prior, with gross merchandise volume rising by 32% and the average order value up 9%.
Organizations dealing exclusively in B2B did not experience the same level of expansion. There was a 1% drop in the total value of goods and services sold for health and beauty retailers in the first half of 2021 and the first half of 2022, and a 2% rise in the average order value, but the number of orders was down by 2%.
Health and beauty outperformed overall e-commerce in AMER.
The health and beauty space made significant leaps and bounds compared to the other e-commerce markets in North America throughout the first half of 2022, as witnessed by a 15% rise in general merchandise value and the total orders placed over the same period; at the same time, the average order value remained static over the same period.
However, APAC and EMEA told a slightly different story.
In the Asia Pacific region, retailers that sell health and beauty items saw a mere 6% growth in gross merchandise volume, along with a 9% hike in orders and a 3% drop in average order value between the first six months of 2021 and the same time frame in 2022. In the Europe, Middle East, and Africa region, health and beauty products had a 1 percent decrease in gross merchandise volume, 11 percent fewer orders, and 11 percent more average order value in the first half of 2021 compared to the first half of 2022.
Health and Beauty Ecommerce Trends and Predictions
Statistics demonstrate that the health and beauty sector has gained a competitive advantage when it comes to online shopping.
Looking back on the first half of 2022, here are some noteworthy trends that are shaping this e-commerce category:
Social commerce helps brands meet customers where they are.
eMarketer predicts that the U.S. social commerce business will be worth more than $50 billion a year by 2023. This means that e-commerce businesses need to start selling on social media. Additionally, since Generation Z has growing buying strength and one-fourth of them make acquisitions through social media, this target population represents a good chance for retailers to expand their share of the market and amplify online transactions.
Instagram and Facebook rank first in terms of offering commercial operations through social media, yet additional websites such as YouTube, Pinterest, and especially TikTok are increasing in importance.
TikTok may be a recent addition to the world of social commerce, but it is now a very well-known entity. It has a unique capacity to turn lesser-known individuals, organizations, and products into overnight successes. TikTok is now a mecca for businesses, especially for health and beauty companies, endowed with e-commerce attributes like analytics apps, product links, and ad choices that serve to connect them to fresh customers and boost sales.
Hashtagged videos about makeup have been played more than 230 billion times on TikTok. #BeautyHacks videos have been viewed 15.5 billion times, indicating that a large number of TikTok users are using the app for gaining advice and knowledge. A mere glance at “BeautyTok”, the part of TikTok that focuses on cosmetics and skincare, illustrates how health and beauty organizations have a great chance to promote and vend goods and services on the platform.
One of the manufacturers that specialize in health and beauty products is BigCommerce business Bliss, a company that works in body and skincare. They started using TikTok at the beginning of 2020.
In 2021, Bliss initiated their second annual campaign on TikTok in partnership with The Trevor Project, an NPO that focuses on LGBTQ young people. Bliss hosted a discussion about cyberbullying called PepTok Live, giving away one dollar to The Trevor Project for every positive remark posted on TikTok that used their company’s name.
The organization now has a vast amount of supporters and trending labels, like #ThisisBliss and #FindYourBliss, have enabled them to target the Generation Z population and increase the public knowledge of their brand immensely.
We need to consider video when discussing health and beauty marketing and leaving TikTok out of it.
Visual content, such as makeup tutorials and product reviews, is an excellent tool to advertise health and beauty items, regardless of the social media website chosen.
- YouTube, especially, has been a well-known platform for health and beauty influencers to promote their favorite brands and products.
- Instagram and Pinterest offer reels and short-form videos, allowing brands and creators to bring their products to life.
- Livestream Shopping provides an unfiltered, raw experience, allowing customers to shop in real-time without having to visit a physical store.
AR and VR bridge the gap between online and offline.
As the traditional brick-and-mortar retail experience transitions to e-commerce, companies have had to generate methods to unite the physical and digital realms. Can a customer see how an eyeshadow looks on them, figure out what color nail polish they want, and find a foundation that matches their skin without ever leaving their house?
Getting a costly item over the internet can be intimidating, however, when it comes to beauty or cleaning products, not being able to test them out first increases the likelihood of buying something not suitable. It is clear that the beauty industry, which is traditionally very tactile and visual, stands to benefit greatly from incorporating augmented and virtual reality technologies into their retail stores.
Augmented and Virtual Reality (AR/VR) can help to soothe nervousness and offer customers an experience that is similar to what a physical store would provide. These new technologies allow customers to actively use 3D replications of items in real-time, such as by applying Instagram and Snapchat filters or trying on virtual makeup.
We most noticeably witness these patterns about to become entrenched in the Metaverse.
Our Global Consumer Report highlighted an interesting finding: almost half (46%) of respondents have declared that they would shop on the Metaverse, and an even higher percentage (51%) of them expressed interest in buying both virtual and physical goods. This demonstrates that if health and beauty brands are looking to invest in emerging technologies and new digital platforms, now is the best time to do so.
1. Consumers will continue to shop offline
When the coronavirus outbreak happened in 2020, people thought that the majority of shopping would move to the web and would stay there. In spite of the global progress of technology and the convenience of online shopping, people still prefer to go to traditional shops, indicating that there is a considerable need for physical retail.
For 2022, the expansion of warehouses and fulfillment centers by major companies like Amazon and Walmart has been reduced, thus resulting in a slower increase in e-commerce.
A lot of well-known companies and labels put more money into traditional stores. In September and October of 2022, Ross Stores opened 40 new sites, and there is no indication that their growth will be slowing down in the foreseeable future. In the same manner, Warby Parker, a direct-to-consumer label, planned to have 13 shops operational in the third trimester of 2022; additionally, Nordstrom Rack set their sights to establish 8 more stores in 2023.
The reports of the demise of physical stores have been greatly exaggerated. Customers enjoy shopping over the internet, however, brick-and-mortar locations will still be significant parts of their shopping experiences.
2. Physical retail stores need to support sales and fulfillment
The majority of people, they are back to shopping in physical stores. Although some activities due to the pandemic may no longer be necessary, the utilization of BOPIS (Buy Online, Pick Up In Store) and quick shipping services for convenience are likely to remain popular.
What does this mean for retailers like you?
If your business offers both online and offline sales, it is important that your brick-and-mortar locations be able to facilitate any method that customers want to use when shopping.
It is absolutely necessary to create a vibrant retail area that fosters an enjoyable physical shopping experience. Your stockroom needs to be designed to effectively handle online orders, including the option of in-store pickup, delivery within the local area, and shipping to further away destinations.
A system such as Lightspeed Retail can make it smoother for you to manage your inventory and order, making sure that you have the correct products available both on the sales floor and the storeroom. The reporting abilities of this system allow you to make knowledgeable purchasing decisions and get your supplies easily.
Lightspeed helps bring together catalogs from all of your e-commerce and physical stores, so that monitoring and controlling inventory, sales, and orders is easy and effortless. You can take advantage of Lightspeed’s order and delivery capabilities to offer curbside pickup, shipping, and same-day delivery.
3. Omnichannel marketing will be table stakes
It is essential to have a presence on multiple channels as customers tend to use a range of devices and platforms when shopping.
This implies creating a marketing and communications plan that encompasses both physical and virtual modes of communication- such as in-store, over the internet, on social media, and through text messaging. It is critical to be consistent across all channels when carrying out multi-channel marketing. Customers should have a consistent brand experience with every contact they make.
The optimum approach to achieving this is to utilize effective marketing approaches that allow you to launch campaigns from a single source. For optimal performance, coupling your marketing approach with your point-of-sale and retail administration process will enable you to monitor your activity and gauge your return on investment.
Marcello’s Lightspeed Marketing & Loyalty makes it possible to achieve your desired outcome. The capabilities of automated email flows, loyalty marketing, and SMS help you remain connected with shoppers across all mediums while always maintaining consistency.
4. Consumers will increasingly expect payment flexibility
Concerns about inflation will persist in the minds of shoppers in 2023, and it will remain a priority. The World Economic Forum has discovered that seven out of every ten customers think prices will increase over the next twelve months.
In addition to shifting the focus of their expenses to necessities, rising prices will cause more people to resort to buying items with their credit cards. Customers can look into other payment options, particularly ones that provide them with financial flexibility when their money is tight.
Ensure that you can satisfy the money requirements of your clients. In addition to taking credit cards (and therefore mobile payments), you should think about providing services such as “purchase immediately, pay at a later date” and layby/layaway.
If you are employing Lightspeed, make certain to examine the platform’s payment functions. Lightspeed Payments provide a straightforward, streamlined payment system with transparent prices and no extra charges. By utilizing everything from payment hardware and software to customer support in one spot, you’ll be able to work more efficiently.
With Lightspeed’s inclusion of a layaway function and being connected to Klarna’s “buy now, pay later” platform, you can provide your customers with various payment possibilities and flexibility.
5. Retailers will continue to grapple with labor shortages
Labor problems in the retail sector will remain a reality through the upcoming year. The Washington Post reports that 70% of job openings in retail have yet to be filled, and this trend is estimated to last until at least the start of 2023.
If bringing new people into the organization is of utmost importance to you, it’s a smart move to review your pay and benefit plans to make sure they are effectively engaging potential employees. Think about giving advantages such as the ability to choose your own hours to draw in new workers.
Technology can also help you weather these labor challenges. Discover methods to make your activities automated and more efficient to lessen manual labor. Joining your applications and platforms will help reduce the amount of time doing bureaucracy so you can save time.
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