Once exclusively reserved for physical in-store shopping, the beauty industry is increasingly online. The beauty industry, broken into categories of beauty tech, cosmetics, fragrances, personal care, and skin care, is expected to generate $646.2 billion in 2024, up 3.3% from 2023’s overall revenue.
An estimated $88.47 billion will be due to online beauty purchases. Shopping online for beauty products is becoming popular with all demographics—in fact, one survey found that 71% of U.S. beauty shoppers will use a specialty beauty retailer’s website when researching new products.
To help your beauty ecommerce brand stand out from the competition, we’ve collected the key stats, ecommerce strategies, and innovation defining the industry in 2024. Read on to get the details.
What’s the state of the beauty ecommerce industry in 2024?
In 2024, online sales are expected to make up 19.2% of the total revenue of the beauty and personal care industry. This number is only growing year over year as online shopping becomes more prevalent.
Over on e-retail giant Amazon, health and personal care sales are expected to take up 34.7%—almost one-third—of the platform’s entire ecommerce sales, up from 33.2% in 2023.
Online shopping will also be the number-one way people shop for beauty products, followed by heading to specialty retail stores, making purchases at their local grocery store, and finding products at travel retail stores.
The United States has the largest beauty and personal care market of any country, accounting for $97.81 billion in revenue. China is second ($67.18 billion), Japan is third ($45.96 billion), and India is fourth ($30.54 billion).
Consumer spending in prestige categories is also rising. Across four main beauty categories (makeup, skincare, fragrance, and hair care), the industry saw a larger year-over-year increase in revenue for prestige products than for mass-market products.
“The beauty industry is strong, and the outlook remains positive for both the mass and prestige sides of the business in 2024,” says Circana’s global beauty advisor, Larissa Jensen. “This performance is remarkable given the phenomenal growth it has experienced for the past two years, but the industry should not rest on its laurels.”
Larissa continues, “Consumers continue to cope with economic pressures, and being in tune with their shifting mindset is a must. Flexibility, creative thinking, and effectively harnessing high consumer engagement are all part of the winning formula to drive continued growth.”
The top 10 beauty ecommerce trends of 2024
Another part of the winning formula is to stay on top of trends. Keep these 10 beauty ecommerce trends in mind as you adjust your marketing and sales strategies for 2024.
1. Consumers expect personalized beauty offerings
Far from being a nice-to-have bonus, personalization has become ingrained in customer expectations. According to Segment’s 2023 State of Personalization survey, over half (56%) of consumers say they will become repeat customers after a personalized experience, up from 49% in 2022.
HubSpot’s 2024 State of Marketing report found that 94% of marketers say personalization boosts sales, too. Customers who get personalized recommendations and experiences are more likely to purchase and return for more. Beauty brands that don’t deliver tailored experiences to individuals risk leaving money on the table and losing out on customers.
Made-for-you beauty is one way ecommerce brands are personalizing their product offer to individuals. For example, clean beauty brand Pure Culture uses surveys and at-home skin tests to build custom skin care formulas.
Each set is sold for around $80 and takes into account variable factors like customers’ lifestyles, diet, genes, and personal skin goals.
Joy Chen, cofounder, and CEO at Pure Culture Beauty, explained that customers often have trouble finding the right type of skincare. This ultra-personalized approach helps them find what’s right for them.
“There’s a lot of confusion with the consumer, in terms of how they get information about what’s best for their skin.… So we really believe that the only way to get at this is going to be customization,” Chen said. “Consumers today are demanding more. They’re demanding that they have something that’s right for them.”
Product recommendation quizzes are another way ecommerce beauty brands are personalizing their customer communications and offers.
In the absence of third-party cookies—Google Chrome is eliminating them by Q3 2024—beauty brands will need to find new ways of collecting customer data. Product recommendation quizzes are one way to find out personal information about consumers and then tailor your offering.
For example, direct-to-consumer (DTC) makeup brand Il Makiage has an online quiz that helps customers find the perfect foundation match.
From there, customers are able to shop recommended products and get a personalized foundation that perfectly fits their skin tone.
In an interview with Retail Brew, Michael Simoncic, managing director at Alvarez & Marsal Consumer Retail Group, explains that personalization should simplify customers’ shopping experiences.
“It is about knowing the customer’s preference and then tailoring the response,” he said. “It should be a seamless, frictionless experience.… Personalization efforts that require significant time and investment from customers don’t work.”
2. Brands will look to AI to innovate individual offerings
In 2024, we’ll also see more beauty brands increase their efforts to use artificial intelligence for personalization.
A core use of AI is helping online shoppers identify the right products for them without having to go into a physical store. Artificial intelligence can also be used to create unique formulas for individuals, pioneering individualization in beauty.
For example, skincare brand Proven uses AI to match products to people’s individual skin types and lifestyles. Ming Zhao, cofounder and CEO of Proven Skincare, launched the brand after struggling to identify products that were suited to her skin type.
With her cofounder, Dr. Amy Yuan, the pair first created the Skin Genome Project, an AI-powered beauty database. The Skin Genome Project analyzes data from 20,238 skincare ingredients, 100,000 products, 28 million testimonials, and 4,000 scientific publications. The brand also asks consumers to complete a short quiz about their skin concerns and lifestyle.
Using this data, Proven makes personalized skin care products based on nearly 50 factors, including an individual’s genes, routine, and the environment—for example, water hardness, UV index, and humidity.
Proven then adjusts individuals’ products every eight weeks, taking into account changing seasons, the skin’s tolerance to active ingredients, and lifestyle shifts. “The beauty industry is increasingly leveraging AI technology to offer personalized shopping experiences,” says Steve Pogson, founder of ecommerce agency First Pier.
“Beauty brands can integrate AI chatbots that guide customers through a personalized selection process, providing tailored product recommendations based on their specific skin concerns or makeup preferences. This significantly enhances the customer journey, making it more interactive and personal, which boosts customer satisfaction and loyalty.”
3. Loyalty programs continue to win over customers
Loyalty programs represent a huge opportunity for beauty brands to personalize their offering and retain more long-term customers. Pioneering beauty brand Sephora led the way with its ultra-personalized loyalty program, Beauty Insider, in 2007. But in 2024, consumers are still looking to purchase from brands that offer rewards.
Around the world, 70% of US consumers said they’re more likely to be loyal to a brand with a loyalty program. And 43.5% of consumers would sign up for the loyalty program of a brand they’re already loyal to.
A great example of a brand that successfully rewards loyal customers is 100% PURE. Their Purist Pro program for estheticians and makeup artists offers a 35% discount on most products and first access to new product launches, while the Purist Perks loyalty program includes seasonal savings, birthday gifts, free shipping, points based on customer spend, and more.
Simplicity is key to getting people to join. It’s easy to understand and sign up for, and customers don’t have to jump through hoops to get their rewards.
Taking it a step further, e.l.f. Cosmetics’ mobile app for their Beauty Squad program does this well, too. Their mobile app features receipt scanning for non-app purchases so members can receive rewards wherever they buy products.
4. Brands to innovate with AR & VR try-on filters
Just over half of US adults have either used or are interested in using augmented reality (AR) or virtual reality (VR) while shopping.
People often first interact with AR via social media filters or lenses they find on Instagram, Snapchat, Pinterest, or TikTok. Beauty retailers have plenty of opportunities to tap into this trend by using AR filters to demonstrate their products or allow customers to try them on virtually.
Snapchat is currently the most developed AR platform, but Instagram is a top contender. Pinterest’s AR tools are currently designed for beauty brands and TikTok is focusing on becoming the go-to place for creator-led AR.
Using AR during the social commerce shopping journey has the potential to improve the customer experience. Beauty brands like Supergoop and OPI, for example, are investing in Snapchat’s AR tools. Snap users can virtually “try on” Supergoop’s new lip colors as well as different OPI nail polish colors.
Beauty brands are leading the way for AR shopping on social media. Marketers can experiment with social AR tools to create their own filters, effects, lenses, or even 3D experiences on social media. These virtual experiences are what will help beauty brands stand out from the competition in the future.
“The game won’t be the same when you simply ask your voice assistant to buy the best mascara on the market for you. Or if you are able to watch a makeup tutorial directly on your face with a virtual try-on,” said Lubomira Rochet, L’Oréal’s global chief digital officer in a Think with Google interview. “The brands that master these experiences will be the ones people choose.”
5. Brands to partner with authentic influencers
Influencers continue to impact the beauty industry, but the nature of influencer marketing is shifting. Instead of partnering with the influencer with the largest follower count, brands are focusing on engagement rate.
For brands looking to partner with beauty influencers, audience size no longer stands as the only indication of success, according to Glossy’s Influencer Index.
Authentic was Merriam-Webster’s 2023 word of the year, and for good reason. According to Sprout Social’s 2023 Index, authenticity is one of the top things customers claim not to see enough of from brands.
This also ties in with beauty brands moving to be more inclusive and diverse in their campaigns. Instead of always picking photoshopped celebrity-endorsed images, consumers want to see images of real people they can relate to.
Beauty brand Glossier is worth $1.8 billion today—but before they became a household name, the brand used influencer marketing and Instagram to build a loyal audience. Whether they’re working with Olivia Rodrigo or an individual beauty creator with several thousand followers, CEO Emily Weiss credits the “regular women who promote their brand so devoutly that make Glossier so special and successful.”
As shown by Glossier, combining authentic influencer-led content with UGC can be an effective strategy for beauty brands to gain popularity and sales.
6. Consumers to interact with brand communities
As beauty brands want to improve relationships with customers, many are turning to building communities. Brand communities have been increasing in popularity in the past few years, and for good reason—communities strengthen customer retention and encourage interaction between customers and brands.
For example, Shopify merchantThe Skin Nerd has built a dedicated community and evangelist following known as the “Nerd Network.” Many of their community members come to its sites to educate themselves, whether by watching video content or reading a blog post on skin care.
The paid community provides one-on-one consultations and acts as a one-stop shop to provide pro tips for all skin types.
Communities are also a great place for brands to collaborate with customers on product innovation.
For instance, Cocokind, a skincare brand stocked in Ulta, Target, and Whole Foods, has an Instagram community of 315,000 people. The beauty brand uses their Instagram Stories for product research. With #Cocokindlab, the company includes customers in the product development lifecycle, asking questions about pricing, packaging, colors, and ingredients.
Including customers in product development helps them feel seen and will encourage them to be more invested in your brand.
7. Social commerce makes it easier to sell on social media
There are over 100 million social buyers in just the US, and this number is only growing. However, what’s growing even faster is the amount these social buyers are spending.
Though the number of social shoppers is steadily rising, they’re making more purchases each and those purchases are adding up.
First Pier’s Steve Pogson explains, “With the deepening integration of social media and ecommerce, brands are increasingly selling directly through social platforms. Implementing strategies that leverage social media marketplaces and shoppable posts makes purchasing as seamless as possible for the customer.”
The top four social media platforms shoppers use to make purchases are Facebook, Instagram, TikTok, and Pinterest. With the launch of TikTok shop in late 2023, TikTok’s third-place spot could potentially contest Instagram’s second place spot. Still, it should come as no surprise that Gen Z is already shopping more on TikTok than on Instagram.
In fact, it’s TikTok, the relatively new kid on the block, that’s becoming a hub for beauty content. #Beauty currently has 39 million posts and counting, and is one of the biggest product categories on TikTok, partly because of how the platform brings fun and education to the content.
Makeup brand e.l.f. is one business that has tapped into TikTok’s base of beauty fans. The #elfcosmetics hashtag has 165,000 posts, and the brand is taking advantage of TikTok Shop by linking products directly into their content.
In this screenshot of their experience, the products featured in the video are easily clickable, allowing viewers to instantly make a purchase.
8. Shoppers want the best of physical and online shopping
Recent data shows that 21% of US consumers primarily shop online while 27% prefer a combined approach, shopping both online and in person. Brands that can embrace this omnichannel approach can hope to capture and retain more customers in the future.
So how can health and beauty brands best combine online and in-store shopping experiences in 2024?
Karla Davis, Ulta Beauty’s VP of marketing, explained that omnichannel shopping needs to properly connect all channels together. “Omni really speaks to the integration of all the channels and not just having all the channels for channels’ sake, but really making sure that there’s a seamless experience across all of them in a way that really kind of works behind the scenes to give the guests what they need when they need it, and where they need it,” she says.
Glossier is one brand that brought their online shopping experience alive in seasonal pop-ups in cities like London and Los Angeles. In fact, their pop-up shops were so successful that they opened several global permanent store locations.
But it’s far from being a typical pop-up shop. The direct-to-consumer cosmetics brand creates different themes in each space with experiential activities. They successfully build excitement and drive brand followers keen to test out the products in real life.
By interacting with consumers in the real world, Glossier builds stronger connections with customers beyond digital encounters.
9. Beauty subscription boxes remain popular
Beauty subscription boxes remain a great way for the cosmetics industry to retain loyal customers over the long term. US subscription ecommerce sales hit $38.2 billion, seeing consistent year-over-year growth.
Personal care and beauty subscription boxes saw the highest year-over-year growth in average order value and customer lifetime value of all seven verticals studied in Recharge’s State of Subscription Commerce 2023 report.
Clean beauty subscription brand Beauty Heroes sends members a monthly discovery delivery of one clean beauty product, always valued at more than $120. The subscription box costs just $58.95 per month. In-store, subscribers receive 15% off products every day.
10. Shoppers expect beauty products to be produced and shipped sustainably
Consumers are increasingly demanding that brands uphold sustainable values that match theirs. Conscientious shoppers are choosing brands based on their environmental impact.
Steve shares, “Consumers are becoming more conscious of the environmental impact and the ingredient safety of the products they use. As a result, there's a growing trend toward sustainability and clean beauty. Beauty brands should highlight their commitment to sustainability through eco-friendly packaging and formulations.”
Some 45% of consumers say that responsible sourcing is the most important aspect of sustainability, and 24% of consumers want brands to increase their use of sustainably produced ingredients. Plus, 69% of consumers have become more interested in sustainability over the last couple of years. But 25% say brands don’t make it easy for them to consistently shop in a sustainable way.
To make sustainability more accessible, brands like Uni are shifting away from non-sustainable products and packaging, encouraging customers to refill and reuse their dispensers instead of throwing out single-use packaging.
For instance, Uni offers a reusable dispenser made from aluminum and recyclable bio-resin (plastic made from biological sources instead of petroleum). A 100%-recycled aluminum refillable bottle twists into the dispenser to allow people to pump out the product. Shoppers can purchase a Uni starter kit or subscribe to monthly refills so they can send back empty dispensers in the box to be refilled.
Boie is another brand with a clear pledge to the environment. Each year, toothbrushes, loofahs, and other plastic personal care items contribute to more than 50 million pounds of annual landfill waste.
Through Boie’s recycling program, the brand receives used personal care items like toothbrushes. Using these items, as well as scraps from other products, they create new products like bathroom hooks. Since they don’t need to put extra material back into the manufacturing process, it’s become a scrap-free operation.
Another important aspect of sustainability refers to the way products are shipped. The transportation sector—which includes the shipping industry—accounts for a whopping 20.2% of the world’s total carbon emissions.
One way to address your carbon footprint is through offsetting. Currently, less than a quarter of brands are offsetting emissions, but we hope to see an increase as we learn more about improving our world’s carbon usage.
For instance, Love Beauty and Planet made a $100,000 grant pledge to help reduce carbon emissions. In an interview with eMarketer, Sonika Malhotra, cofounder and global brand director of Love Beauty and Planet, explained how as well as offsetting emissions the brand is taking steps to help environmental programs.
“We’ve always taxed ourselves for the carbon we generate as part of our production and distribution,” she said. “So, we started an initiative called The Love Beauty and Planet Project, which gives grants to individuals and small entities that are making a difference to the planet, be it through clean energy programs, recycling, or anything that takes care of carbon emissions.
“We’re also partnering with the NAACP Environmental and Climate Justice Program to make sure we prioritize communities of color and other minority groups that take a bigger hit when it comes to environmental issues.”
Now is the time for your beauty brand to examine how you can manufacture, package, and ship your product lines more sustainably. Then, make your pledge to the environment clear on your website so customers can relate to and understand your values.
Beauty brands to watch in 2024
Monday Muse
Monday Muse is a beauty brand dedicated to sensitive or difficult-to-manage skin conditions like acne and eczema. They offer multipurpose, vegan skincare products designed to minimize irritation and offer clear, healthy complexions.
Founder Lune Martens spotted a gap in the market for sophisticated, streamlined collections that cater to adults with sensitive skin, beyond acne solutions for teenagers. Monday Muse aims to bridge this gap with their carefully formulated products, including The Nectar Vitamin Facial Oil, The Juice Daily Serum, The Cleanser Soft Milky Gel, and The Gloss Scalp & Hair Oil.
Since launching in November 2020, the brand has transitioned from a direct-to-consumer brand to entering prestigious retail spaces like Harrods and Galeries Lafayette, marking a major milestone. The brand's commitment to unique, one-of-a-kind formulations is evident in their product development process, ensuring high-quality ingredients and effectiveness.
Deviant Skincare
Using $2,300 and no outside investment, Natalie Smyth launched Deviant Skincare to find effective solutions for all skin tones, ages, and identities. Natalie used her influencer status to gain traction, but she’s since grown the company into a brand known for challenging conventional beauty standards.
Deviant Skincare has developed a unique product lineup that is effective and gentle on the skin, informed by community feedback and rigorous testing. Their focus on sustainability, community-driven product development, and inclusivity makes them a brand worth watching in the beauty industry.
LYS Beauty
LYS Beauty, founded by Tisha Thompson in February 2021, quickly emerged as a groundbreaking brand in the industry, becoming the first Black-owned clean beauty brand sold at Sephora in less than a year after its launch.
Through her experience as a beauty retail executive, Thompson sought to address the lack of diversity and inclusivity in the beauty industry, especially the clean beauty segment, which historically focused on white customers and excluded Black women. LYS Beauty, standing for "love yourself," was designed to cater to an overlooked market with affordable, clean beauty products offering deep shade ranges. All products are priced at under $25, so it's affordable for everyone who wants to buy.
Where is beauty ecommerce heading in 2024?
Growth signals are strong for online beauty brands in 2024. Online sales are up and consumers are increasingly confident in using digital channels to purchase cosmetic products. Tech innovation, social shopping, and sustainable initiatives are all fuelling development in the industry.
Before you tap into these trends, first clearly define your brand values and identify your audience’s unique preferences. Then test out a couple of these ecommerce marketing strategies to see what your customers prefer.
Check out more inspiring stories from retailers running their beauty ecommerce businesses on Shopify.
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Beauty ecommerce trends FAQ
How can businesses boost customer retention and loyalty?
An easy way to improve retention and loyalty is by implementing a loyalty program that rewards customers with points, discounts, offers, or more. You can also try customized marketing communications to engage on a more personal level. Other tactics include stellar customer service, engaging social media content, subscription services, or membership exclusives.
How can businesses optimize their mobile platforms to meet modern expectations?
Optimizing your mobile platform can include a wide array of approaches, but these are some of the most effective:
- Ensure your website is designed for mobile.
- Keep your website loading fast.
- Create a web UI that’s simple and intuitive.
You can also add features like one-click ordering, easy navigation, AR, and strong security to improve mobile experiences.
What are effective ways to integrate sustainability in a business model?
Whether you source eco-friendly ingredients or adopt sustainable packaging solutions to reduce your carbon footprint, there are several ways to make sustainability a key part of your brand identity. You can also consider communicating your sustainable practices on your website to build brand loyalty. Or you can form partnerships with environmental organizations to help your business align with sustainable practices.
What are some ways to use AI and other emerging technologies to enhance the experience?
You can use AI to personalize product recommendations, provide customer service through chatbots, or optimize logistics and inventory management. Other technologies, like AR, offer more immersive possibilities. For example, AR can empower a customer to virtually try on makeup or visualize how a skincare product might fit into their routines before buying it. Using these types of approaches can help you boost conversions and customer satisfaction.
