[podcast] As Amazon Chips Away at Beauty, Brands Need to Get Ready

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Amazon's U.S. beauty sales totaled $340 million in the second quarter, a 40% year-over-year gain.

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While Macy's continues to struggle, Amazon is gaining share of the online beauty space and going head-to-head against the ascendant Ulta by reportedly exploring a partnership with Violet Grey. On the latest edition of The Business of Beautiful, One Click Retail analyst Nathan Rigby warns that brands that fail to get their Amazon strategy in order face a timeline of 12-18 months before most brand positions are firmly staked out.

Further reading: How WUNDER2 Produced Amazon’s Top Mass Beauty Seller

In the first quarter, Amazon owned $1.3 billion of the $80.6 billion U.S. health and personal care market, according to One Click Retail. And, in the second quarter, the retailer posted U.S. beauty sales of $340 million, a gain of 40% year-over-year.

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Amazon’s Prime memberships incentivize consumers to purchase all of their goods on the platform, and research has shown that Prime shoppers go to Amazon first when seeking out products.

While mass skin care was Amazon’s top U.S. beauty category, the fastest year-over-year growth segment was mass cosmetics, at 60%.

The use of data and customer reviews have leveled the playing field among large and small brands, allowing niche players to chip away at category leaders. This has made Amazon a key opportunity for savvy beauty upstarts that see the value in being where the consumer is.

While mass skin care was Amazon’s top U.S. beauty category—as it is in four out of five leading markets worldwide—the fastest year-over-year growth segment was mass cosmetics, at 60%. In the same period, mass cosmetics sales in Canada expanded by 70% year-over-year.

As the retail giant continues to gobble up marketshare, now is the time for brands to assemble their Amazon strategies.

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