There are hundreds of choices when it comes to beauty products, most of which have historically come from one of seven conglomerates: Estée Lauder, Unilever, Johnson & Johnson, L’Oréal, Coty, Shiseido and Procter & Gamble. Until now.
Amazon has struck again, and could soon become the eighth company on this list. Amazon recently released its own budget-friendly, branded cosmetics products under the line, find., which includes color cosmetics for the lips, eyes, face and nails.
The company has also announced it’s offering beauty sampling to Prime members in Europe. As a cosmetics industry veteran, I can tell you one thing about Amazon entering the beauty landscape: this. move. is. disruptive.
Why should beauty brands be concerned?
Remember when Amazon announced it would lower prices at Whole Foods? Grocery chains lost nearly $12 billion in market capitalization in a single day.
When Amazon strikes, it 100% disrupts the new industry it enters.
When Amazon shared its vision in 2018 for an independent health care service, the market value of the 10 largest listed health insurance and pharmacy stocks fell by a combined amount of $30 billion.
When Amazon strikes, it 100% disrupts the new industry it enters. So, beauty brands, it’s time to pay more attention.
How can Amazon be successful in such a saturated market? By leveraging the power of product sampling by way of machine learning.
Amazon plans to use its data about consumer habits to send new product samples to consumers. By doing this, Amazon is almost ensuring that the samples land in the hands of the right customers, which helps drive product awareness and conversion.
35% of customers who try a sample will buy the sampled product in the same shopping trip.
Sampling has revolutionized the beauty industry in unbelievable ways. According to Euromonitor International’s Annual Survey on Personal Appearances (unavailable to non-subscribers), free samples were the fourth biggest influencer for purchasing beauty products across the biggest beauty categories.
Additional studies have also shown that 35% of customers who try a sample will buy the sampled product in the same shopping trip. When it comes to online sales, Amazon already outperforms Sephora and Ulta and it’s only a matter of time until its own brands begin to replace big brand beauty products.
Maxime D’Haussy has more than 25 years’ experience in the cosmetics industry. He played a significant role in the merger of Bioplan Mappel and Arcade Beauty, and previously served as CEO of Arcade’s Latin American operations.