BEAUTYINDUSTRYA Digital Marketing Perspective How to Compete in the Age of Amazon and YouTube

Fenty Spotlight: Capitalize on NewProduct Launches

Amazon: Grow Sales with Better Merchant Analytics

YouTube: Work with the RightBeauty Influencers

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Table of Contents

The beauty industry is shifting rapidly, but with worldwide growth and hundreds of billions of dollars on the table, the market is ripe with opportunity for brands who can adapt. Several factors have dramatically affected the industry in the last five years:

This report helps marketers tackle these challenges, and turn them into opportunities. With examples from brands like L’Oreal, Conair and Crest, merchants will learn how to boost sales on Amazon (and even track competitor conversions). We’ll also break down how brands can capitalize on the Fenty launch, and identify the right beauty influencers to partner with.

Introduction

As with other retail sectors, Amazon is quickly dominating the beauty sector. Total beauty sales only increased 2% in 2016, while Amazon Beauty sales shot up 47% last year.

The barrier to entry for independent beauty brands has lowered, and established brands are fighting to keep pace with consumer priorities. Celebrity-endorsed brands, like Fenty, have the ability to define culture and capture market share.

Increasingly powerful beauty influencers and vloggers can shape trends and create opportunities for brands to reach new audiences. However, successfully harnessing social influencers remains a challenge for many marketers.

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Optimize sales on third-party sites with in-site purchase tracking. What are shoppers seeking, comparing and buying on Amazon? Which of your competitor’s products are converting?

Amazon: Increase Sales with Better Merchant Analytics

1

21%15,975 2,665

4,786 2,263

5%

47% 21%

Total Page Sessions

L'Oreal ParisVoluminous Original Waterproof Mascara

Maybelline New York Lash SensationalMascara, Waterproof

TotalPurchases

Purchase Rate(Per Session)

Last View Rate(Per Session)

Driving traffic to your Amazon product page is important, but it doesn’t always translate to more sales. For example, mascara is a popular product on Amazon (the 6th most-searched term in the Beauty category), but determining the most “successful” mascara brand is more complex than it first appears. Maybelline and L’Oreal compete closely for mascara market share on Amazon; if we look at product page engagement for each brand’s top-selling mascara, L’Oreal appears to come out ahead by pulling a higher volume of sessions. But digging deeper into purchase and comparison behavior reveals otherwise.

Maybelline vs. L’Oreal - Battle for Mascara Market Share

L’Oreal vs. Maybelline Mascara Amazon Page Sessions & Purchase

Source: Page sessions and purchase data pulled using Hitwise’s Amazon Product Tracker (learn more here) during the month of June 2017. Internal Amazon search data pulled 30 days ending 9/30/17.

In spite of attracting fewer page sessions, Maybelline gets 2X higher purchase rate than L’Oreal. It also has a higher “last view” rate, meaning it was the last product shoppers saw before converting. This consumer confidence in Maybelline is also reflected in internal search data: “maybelline mascara” searches rank 82nd in the Amazon Beauty category, whereas “loreal mascara” ranks 987th*, suggesting Maybelline has stronger brand equity for mascara.

L’Oreal mascara pulls over 3X sessions to their product page than Maybelline. This number may be bolstered by having the “Amazon’s Choice” label, and from sponsoring several ad placements under search results for “mascara.”

Day Before Sale

Term Share0.61%

0.42%

0.38%

0.37%

0.36%

0.36%

0.34%

0.32%

0.32%

0.28%

0.27%

0.27%

0.26%

0.25%

0.25%

0.24%

0.24%

0.23%

0.21%

0.21%

makeup brushes

mascara

unscented deodorant

essential oils

eyeliner pencil

shampoo

charcoal face wash

body wash

beard trimmer

essential oil set

concealer

pre teen toothbrush

maybelline color sensational...

eyeliner

hair dryers

beard oil

magnesium lotion

barber

hair dryer

nail polish

Day of Sale

ShareTerm0.58%

0.48%

0.42%

0.37%

0.37%

0.37%

0.36%

0.36%

0.33%

0.30%

0.29%

0.26%

0.26%

0.26%

0.26%

0.25%

0.25%

0.24%

0.24%

0.22%

hair dryer

teeth whitening

tattoo ink

makeup brushes

nail polish

essential oils

face mask

korean skin care

mens wet dry electric shaver

pro comb

hair straightener

sunscreen

deodorant

straight razor

beard oil

magnetic eyelashes

glass spray bottle

lace front wigs

sulfur shampoo

makeup

Day After Sale

ShareTerm1.41%

0.56%

0.43%

0.40%

0.29%

0.24%

0.22%

0.21%

0.20%

0.20%

0.20%

0.20%

0.19%

0.19%

0.19%

0.19%

0.18%

0.18%

0.18%

0.18%

essential oils

makeup brushes

hair dryer

mascara

perfumes for women

face mask

flat iron

beard oil

hair clippers

shampoo

edens garden essential...

castor oil

waterpik

curling iron

gold earrings for women

hair brush

paul mitchell tea tree...

hair clips

teeth whitening

deodorant

Amazon Flash Sales - Tracking Flux in Product DemandOn September 15th Amazon launched a special “buy one get one 30% off” sale for a wide selection of beauty products. Tracking popular searches in Amazon’s Beauty category the day before, during, and after the sale reveals what types of products consumers seek during a sale.

Slightly more expensive beauty products, like hair dryers and teeth whiteners shot up during the day of the sale, while more commonly purchased items like mascara were more popular on regular days. On the following page, we’ll take a look at how merchants selling “big ticket” items can select the right products to promote on sale days (when they are most in demand).

Top Searches on Amazon BeautyBefore, During & After Beauty Sale

Source: Pulled using internal Amazon site search data (learn more here) on September 14th, 15th and 16th of 2017.

Source: Sessions and purchase data pulled using Amazon Product Tracker (learn more here), pulled the month of June 2017.

An Obvious Choice

A Less Obvious Choice

Conair’s choice is fairly obvious when it comes to selecting the right hair dryer to promote during the Amazon sale. The “Vagabond” dryer pulls slightly fewer product page sessions than the “Soft Touch,” but it converts better. People who visit the “Vagabond” are also more likely to purchase without shopping further, making it an ideal item to drive traffic to during a sale.

Teeth whitening is also a great product to promote heavily during a sale, but it poses a more complex decision for Crest. Their “White Luxe” kit initially appears to be the winner, with more sessions and total sales. But “Noticeably White Whitestrips” has a higher purchase rate and last view rate, suggesting this product may convert better if it gets more attention and traffic.

11,993

11,680

12,792

14,323

3194

2887

2264

1940

27%

25%

18%

14%

31%

5%

8%

8%

Total Page Sessions

Conair VagabondCompact Hair Dryer; Teal

Conair Hair Dryer; White

Conair Ionic Conditioning Styler / Hair Dryer; Blue

Conair Soft Touch 2-in-1 Styler / Hair Dryer; Black

TotalPurchasesTitle

SessionPurchase Rate

Last View Rate (Session)

15,256

7,980

1,568

1,405

1106

83,096

41,782

7,376

13,167

4264

18%

19%

21%

11%

26%

12%

10%

8%

3%

13%

Total Page Sessions

Crest 3D White LuxeTeeth Whitening Strips Kit, 14 Treatments

Crest 3D White Professional E�ects Teeth Whitening Strips Kit, 20 Treatments

Crest 3D White Gentle Routine Teeth Whitening Strips Kit, 14 Treatments

Crest 3D White 1 Hour Express Whitestrip Teeth Whitening Strips, Sample Kit

Crest Noticeably White Whitestrips, 10 Treatments

TotalPurchasesTitle

SessionPurchase Rate

Last View Rate (Session)

Rihanna’s cosmetics line launched in September, and has taken the cosmetics industry by storm. How can beauty brands compete? Or even better, how can they take advantage of Fenty’s success?

Fenty: Capitalize on New Product Launches

2

After years of anticipation, Rihanna launched her Fenty Beauty line on September 8th, 2017 in partnership with Sephora. Demand for Fenty products shot through the roof, and many of her most popular products sold out in days. Let’s explore the ripple effects of this influential launch, and how other cosmetics brands can ride the Fenty wave rather than drowning beneath it.

Source: Search and clickstream data pulled using Hitwise Intelligence over 4 weeks ending 9/30/17.

Searches 3 of 5top searches driving traffic to

At their peakin September,

increased by

916% in the month of Sept

for the word “fenty”

Sephora.cominclude the word

“fenty”

“fenty beauty”searches drove

6% of all trafficto Sephora.com

August - Before Launch September - Fenty Launch

18-24 25-34 35-44 45-54 55-64 65+

12.8%13%

27.4%28.2%

22.3%23.1%

14.4% 14% 15.4% 14.1%

7.8% 7.6%

Sephora is a massive website, but the influx of Fenty seekers still managed to affect Sephora’s overall site demographics, albeit slightly. Compared to August (pre-Fenty launch), audience cross-over between Rihanna fans and Sephora site visitors increased by 199%* in September. Let’s explore how else their audience shifted.

During Fenty launch, a higher percentage of younger consumers visited Sephora compared to month before, whereas segments over the age of 45 decreased.

Throughout Fenty’s conception and launch, Rihanna made a point of emphasizing that “Fenty Beauty is for everyone, all skin tones and races.”* Her foundation line offers 40 different shades, and as we’ll see on the next page, has become Fenty’s star product. The decision to place inclusion at the core of Fenty’s product development and advertising helped drive a more diverse customer base, not only to her products, but to the site where her products are sold.

Fenty Fans Flood Sephora - Shifting Cosmetic Demographics

Younger Audience

More Diverse

Sephora.com Audience Composition

Source: Audience data pulled using Hitwise AudienceView. Before Fenty Launch (month of August) measured 07/30/2017 - 08/26/2017 and During Fenty Launch (month of September) measured 09/03/2017 - 09/30/2017. *Quoted in: Times of London

6% Increase in the percentage of African Americans visiting Sephora.com

As you’d expect, 6 of the 10 most-visited product pages on Sephora during September were Fenty products, with the LongWear Foundation page pulling a huge concentration of engagement (offering 40 different shade options on a single page certainly didn’t hurt).

How can other beauty brands compete with the likes of Fenty? Rihanna’s beauty line has grabbed a lot of consumer attention, but it also spawned renewed interest in several cosmetic products, creating opportunities for other brands to step in.

The NARS concealer page dropped on Sephora from 9th place to 18th post-Fenty launch. However, the products actually pulled slightly higher visit share (.43%) in September. Interest in foundation and skin products has increased since Fenty’s launch, and NARS should capitalize on that by promoting this product, as well as their staple Sheer Glow Foundation.

Tarte released two all-in-one collector’s sets in September, which include blush, highlighters and eyeshadow. Considering the growing popularity of highlighters (likely amplified by the Killawatt Freestyle Highlighter), Tarte might tweak search campaign keywords to include “highlighter” rather than emphasizing other elements of these makeup sets.

Fenty Product Take-Over - A Competitive Merchant Strategy

Source: Product page visits measured using a Hitwise Custom Analysis (learn more here). Fast-growing search clicks measured 4 weeks ending 10/7/2017.

Concealer search clicksincreased 28% since launch

Highlighter search clicksincreased 27% since launch

BEFORE LAUNCH (August) FENTY LAUNCH (September)

1

2

3

4

5

6

7

8

9

10

Visit Share6.90%

2.13%

1.41%

1.16%

0.88%

0.79%

0.67%

0.67%

0.58%

0.55%

BrandFenty

Fenty

Fenty

Fenty

Fenty

Fenty

Kat Von D

Fenty

Too Faced

Ciaté

TermPro Filt'r Soft Matte Foundation

Killawatt Freestyle Highlighter

Match Stix Trio

Match Stix Shimmer Skinstick

Gloss Bomb Universal Lip Luminizer

Peach Perfect Matte Foundation 

Everlasting Liquid Lipstick

Match Stix Matte Skinstick

Just Peachy Eyeshadow Palette

Glitter Flip

1

2

3

4

5

6

7

8

9

10

Visit Share

0.66%

0.57%

0.55%

0.53%

0.50%

0.46%

0.46%

0.44%

0.40%

0.38%

Brand

Anatasia

Multiple

Anatasia

Kat Von D

Urban Decay

Bite Beauty

Pat McGrath

Make Up For Ever

NARS

tarte

Term

Subculture Eye Shadow Palette

Give Me Some Nude Lip 

Contour Kit

Everlasting Liquid Lipstick

Naked Smoky Palette

Amuse Bouche Lipstick

MatteTrance Lipstick

Ultra HD Invisible Foundation 

Radiant Creamy Concealer

Skin Twinkle Lighting Palette, Vol. II

Every brand wants to harness the power of social media celebrities to promote their products. But how can you choose the best influencer for you?

YouTube: Work with the Right BeautyInfluencers

3

Beauty influencers attract massive audiences on YouTube with their make-up tutorials and how-to’s. How can a brand evaluate the best YouTube Influencer to partner with? In the example below, we compared the audience overlap between women with strong lifestyle interests (i.e. Fashionistas, Weddings, Job-Seekers, based on their search behavior), and their engagement index* with different YouTube influencers. As we see below, Beauty vloggers are a great match for Costume seekers and Fashionista audiences.

Audience Interests vs. Beauty Vloggers

Wedding Costume FashionistasJob

Seekers Nightlife

Je�ree Star

Zoella

RCLBeauty101

Michelle Phan

Grav3YardGirl

Wedding Costume FashionistasJob

Seekers Nightlife

Sephora

Sally Beauty

Younique

Clinique

Kylie Cosmetics

<250 500+250-349 350-499

<250 500+250-349 350-499

Index*

Index

The Wedding audience is niche and has lower cross-over, but Michelle Phan and Grav3yardGirl pull the most influence with this segment.

RCLBeauty101, who attracts more school-age girls, has the lowest concentration of wedding followers and job seekers.

* What is “index”? Click here for definition.

Wedding Costume FashionistasJob

Seekers Nightlife

Je�ree Star

Zoella

RCLBeauty101

Michelle Phan

Grav3YardGirl

Wedding Costume FashionistasJob

Seekers Nightlife

Sephora

Sally Beauty

Younique

Clinique

Kylie Cosmetics

<250 500+250-349 350-499

<250 500+250-349 350-499

Index*

Index

Next, we break down the most engaged audience segments for top cosmetic brands, like Sephora, Clinique and Sally Beauty. While Wedding is generally a strong audience for makeup brands, Kylie Cosmetics shares even higher engagement with Fashionistas. Younique, in the meantime, has the lowest overlap with Fashionistas as well as three other audiences: Nightlife, Job-seekers and Costume.

Audience Interests vs. Top Brands

Strong alignment between Wedding audiences and cosmetics brands, especially Kylie Cosmetics, Sephora and Clinique

Sephora attracts Night Life lovers

Kylie Cosmetics has a lot of cross-over with Fashionistas

When brands better understand how their audience composition — and customer’s interests — overlap with social influencers, this provides direction on who to partner with, and for which products.

For example, Sephora might want to promote their “Girls Night Out” line with Grav3yardGirl, or Kylie Cosmetics might partner with Michelle Phan to produce a makeup tutorial on the Deer Snapchat Filter costume using Kylie’s Bronze Palette.

Shared Audience Interests

Source: YouTube influencer segments based on internal site searches for each influencer on YouTube.com (learn more here). Audience segments (i.e. “Wedding” “Fashionista”) based on search behavior indicating interest in particular theme. Segments built exclusively based on female consumers. Pulled over the month of June, 2017.

Top Correlation

Nightlife

Costume

Fashionista

Wedding

Grav3yardGirl

Michelle Phan

Zoella

Grav3yardGirl

Matching InfluencersSelected Beauty Brands

Key Takeaways

Advanced Amazon analytics are crucial for merchants to get ahead: Amazon is a rising force in the beauty industry, and getting a peek behind the curtain is a key advantage. Measure not only how your products are performing, but their relative purchase rate in relation to competitors. Learn how Hitwise can help with that here.

Use data to capitalize on a new product launch: Not every beauty brand can be Fenty, but they can take advantage of market shifts created by major product releases. Keep an eye on rising search terms in the wake of a major launch, and re-evaluate which products to promote based on the rising tides of consumer interest. Audience analysis is essential for choosing the right influencer: Not every social influencer in your industry is ideal to partner with — always conduct an audience overlap analysis first. Understand the interests of both your audience and a social influencer’s audience in order to align specific products with the right influencer.

Where can I get insights like this? We help clients get ahead using the most advanced competitive analytics on the web, including:

Internal Search: Hitwise offers internal site search data from within search engines on Amazon, YouTube, Target and more. Data can even be segmented by demographic or location.

Journey Mapping: Get a full map of your customer’s path to purchase, across the entire web. Intercept the your competitor’s audience during the research phase to conquest their customers.

Conversion Points: Benchmark your traffic and conversion rates against your competitors, and evaluate your performance across different third party sites.

Retail & Product Tracker: Track fast-selling products and popular categories across multiple retail sites. Identify product demand and determine gaps within your own categories.

LEARN MORE

For more information visit us at:www.hitwise.com