Beauty US: Specialty Retailers and Amazon

Core beauty categories are changing and retailers are shuffling investments accordingly. The category’s largest segment, color cosmetics, has experienced slowed sales growth across the last year, and the changes have hit prestige brands particularly hard. Skin care, in contrast, is a bright spot — particularly for specialty beauty retailers trying to secure a piece of the pie amid increased investments from department stores and Big Box retailers like Target. Despite category shifts, the hold that Amazon, Sephora and Ulta have over the online beauty market continues to grow – the three retailers accounted for 44% of online beauty sales in 2019, up from 38% the previous year. Category changes are forcing brands to re-evaluate where to place their bets online, particularly given the category strengths that each retailer possesses.