Why Prestige Beauty Can No Longer Ignore Amazon


A prestige beauty wave is headed for Amazon.

On Thursday, L’Oréal-owned Kiehl’s announced its debut on the platform via Amazon Premium Beauty, joining fellow portfolio brands including Lancôme, It Cosmetics and Youth to the People that already sell on the e-commerce giant. The news will likely come as a panacea to Kiehl’s fans, who saw the label’s free products swiped from Equinox locker rooms last week in favour of Grown Alchemist. At least now, gym junkies will have more places to buy the brand’s well-loved Grapefruit Bath and Shower cleanser and Amino Acid shampoo.

Nearly 40 Kiehl’s products are now available on Amazon, including hero products like its Ultra Facial cream and Rare Earth Deep Pore Minimising mask. The move seems obvious, given L’Oréal’s prevalence on Amazon; in February earnings, the company noted sales for its Luxe division grew, driven in part by Amazon in the US. Kiehl’s is one of 24 lines within L’Oréal Luxe.

“Kiehl’s is definitely one of those brands within the cities and urban areas on the coast that has a ton of brand love and a ton of brand affinity, but in order for us to grow and survive, we think of Amazon as part of appropriate and intentional modernisation,” said John Reed, general manager at Kiehl’s, who noted the line worked for over a year and a half on its branded homepage, product detail pages and on-site advertising with Amazon. He likened the 173-year-old label’s move to Amazon to its initial entry into department stores such as Bergdorf Goodman and Saks Fifth Avenue in the early 2000s.

L’Oréal obviously isn’t the only beauty conglomerate with Amazon on the brain right now. In March, the Estée Lauder Companies introduced Clinique on the e-commerce site, noting it would be the first of many ELC brands to finally take the plunge.

The question is why now?

Amazon has been a solid proposition for beauty labels for at least a decade. Hero Cosmetics, acquired by CPG company Church & Dwight in 2022, launched on Amazon in 2017, well before it even had its own website. E.l.f.-owned Naturium also used Amazon to help build its business before moving into other retailers like Target. While native Amazon brand success stories are more difficult to pull off today, Amazon is expected to overtake Walmart as the biggest beauty retailer in the US by 2025.

But for older brands, especially prestige ones, the lack of adoption has seemed to be largely emotional.

“Amazon has historically not done a good job of showing incrementality or urgency. Many executives didn’t want to put their neck on the line and kicked the decision down to the next board meeting or the next quarterly earnings because of this overall distaste for the platform,” said Renee Parker, co-founder of Amazon advisory firm Invinci. Parker was previously the UK head of Amazon Luxury Beauty between 2017 and 2021.

That incremental sales growth was largely proven true during the pandemic, when brands were first testing their Amazon strategies. L’Oréal labels, in particular, proved that there was a different kind of high-end shopper on the site that wasn’t a Sephora or Ulta Beauty customer, added Alex Carmody, vice president of brand strategy at marketing agency Front Row Group. According to data from Front Row’s proprietary tech platform Catapult, luxury searches within health and personal care grew over 200 percent between December 2021 and November 2023.

“There is enough data now for brands to know that luxury shoppers are coming to Amazon,” she said.

Amazon is a discoverability platform that beauty labels can no longer ignore, especially once brands see how much money they are losing to unauthorised sellers. Plus, many of the reasons to once avoid Amazon — dilution of brand equity, not controlling who you are promoted with, or exclusives with other retailers like Sephora — have largely softened. Moreover, some companies desperately need the sales growth and volume, even if Amazon sales don’t necessarily boost gross margin. That’s one reason experts and those close to the company say ELC had to relinquish its department-store-led strategy and give in to the platform. In quarterly earnings earlier this month, CEO Fabrizio Freda said Clinique’s launch “greatly exceeded our retail sales expectations.”

Brands also have more assets at their disposal to tell their brand and product stories on the platform thanks to built-in FAQs and product comparisons as well as videos and adverts. Laneige does a great job of showcasing all of Amazon’s features on their product detail pages with its best-selling Lip Sleeping Mask with highly visual assets including before and after images, and multiple videos from content creators testing the product.

Still, labels need to remember the individual product stories are almost more important than overall brand stories, as customers are already mid-funnel and ready to make a purchase.

There’s also the TikTok effect. Whereas shoppers used to head to Google to search for reviews and then, a brand’s DTC site, people are now going straight from TikTok and “using Amazon as that search engine which is a behaviour change,” said Carmody. Throughout 2023, beauty brand Amazon searches grew 80 percent versus Google searches at 64 percent, according to Front Row Group.

Reed said certainly making it easier for Kiehl’s’ core demographic of Millennial customers was top of mind when considering Amazon, but also recruiting new shoppers who have turned to social media for their skincare recommendations.

Despite the industry warming to Amazon, some high end beauty holdouts still remain, namely Charlotte Tilbury, YSL, Dior and Chanel. While integrating Amazon into one’s omnichannel strategy is a brand by brand decision, I assume most of these labels will eventually make their way there. Chanel Beauty, however, might be an exception — with the label’s revenues rising to 16 percent to nearly $20 billion in 2023, they have the luxury of keeping those beauty sales to themselves.

Here are my top picks from our insight and analysis on beauty and wellness this week:

1. Beautycounter’s Biggest Obstacle to a Relaunch: Its Own Salespeople

Beautycounter sellers in Washington DC
Beautycounter sellers lobbied in Washington. (Beautycounter)

In 2021, the pioneering clean beauty brand sold for $1 billion. Three years later, it was bought out of foreclosure by its founder, without a clear timeline for relaunching.

2. Why Everyone Is in Love With Blush Again

A collage of blusher products.
What’s behind beauty’s blush obsession? (BoF Team)

Once thought of as a somewhat dowdy, staid product, younger consumers are now embracing blush, wearing multiple products, formulas and shades as part of their daily look.

3. Beauty’s Opportunity in Women’s Sports

The WNBA's Izzy Harrison, a player for the Chicago Sky, stars in a campaign for Glossier.
The WNBA’s Izzy Harrison, a player for the Chicago Sky, stars in a campaign for Glossier. (Courtesy Glossier)

With the Paris Olympics on the horizon and viewership for women’s sports growing, the time is ripe for beauty brands to tap the power of female athletes.

THE BUSINESS OF BEAUTY NEWS IN BRIEF

E.l.f Beauty surpasses $1 billion in annual sales. The beauty company reported that sales increased 77 percent to over $1.02 billion for the 12 months ending on Mar. 31, 2024. The company’s share price fell after it reported that growth will likely decelerate in the coming fiscal year.

Indian beauty retailer Nykaa posts near three-fold jump in Q4 profit. Affluent consumers showed a preference for luxury makeup and fragrances which helped drive the 28 percent increase in revenue at 16.68 billion rupees. Its earnings before interest, tax, depreciation and amortisation margin expanded to 5.6 percent from 5.4 percent a year ago, while overall GMV rose 28 percent to 124.46 billion rupees.

Hims debuts $199 weight-loss shots at 85 percent discount to Wegovy. Hims can offer the prescription weight-loss drugs because US regulators have rules that allow pharmacies to make copycat versions of drugs in shortage. The company’s stock shot up as much as 38 percent on Monday, the biggest intraday move in more than three years.

Contact Sports shutters after one year in business. The sports-themed sex shop has laid off staff and is managing unsold inventory. The founders have decided to focus on other ventures that are growing more “significantly.”



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