Retailing In The Age Of Amazon

Smaller beauty retailers are uniquely positioned to leverage and disrupt Amazon’s burgeoning beauty presence.

By Manyesha Batist in Beauty Store Business Magazine

Amazon has been touted as revolutionizing retailing and shopping. And its impact is real. The multichannel retailer controls close to 5 percent of the total U.S. retail market, both online and offline, according to digital and data research firm eMarketer. It is forecasted to exceed $258 billion in U.S. retail ecommerce sales in 2018–a whopping 30 percent increase over 2017. And eMarketer ranks Amazon No. 1 in ecommerce sales share, as its portion hovers near 50 percent. To put Amazon’s share of the market in perspective, eBay came in second on the list, with just under 7 percent share. Amazon is a retail-industry behemoth that is continually expanding its footprint. Yet, beauty retailers have power, too. Staying alert and knowing what you are up against is key to maintaining a firm place in the market.


Beauty is one of the most enduring markets in the world. When the economy is on the decline, beauty sales remain steadfast. So, it’s no surprise Amazon has aggressively pursued this market. Orbis Research predicts that the global cosmetic products market (beauty and personal care) will be valued at more than $805 billion by 2023. And Amazon’s claims on the beauty market are already producing dividends. Its U.S. sales of health, personal care and beauty products are expected to reach $16 billion in 2018, a near 38 percent increase, according to eMarketer. The retailer’s luxury beauty segment has grown 57 percent, comprising $250 million in sales.

It used to be that luxury, professional and indie beauty brands staunchly reserved their offerings for retailers within their niche. Their determination to protect their brand image, reputation and pricing meant that sightings of their products in mass retail settings were more likely due to unauthorized sellers. But today, you can find all three of these beauty categories on Amazon. Independent, emerging and boutique brands, such as 100% Pure, in addition to sellers, such as Wilshire Beauty, can be found in Amazon’s Indie Beauty department. The retailer features close to 300 brands, including Manuka Doctor and Elchim, in its Luxury Beauty department. Its Professional Beauty department sells salon, spa and dermatological offerings, including OPI, Pureology and Dermablend. Customers can also use its locator feature to find related services.

It’s been reported that Amazon has addressed the fears of some brands by offering to crack down on third- party, unauthorized resellers of their products on the site. With incentives such as brand protection, brand exposure and the potential for a bounty of unsolicited new customers, Amazon’s beauty footprint is expected to be massive. Already, the retailer’s 2018 second-quarter sales of health and personal care items totaled $1.9 billion (a 23 percent increase). Sales for beauty products reached $950 million (up 26 percent; estimates reported by One Click Retail).

According to eMarketer, Amazon’s anticipated sales of $16 billion in health, personal care and beauty in 2018 will represent more than 44 percent of total retail ecommerce sales of health, personal care and beauty products in the U.S.


When experts postulate how a modest online bookseller that launched in 1994 catapulted to the very top of today’s retail industry, they draw the same conclusion: customer service.

Customer obsession rather than competitor focus is one of Amazon’s four guiding principles. The others include passion for invention, commitment to operational excellence and long-term thinking. With customers as its focus, Amazon has topped the charts in customer service rankings for years. It ranked No. 1 among the Top 50 leading retailers in global retail customer experience in the 2017 ForeSee Experience Index. Amazon also ranked No. 1 in customer satisfaction in the Internet Retail category in the 2017 American Customer Service Index retail report, reportedly, for the eighth year in a row. In response to Amazon’s rankings, founder and CEO Jeff Bezos shared, “We wake up each day thinking about how to delight customers and invent on their behalf.” For Amazon, delighting customers has included offering free shipping, speedy delivery, a loyalty program full of perks (Amazon Prime), an expansive assortment and some of the lowest prices available, not to mention the convenience of online shopping.

“Regardless of whether you are a large or small retailer, the fundamentals of retail are the same.”
—Imtiaz Patel, managing consultant, Accelerated Growth Solutions

But, don’t fret. Here’s the great news: Superior customer service and customer experience are also the smaller retailers’ keys to relevance and success in an Amazon-dominated retail era. “Regardless of whether you are a large or small retailer, the fundamentals of retail are the same–the right product at the right price with an experience that is aligned with what the customer wants,” says Imtiaz Patel, managing consultant for Accelerated Growth Solutions, a boutique management consulting firm that has consulted some of the most successful enterprises in the world, including Walmart and American Express. He adds that it’s crucial that smaller retailers get to know their local customers on a personal basis. “In some ways, this is like going back in time to an era when local shopkeepers knew their customers and made personal recommendations,” he explains. “There is a real opportunity for small retailers to have a successful, thriving business if they focus on the advantages of being small.”

As smaller retailers compete with the likes of Amazon, they must remember the most enduring characteristic of beauty: It is experiential. It involves the senses. Participants breathe in the scents, feel the textures and look for the true colors. It’s communal–best enjoyed with others, whether shopping buddies or helpful store staff. Beauty retailers must beckon customers to their stores by reminding them about the wonders and discovery that lie within. This, too, is a strength of smaller beauty retailers. Customers go onto knowing what they’re looking for; but they visit smaller retailers anticipating an encounter with something new.


Beauty retailers can take their customer service and customer experience levels to superior heights with the following focal points.

Uniqueness: “Everything starts with product. The small retailer has to focus on the uniqueness of their product (revealing a knowledge of their local customers) and engage their customers through the experience they offer,” Patel says. “Stock products that are unique and hard to find online. Give them a reason for either coming into the store or visiting the site.” Also, make some offerings available in-store only.

Next, hone in on brand personality. Your most loyal customer doesn’t enter your store just to pick up his or her favorite product. There are characteristics and qualities about your store that make customers choose it over the host of other stores that sell their favorite products.

Don’t forget to differentiate your customer service and customer experiences. Figure out the unique perks your store can deliver. Can it deliver purchases to local VIP customers? Should it partner with local businesses for unique customer experiences? Can it strengthen a customer relationship by not only making the merchandise easily returnable, but following it up with a personal note and doggy treat for his or her furry friend?

Personalization: Amazon has in excess of 300 million active users worldwide–and it digs into data to give them what they want. “It is not a surprise anymore that Google, Facebook, Amazon, etc., know everything about their customer base. Jeff Bezos is known for collecting everything about his Amazon shoppers,” says Brian Farn, marketing manager at IdealSpot, which helps brick-and-mortar retailers select a location based on market and customer insights, including spending trends, product demand, demographics and psychographics. Farn has worked at Amazon, as well as Google and Microsoft. “These large corporations collect everything from your spending patterns to your interests, what you’ve searched online, how many people are in your family, etc.” Yet, a smaller retailer is also primely positioned to collect customer data through more intimate, familiar and personal interactions with customers.

One of the ways smaller retailers can use customer data to personalize customer experiences and grow their customer base is through content marketing. More than 21 percent of consumers research beauty care and/or cosmetics before buying them in-store, according to the Ecommerce Foundation. Through articles, emails, social media and other content, beauty retailers can proactively answer consumer questions, and speak directly into their purchasing decisions, their lives and their commonalities with the brand.

Farn cautions retailers not to shy away from data gathering. There are not only a host of services, such as IdealSpot, that can accomplish it for them, but simple keyword searches through platforms, such as Google Trends, can also help.

Experience: ForeSee found that when a customer’s journey begins in-store, it also ends in-store 89 percent of the time. Smaller retailers have the ability to give customers the experiences they’re looking for. They can provide a local experience, a community-oriented experience or a more intimate, interactive or unique experience. They can build a retail staff that is superiorly knowledgeable in their niche or that has keen insight into what their customer base wants. They can engage them online and then follow up with them in-store. “With Amazon growing so large, there is a real opportunity for small retailers to get personal, get local and differentiate from such a behemoth,” Patel says. “There is also a reaction to the scale of Amazon from a consumer level, where a number of people want to shop local, shop in unique stores that have character, where they are known as individuals.”


With the ease with which anyone can sell products on Amazon, beauty retailers have found themselves competing against its sellers’ rock-bottom prices. But price should not be a competitive factor for small retailers. As Farn puts it, that’s a battle that smaller retailers will never win. But retailers can be strategic in their brand partnerships to ensure fair and equal pricing.

“There will always be third-party sellers who will advertise deep discounts for reasons no one can explain. In short, there is no magic bullet; just a commitment from both sides to do your best to minimize the bad actors,” says Clay Campbell, co-owner of Innovative Beauty Products, which brings niche, professional beauty offerings to the market. He says that policing pricing issues is both difficult and time consuming, especially as most third-party sellers offer little information into their businesses. But he adds that there’s a greater chance of success when manufacturers and retailers work together to monitor Amazon daily for predatory pricing.

“Retailers should be using Amazon as a research tool to see what support the manufacturer is effectively or ineffectively bringing to its online presence.”
—Billy Vito La Venia, managing partner, Mavala Switzerland

Billy Vito La Venia, managing partner of professional beauty company Mavala Switzerland and owner of BLSD Distributors, says that beauty retailers need to focus their attention on brands that have taken online brand degradation seriously and have developed sustainable strategies to combat it. “Manufacturers can now protect their brands,” La Venia says. “Retailers should leverage
their buying power with the manufacturer to address their concerns,” including the manufacturer’s ecommerce pricing policy and how they manage it throughout the line of distribution. But they shouldn’t stop there: “Retailers should be using Amazon as a research tool by taking a cross section of brand SKUs to see what support the manufacturer is effectively or ineffectively bringing to its online presence, including but not limited to a uniform online brand presentation, product descriptions and effective management of MSRP,” he says.

And don’t let the competition blind you to the opportunities that exist for retailers within Amazon. “The biggest casualty of the Amazon revolution has been the larger chain retailers, which has actually created an opportunity for smaller retailers if they learn from and leverage Amazon as a platform,” says Patel. He explains that smaller retailers should think of Amazon as a platform that can be leveraged to sell their offerings, the way Wilshire Beauty has, through which they can access millions of shoppers. “This may be a truly efficient way to sell to a new customer,” he concludes.

Beauty retailers who creatively navigate the opportunities Amazon presents and leverage their small business strengths just may be the ones to disrupt the giant’s burgeoning beauty presence.

Manyesha Batist is a freelance editor and journalist based in Denver, CO.