A couple of years ago, I saw a picture of some really cool pink and purple nail art and I wanted to try it out for myself. Luckily for me, there was a link to a video tutorial underneath the picture and for the next couple of minutes, I let Jenny Fox’s soothing voice guide me into taking a piece of plastic wrap and smearing nail polish on my nails. That was my first introduction to the online beauty world in 2012. Since my discovery until now four years later, the Internet and the power of social media have transformed the beauty industry into what it is today.
The cosmetics (or beauty) industry has been steadily increasing worldwide in all of its
subcategories, including skincare, makeup, and perfume. The United States happens to be the largest cosmetics market in the world, with the typical American woman spending at least $144 on beauty products per year. In 2015, total revenue of the cosmetic industry equaled over $60 billion dollars and is estimated to increase by approximately over $2 billion in this year to a grand total of $62.5 billion dollars by the end on 2016. This number only stands to grow even higher as online beauty retailers gain more popularity. Online sales of cosmetic products equaled over $17 billion dollars in 2013, and have only increased throughout the years.
Some of that revenue is definitely due to beauty brands’ efforts on social media. Several of the top beauty brands, like Esteé Lauder, Anastasia Beverly Hills, and Make Up For Ever, have a large social media presence, including accounts on Facebook, Twitter, YouTube, Instagram, and Pinterest. But it’s on Instagram and YouTube where brands get the most bang for their buck, mostly because they are the two best places to put original, image-based content. It’s also worth mentioning that color cosmetics – meaning makeup (lipstick, eyeshadow, etc.) – are most successful on social media rather than skin or hair care, so most of what I’m writing about refers to color cosmetics.
Instagram has become a one-stop shop in the beauty community. You can get inspiration from curated makeup accounts, learn about new trends like contouring and strobing,
follow makeup artists or beauty “gurus” who can teach you how to apply makeup in different ways, and find out when a popular shade of liquid lipstick from an online-only makeup brand is back in stock. With 31% of Millennials (who are heavy cosmetics buyers) considering Instagram as “very important” in their purchasing decision, brands that have utilized the medium sustain staggeringly positive results. The expected monetary value (EMV) of beauty brand using Instagram (EMV is the total of the weighted payoffs associated with a decision, the weights reflecting the probabilities of the alternative events that produce the possible payoff) increased by 904% in 2015 from 2014, compared to blogs, whose EMV only increased by 26%. For instance, the brand Sigma Beauty typically posts four to five images on Instagram each day. Those four or five images lead to about 24,000 clicks onto their website, where a consumer will spend up to 12 minutes and 25 seconds, compared to the 3 minutes and 12 seconds of consumers who weren’t directed from Instagram.
YouTube has become the place for beauty influencers to shine. As I mentioned in my last post, an influencer is a person with a large social media presence who can “influence” their large following with his or her content. The Howto & Style section of YouTube is
awash with beauty influencers and their makeup tutorials, hauls, and routine-style “Get Ready with Me” videos. As of year-end 2015, beauty videos have been watched 45.3 billion times, with those views going mostly to makeup related videos (51% of beauty related uploads that year). 123 million people subscribe to a beauty channel like Michelle Phan and Bethany Mota, two of the most popular beauty vloggers with 1.16 billion and 682 million total views on their videos, respectively (as of 2015). Brands typically work with these influencers by sending free merchandise that a vlogger may or may not use (or even like) on camera, or through a sponsored video. Vloggers with deeper relationships with brands can curate a makeup collection or even create a product, which typically sells insanely well. Jaclyn Hill’s product with Becca Cosmetics, a highlighting powder called Champagne Pop, is the biggest single-day seller on Sephora.com to date, and garnered $20 million in sales in just the second half of 2015.
So what’s next? The advent (and success) of online-only makeup brands like ColourPop and Dose of Colors might eat away at the sales of brick-and-mortar stores and become viable sources of competition. (Even though #, pronounced “hashtag”, in New York’s Soho has brought some of these brands into a brick-and -mortar store.) Hair care and skincare (especially with photo-friendly face masks) could unseat makeup as the most popular subject. The number of videos on men’s grooming and mature beauty could increase. The luster of an influencer’s following may dim as brands begin to produce their own content, especially on YouTube and Snapchat. Whatever happens, if it involves social media, it’ll surely be a success.