Key 2022 Trends for Selling Cosmetic Products in the U.S. Market

Enhancing Customer Experience in the U.S. through an Omnichannel Approach

The Latest OSF Report Analyzes the Shift in U.S. Retail from Digitalization to Omnichannel Strategies

With the onset of the pandemic, cosmetic brands in the U.S. significantly invested in enhancing their e-commerce platforms. Currently, the focus has shifted towards omnichannel sales strategies, such as buy online, pick up in-store (BOPIS), optimization of guided selling tools, advanced filters, and dynamic product searches. This shift is highlighted in the recent 'Omnichannel Retail Index 2022' report published by OSF, an American e-commerce technology company. The report evaluated e-commerce platforms across various brands and retailers, including notable cosmetic brands like Lush Cosmetics, Ulta Beauty, Sephora, Clinique, and Kiehl's.

In the U.S., 'Click and Collect' Services Are Gaining Popularity Among Retailers and Customers

Currently, 84% of brands across all merchandise categories in the U.S. offer 'click and collect' services on their e-commerce platforms. This purchasing model allows customers to buy online and pick up their orders in-store at a later time. The adoption of this service has surged since the pandemic, becoming an essential component of the future purchasing model in America, as noted in the report. This marks a significant leap from 2016, when only 33% of companies offered this service.

For instance, on Lush Cosmetics' website, the 'Click and Collect' option is available during the checkout process. American customers can also opt for same-day delivery via Doordash directly from the brand's e-commerce checkout. This feature has become indispensable over time. "Meeting customer needs, including their preferred shopping methods and locations, has always been a goal for Lush. We began implementing 'Click and Collect' before COVID, and today it's a fundamental service because American consumers value the convenience of online shopping combined with in-store pickup that fits seamlessly into their schedules," stated Wendy Kubota, Director of Lush Cosmetics North America.

Shifts in American Consumer Purchasing Behaviors Require Brands to Adapt Swiftly

The adoption of curbside pickup, which soared during the pandemic in the U.S., is now offered by 62% of brands and retailers analyzed in the report. Additionally, 96% of brands allow shoppers to return items in-store across America. Within physical stores, 46% of brands and retailers have designated areas for online order pickups. Overall, the beauty sector has been somewhat slower in implementing omnichannel strategies compared to other retail categories in the U.S. In the report's evaluation of best practices, the cosmetic sector in America ranks eighth out of 14 categories, with an overall score of 60%. The top-performing category in the United States is fashion, with a score of 65%.

The Evolution of Traditional Retail in America: A Logistic Network for a Seamless and Fast Shopping Experience

The omnichannel model is not yet widespread among cosmetic brands in America. The report notes that only 29% of websites selling beauty products in the U.S. offer the option to combine in-store pickup with home delivery in a single order. This percentage is significantly lower compared to other categories, where 57% of brands provide this option. Similarly, only 30% of beauty brands allow users to check in-store inventory availability through their websites.

"Even before the pandemic, American consumers expected retailers to offer click-and-collect options, and today this expectation has only grown. However, this service should go beyond the final transaction, encompassing the entire customer journey—including communication and upselling—in a seamless and uninterrupted manner to pamper the customer and build brand loyalty," said Gerard Szatvanyi, CEO of OSF.

With 53% of American consumers reporting they feel comfortable entering physical stores in 2022, brands are expanding omnichannel capabilities to mobile platforms, including features that allow users to check 'nearby' store inventory from their smartphones. "While omnichannel functionalities, such as viewing in-store inventory, are not yet widely adopted by U.S. beauty brands, American shoppers continue to look for and expect these features in an efficient e-commerce experience," Szatvanyi added.

The Value of the U.S. Market for international Cosmetic brands

The United States is the largest market globally for cosmetic products. Notably, Italian cosmetic companies exporting to the U.S. recorded a 37% increase in revenue during the first nine months of 2021. The latest Omnichannel Retail Index 2022 report shows that embracing omnichannel strategies can significantly improve sales performance while meeting the expectations of American consumers.