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State of Digital Shelf 2022: Beauty

6 min read

What our data reveals about tactics that global beauty brands are using to win at e-commerce.

The last few years have been hugely challenging for all CPG categories and beauty is among the categories that have seen the most flux. Historically, shoppers preferred shopping in store for beauty products. As a result, most beauty brands, particularly cosmetics, have seen the majority of their sales come from physical stores, with a low share of profit coming through e-commerce. The pandemic forced a change, and beauty brands proved resilient. When lock down measures eased and shoppers returned to physical stores, the digital shelf remained an essential channel in which beauty brands could grow.

Global Beauty Brand Statistics 2022

Now as we edge towards the end 2022, we’ve seen new challenges face the beauty category. Inflation has perhaps been the hottest topic of the year. According to Nielson, beauty price per unit increased 17% this past year across in-store and online. The categories most affected were facial skin care (+31%) and cosmetics & nail (+19%). But inflation isn’t the whole story. Exclusivity, innovation, retail mix, price pack architecture, and availability have combined to drive up the unit price.

Despite rising costs, beauty is growing. Globally, revenue in this category is experiencing an annual growth rate of 10.5%. Over 50% of that growth is expected to come from eCommerce. APAC currently dominates the beauty market with 43% market share, which has steadily increased since 2015 from 36%.

Breakdown of cosmetics market by geographic zone

Breakdown-of-cosmetics-market-by-geographic zone

Source: L’Oréal estimates for the global cosmetics market in 2021 based on manufacturers’ net prices. Excluding soap, toothpastes, razors and blades. Excluding currency effects.

Global-ecommerce sales in the health and beauty category are predicted to reach roughly 450 billion USD by 2027 (vs 837 billion USD for store-based sales). Trends driving growth include Gen Z shopping behaviors, social commerce, and emerging technologies. Internet-born brands are also emerging with a direct-to-consumer approach that takes advantage of all the digital shelf has to offer, while at the same time challenging legacy brands to up their game. Today, brands looking to win the digital shelf must follow a shopper-first model that combines both digital and physical channels.

So what does it take to win the digital shelf in beauty in 2022?

State of Digital Shelf: Our Methodology

In this global study we looked at the main drivers influencing digital shelf success for beauty brands from January - September 2022. In this study we focused on beauty brands across EMEA, JPAC, LATAM, and North America.

Our digital shelf scoring system provides aggregate ratings for key digital shelf drivers. Our algorithm considers 100+ success factors across millions of our customers’ SKUs and those of their competitors, utilizing our C.A.R.S. framework for measuring digital shelf success. This includes:

C - Content
A - Availability
R - Ratings & Reviews
S - Search

For each C.A.R.S. metric we derive an aggregated digital shelf score that encapsulates performance into one easy to understand metric.

Here’s what we found…

Availability: 2022’s biggest challenge

State of Digital Shelf Beauty [Odzyskane]_Obszar roboczy 1 kopia 2

State of Digital Shelf Beauty-change-in-availibility-score

Our data reflect the ongoing challenges that brands face as a result of the supply chain disruptions of recent years, which was pushed over the edge by the pandemic in 2020 and further complicated by the war in Ukraine in February 2022. Our data show how the Ukraine war had a global impact on availability for beauty brands, with most regions experiencing a notable drop in availability during March 2022 right after the war kicked off. Asian markets were hit the hardest but recovered the quickest, while Europe, North America, and Australia continue to struggle even now (e.g. Poland, U.S.A., and Australia have all experienced a net negative change in availability form January 2022 to September 2022). These regions are recovering slowly due to ongoing supply chain issues in getting raw materials and packaging from China, exacerbating the issue of rising costs. For example, US shipping company Freightos reports that freight rates from Asia to the US West Coast are 250% higher than this time last year. Add to that staff shortages due to international border closures leading to lack of people available to process imported goods.

When it comes to the digital shelf, lack of availability is a double-edged sword. Not only do you lack products to sell, harming your revenue, but you also lose market share on the digital shelf, particularly due to the implications of out of stocks on retailer search performance.

Search: Availability and Content Drive Search Performance for Beauty Brands

The best brands are winning on search by protecting their availability and optimizing their product content. Here’s what we observed:change-in-score-sept-2022-vs-Jan2022Retailers are increasingly penalizing products that go out of stock, which means lack of availability not only affects your supply of products to sell, but also your search rank on e-commerce sites.

  • The markets in which we’ve seen the biggest positive flux in search performance were a mix of (1) advanced markets (Hong Kong) where retailers are advanced and search algorithms are sophisticated and (2) up and coming markets (Poland) where algorithms are less sophisticated but on the fastest growth trajectory.
  • Paid search is driving competition for both branded and unbranded keywords as brands increasingly are investing budget into paid campaigns. For example, on Amazon.co.uk, a branded search for “max factor mascara” results in sponsored banners and products from Maybelline, L'Oreal, and Bell Hypoallergenic:maybelline-on-digital-shelf

The best performing beauty brands in 2022 are those that

  • Create best in class content, with PDPs optimized for search AND conversion
  • Combine paid and organic strategies to rank highly in search

When it comes to search, availability may be hard to control in 2022 but content is one area where you can make an impact.

Content: Japan is leading the pack in content innovation

Our study showed that beauty brands in Japan increased their content performance by 38 points during the first half of 2022 and have sustained their performance through September, well above any other market. How?

State of Digital Shelf Beauty [Odzyskane]_Obszar roboczy 1 kopia 8Amazon and Rakuten lead the e-commerce landscape in Japan and it is perhaps this struggle for dominance that has pushed digital shelf innovation across these two retailers and the brands that sell on them. This can largely be seen in the evolution of content for online brands which adapted to the expectations of Japanese consumers who like product pages packed with information and plenty of photos and infographics. Beauty brands in Japan are increasingly creating content tailored specifically to the needs of the Japanese shopper.digital-shelf-japanLegacy brands like Mac and Lancome that have succeeded in Japan have recognized that western PDP standards may make your product seem untrustworthy to Japanese customers, and so have adapted their strategy accordingly. Japanese shoppers prefer:

  • Numerous rich vibrant images
  • Detailed product information in both the title and description
  • Extensive illustration of the products in practice
  • Busy designs packed with information
  • Image-heavy and text-heavy PDPsdigital-shelf-japan-beauity

Ratings & Reviews: How the voice of the customer is becoming increasingly important in the beauty category

Ratings and Reviews are becoming increasingly important for beauty brands across markets as they represent the social proof that many shoppers need to drive their purchase decision. In a survey of over 6,000 consumers by Power Reviews, 99.9% of shoppers reported that they consult reviews when shopping online. And retailers are offering increasingly more ways for customers to leave their feedback, for example with the use of shopper-generated images and videos. Studies show that such content can lead to a 91.4% lift in conversion when shoppers interact with them.

Our studies show that brands have most effectively leveraged the promise of R&R on APAC retailers, particularly Thailand, Korea, and Singapore, which experienced the biggest increase in their Ratings & Review score from January to September 2022:change-in-r-r-score-sept-2022-vs-Jan-2022APAC remains the overarching leader when it comes to Ratings & Reviews, where consumers expect to see far more R&R than westerns shoppers expect. Retailers are playing to this, making it possible for shoppers to tailor their review analysis to their own specific interests. For example, Rakuten let’s you sort beauty reviews by age, gender, and images:state-of-digital-shelf-beauty-japanMarket in focus: APAC

As the leader of the pack in the health, beauty and personal care category, APAC is one to watch.

                         Which retailers are driving growth in Asia?


Key innovations pushing e-commerce in APAC beauty:

  • Social commerce - particularly live streaming, which has grown significantly since the Covid-19 crisis.
  • AI software - particularly virtual try-ons (e.g. YouCam Makeup AR Virtual Try-On on TMall)
  • Omnichannel opportunities - such as loyalty and rewards programs
  • Cross platform promotions - using social platforms like Weibo and Red
  • Collaboration - with celebrities, influencers, and KOLs

APAC marketplaces offer numerous marketing levers for beauty brands:

Retailers in APAC like Rakuten, TMall, Shopee, and others are constantly deploying new technologies that empower beauty brands to create an engaging digital shelf experience with tools that mimic in-store behavior and content that fosters brand loyalty:

  • Virtual try-ons with augmented reality
  • “Store loft” functionality for branded content
  • Hyperpersonalisation
  • Brand loyalty programmes
  • Fan clubsTMall-MarketplaceExample: TMall Marketplace

For example, in China, L’Oreal, the top Skincare and Beauty brand in APAC, developed a brand loyalty program for Maybelline through a WeChat mini program integrating points earned through Tmall, its D2C store, and offline purchases.state-of-digital-shelf-beauty-china

APAC shoppers value ratings and reviews


It’s no surprise that shoppers are influenced by positive reviews; they act as affirmation for their purchase decision. Interestingly in APAC, shoppers value marketplace reviews as much as they do reviews on a brand’s website. For brands, consolidating positive reviews into one place on your website can make it easy for people to gain that social proof they so desire while also cultivating a “review community” that helps build brand loyalty and ultimately give shoppers the trust and confidence to purchase your product.

The Future of the Digital Shelf for Beauty Brands

Over the last few years we’ve seen some exciting changes happen in beauty e-commerce as beauty brands shifted from a store-first to online-first to omnichannel approach. Today’s beauty world looks vastly different than it did just a few years ago as digitally-native brands have come forward to challenge legacy brands and economic turbulence forces a “survival of the fittest” approach that’s driving exciting new innovative approaches across the globe. We’re excited to see what the future brings. Here’s a few things we’re looking out for…

  • Growth of the virtual try-on experience with augmented reality
  • Hyper personalization where shoppers gain a custom experience at every touch point of the sale
  • Ongoing social media marketing with influencers and brand partnerships
  • Increased investment on retail media spend
  • Emphasis on social issues like diversity, inclusion, and sustainability


Shazia Amin
Shazia Amin
Head of Insights

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