Amazon Prime or Sephora? (Photo: Henry Leutwyler)
You can buy almost anything — usually with free shipping — on Amazon, from Diane Von Furstenberg wrap dresses to Roswell UFO crash site soil, but you’re probably not buying the bulk of your beauty products with the e-commerce giant. As reported by Investor’s Business Daily, specialty beauty retailers like Ulta and Sephora, which emphasize their in-store experiences in addition to their e-commerce websites, are doing just fine without Amazon. As a matter of fact, IBD reports that Ulta shares hit an intraday high of 188.48 on December 17, and Sephora, as part of luxury conglomerate LVMH Moet Hennessy Louis Vuitton (LVMUY), is still a star moneymaker.
“In theory, (cosmetics) should be the perfect online business,” Nomura analyst Simeon Siegel told IBD. “On the other hand, even repeat customers will walk into these stores and find new products all the time. There will always be an element of discovery with cosmetics.”
There are several reasons that shopping at Ulta or Sephora is better than shopping on Amazon, even if you can buy your toilet paper and concealer in one go using the latter. For example, the convenience of e-commerce doesn’t override the thrill of walking into a brick-and-mortar store with flattering vanity lights and full-service salons. The new Sephora Beauty Tip Workshop in San Francisco even offers more than basic beauty services — you can take group lessons and get custom facials.
The testing component of a beauty shop is undeniably important to the beauty shopping experience, too. When you walk into a MAC Cosmetics brick-and-mortar store, for example, you’re probably expecting to test the bright pigments against your skin. You could, of course, learn how to contour from YouTube tutorials, but you may be more inclined to try a dramatic technique if a professional makeup artist does it on you.
IBD also notes that beauty products don’t sell like fast fashion — moisturizer and dry shampoo are used year-round. The publication doesn’t mention the possible influence of social media-driven beauty trends, like contouring and strobing, which have propelled the development of Instagram-friendly products like Too Faced’s Selfie Powder ($36) this year. Scott Galloway, founder of research firm L2 and a professor of marketing at NYU Stern School of Business, told IBD that Amazon’s own prestige beauty portal has, relatively speaking, been a disappointment to the e-tailer giant, even though it outspends Sephora and Macy’s on beauty-related search-engine keywords on Google.
Amazon is known for destroying brick-and-mortar industry — the bookstore is the most well known example — through convenience and discount prices, but beauty retailers have been holding their ground. “[They] incentivize you to shop and to shop with them, and they do an excellent job of it,” NPD Group analyst Karen Grant told IBD. “Price isn’t everything. But they also offer a good price and good service and all of the rest.”