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The Beauty of Digital Influence

Drugstores are ramping up their cosmetic and personal care offerings to gain share from their successful competitors

November 24, 2016

Multichannel drugstores haven’t seen as much ecommerce traction as other sectors. Specialty retailers focusing on beauty products have been more successful, helping overcome many of the barriers digital shoppers once had to buying cosmetics without being able to try them first, as explored in a new eMarketer report, “Drug, Health and Beauty Retailers and Digital Commerce 2016: Trends and Benchmarks” (eMarketer PRO customers only).

US Health and Personal Care Retail Ecommerce Sales, 2015-2020 (billions, % change and % of total retail ecommerce sales)

According to the US Department of Commerce, health and personal care store sales reached $312.75 billion in 2015 and were responsible for 9.8% of overall US retail sales, a percentage that has been fairly stable over the past eight years, though never quite cracking double digits.

Ecommerce sales still make up a small fraction of the sector. At an estimated $28.56 billion in 2016, health and personal care will represent 7.2% of overall retail ecommerce, eMarketer estimates, increasing 16.5% over 2015.

On the surface, traditional brick-and-mortar drugstores like CVS and Walgreens may seem completely different than Sephora or Sally Beauty Supply branches, but there is a good deal of overlap. Nearly half of US female cosmetics buyers in November 2015 purchased cosmetics at drugstores, according to TABS Analytics (formerly TABS Group), with the bulk of share going to Walgreens (29%), CVS (25%) and Rite Aid (11%).

Not wanting to lose out on such sales, CVS now has beauty consultants, and Walgreens has been banking on higher-end brands like Boots No7. “Drugstores are doing more in beauty than any other retail channel,” Brian Owens, Kantar Retail’s director, told Fortune in September 2016. “They want to convert shoppers who may have gotten ideas at Sephora or Ulta [Beauty].”

Regardless of where they are occurring, beauty sales continue to increase, on the higher end in particular. According to The NPD Group, sales of prestige beauty—which is often defined as products sold mainly at department stores—grew 7% between 2014 and 2015, reaching $16 billion. During that same time period, mass beauty products (primarily sold in drugstores) saw growth of just 2%, according to Nielsen.

US Health and Personal Care Store Retail Sales, 2005-2015 (billions and % of total retail sales*)

And stores not even associated with makeup and skincare have moved in on the category; Target has also introduced its own “beauty concierges” while Anthropologie has launched bigger stores, some with new and carefully curated beauty departments as large as 2,000 square feet.

Among the multichannel retailers eMarketer tracks in this sector, ecommerce penetration among beauty retailers range from a high of 10.6% for Bath & Body Works to 6.0% for Ulta Beauty, which had strong growth of 47.1% for the 12 months ending July 30, 2016.

Drugstores do even less ecommerce business, by and large. For example, Walgreens—including sites,,,,, as well as its namesake site—had just 1.7% ecommerce penetration during the same period. Growth has been rapid, though, as these multichannel retailers become more digital: 34.0% year over year in this case.

Get more on this topic with the full eMarketer report, “Drug, Health and Beauty Retailers and Digital Commerce 2016: Trends and Benchmarks.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer PRO customers.


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