The beauty industry is getting a digital makeover, thanks to Gen Z, viral TikTok trends, AR capabilities, and new consumer behaviors. Brands will need to take a multichannel approach to keep up.

On today's episode, in our "Retail Me This, Retail Me That" segment, we discuss why subscription ecommerce works, product categories best suited for this model, and how much subscription fatigue may be setting in. Then for "Pop-Up Rankings," we rank the top four subscription services that have staying power in the key categories of pets, beauty, food, and clothing. Join our analyst Sara Lebow as she hosts analysts Blake Droesch and Zak Stambor.

Fragrances will see about $240 million in US ecommerce sales this year, following a massive 72.9% growth rate in 2021, when consumers returned to social activities but stuck with their pandemic-induced habit of shopping online.

New Category Breakout: Fragrance (Subset of Beauty and Cosmetics). Similar to jewelry, online fragrance sales spiked in 2021, after seeing little growth the year prior. Growth in the overall beauty and cosmetics category was aided by the resumption of social activities. Sales are growing, but fragrance doesn’t look ripe for major ecommerce disruption anytime soon.

Big-box retailers are aggressively upgrading their beauty offerings to attract returning in-store shoppers and younger, digital-first consumers.

Many of the retailers that thrived—including those in apparel (Nordstrom, Macy’s, Express), activewear (VF and Deckers), and beauty (Ulta Beauty)—benefited from people returning to travel and in-person events who wanted to update their wardrobes and make themselves up.

Ulta Beauty is teaming up with PayPal-owned Happy Returns to enable shoppers to return items at over 1,300 stores across the US. The big takeaway: If done well, returns can represent an opportunity for retailers to build customer loyalty, said Patty Soltis, eMarketer principal analyst at Insider Intelligence. “Retention costs are always less than acquisition costs,” she said.

Pinterest’s AR tools have also been developed for beauty brands but will likely expand into other categories that are popular on the platform, like fashion and home goods. Recent Commerce-Related AR Product Developments. Try on for eyeshadow: Pinterest has expanded Try on to eyeshadow, allowing users to see what products from Lancôme, NYX Cosmetics, Urban Decay, and YSL Beauty would look like on them.

For example, beauty and personal care sales rebounded in 2021 from 2020, but remain depressed over the longer term. Take face cosmetics sales, which rose 21% last year, but remained down 14% when looking on a two-year basis.

On this episode of Brand Anatomy, where we get exclusive looks inside leading brands, eMarketer Briefing director Jeremy Goldman sits down with Abby Whitmer, vice president of ecommerce at BeautyBio, to discuss how the beauty brand is adjusting to iOS privacy changes, tackling supply chain issues as a medium-sized business, and lessons from this year’s holiday season.

As Amazon raked in more than $11 billion in Prime Day sales worldwide, health and beauty product sales boomed on the platform. In a survey conducted by Numerator throughout the event, 28.0% of US Prime Day buyers said they made a purchase in that category. Consumer electronics also made a spark: 27.5% of respondents reported buying tech gear and gadgets.

Ulta Beauty and Estée Lauder have both deployed tools to allow consumers to virtually apply foundation, makeup, and other products. Ulta Beauty’s GlamLab had over 19 million virtual shade try-ons during the pandemic up to June 2020, according to the company’s chief digital officer Prama Bhatt.