Digital IQ Index®: Beauty 2013

Key Takeaways

following the great recession beauty quickly emerged as one of the bright spots on the digital horizon in 2012 the beauty sector registered six percent growth beauty e-commerce grew a staggering 29.1 percent outperforming all but one consumer category the industry's online influence is even greater with more than a third of beauty consumers doing research online before making a purchase competition for the innovation crown across beauty's traditional and digital channels is fierce l'oreal's u.s media budget has swelled to 1.5 billion doubling its digital spend since 2010. heavyweight png has increased its online media spend to 30 percent of its total media budget while also renewing its focus on product innovation digital experimentation is a hallmark of the beauty industry with brand efforts ranging from live video chat and robust loyalty to auto replenish programs and digital first integrated media campaigns online growth high margins and low ship-to-weight ratios have catalyzed a wave of e-commerce investment amazon introduced its luxury beauty store in october of this year burberry nars and luxemton headline the offering that thus far lacks participation from any of the major conglomerates with brands anxious to clean up gray market inventory it may only be a matter of time before more prestige brands develop a more official presence on the platform feeling the threat sephora launched its sephora flash program in august mimicking amazon prime with free two-day delivery for a 10 membership fee not to be left behind department stores and big box retailers have also invested in beauty specific online efforts improving site merchandising and co-op marketing opportunities for the first time in the five-year history of our digital iq index beauty report six brands occupy the genius ranks l'oreal paris takes the third spot with a new site and sophisticated personalization features keels our number two brand definitely integrates its rewards program on and offline and lancome earned our top rank with strong mobile and tablet optimization creating a seamless experience across devices this study attempts to quantify the digital competence of 85 beauty brands across three categories skin care color cosmetics and fragrance our aim is to provide a tool to identify strengths and weaknesses and help brands achieve greater return on digital investment members can download the full report at l2thinktank.com