When it comes to ecommerce, beauty brands are going strong, even as consumers cut back spending in other areas.

The beauty market — encompassing skincare, makeup, fragrance, and haircare — generated $430 billion in revenue in 2022, and is expected to grow at around 6% per year, reaching $580 billion by 2027. The ecommerce beauty market is growing even faster than beauty overall, nearly quadrupling between 2015 and 2022, and exceeding 20% of overall industry revenue.

Beauty brands have the “lipstick effect” to thank. The theory goes that as consumers pull back on big-ticket expensive purchases, such as housing and cars, they’re even more likely to spend on smaller indulgences, such as a luxury lipstick brand.

Even so, beauty ecommerce consumers have many brands to choose from — so how can you attract customers and pull ahead of your competitors?

Make sure that you’re capitalizing on industry trends and developing compelling promotions that will win over new customers and build loyalty among the ones you already have.

Here are some of the key beauty industry trends that are dominating in 2024:

BeautyTok is still on top

Beauty brands know that their customers live on social media — especially TikTok. The #beautytok community has more than 42 billion views, and a powerful pull over its viewers: one in four TikTok users bought a new product after seeing it featured on TikTok.

By partnering with beauty influencers, brands can get attention from new customers who might not be aware of their products. Consider sponsoring social media influencers who speak to your target demographics, sending them products that they can use in round-ups and reviews. By promoting this content in TikTok’s advertising platform, you can reach an audience beyond the influencer’s existing audience, while benefiting from their social capital.

For inspiration about the power of TikTok, look to beauty brands like The Ordinary, which was able to attribute 52,000 sales of a skincare product directly to an organically-created influencer testimonial. The brand has been able to build on the momentum by encouraging other users to showcase their own skincare regimens, with nearly 400 million views of TikTok videos featuring the #theordinary tag.

AR converts more customers

The beauty industry is poised to make the most of innovative augmented reality technologies, which empower customers to visualize how products would appear in real life without physically trying them on. Google’s AR beauty technology, for instance, makes it easy for beauty brands to let their customers virtually “try on” different shades of lipstick, foundation, or at-home hair color. Customers are more likely to make a purchase when they have the chance to virtually check it out, and they’re less likely to return the product — Shopify found that merchants that use 3D AR visualization tools have seen a 40% drop in returns.

AI analysis tools help customers find the right products

Beauty brands are also leveraging the power of AI to help customers find curated product recommendations in line with their unique needs.

For example, brands like The Hair Lab offer customers the chance to take a quick test and scan a strand of hair to determine their hair’s biology, resulting in a personalized formula to improve hair health and texture.

For skincare, Cetaphil and other brands offer an AI-based skincare analysis: Simply upload a selfie to the brand’s mobile app to get an in-depth analysis of your skincare report and a customized protocol to ensure healthy skin.

These types of initiatives use sophisticated data analysis alongside customer-provided responses to deliver curated product matches, making it far more likely that their shoppers will end up with results they’re satisfied with.

Omnichannel is essential

While some beauty brands have seen success with a strictly ecommerce model, more and more brands are focusing on an omnichannel business strategy, pairing ecommerce and brick-and-mortar brand experiences.

By focusing on both types of sales channels, customers can get access to a wealth of product information and a larger product inventory online, while benefitting from the opportunity to talk to beauty consultants and physically try on different products before making a decision.

When selling beauty products through an omnichannel strategy, it’s important that you’ve integrated all of your customer data in a single platform so that you can provide your shoppers with a holistic experience, wherever and however they buy your products.

Likewise, it’s important to provide a customized returns experience in line with their preferences: Some customers want to buy in-store and return online; others may wish to buy online and return in-store, so make sure that you’re offering a variety of options to fit all of your customers’ needs.

Sustainability sells

Sustainability in product manufacturing and packaging continues to be a leading concern, particularly among younger consumers.

Forty-seven percent of customers say that they’re looking for naturally-made products that offer health benefits to them, while also helping the planet. But it’s not always easy for them to find options they’re happy with: 46% say they’d like to see sustainable products offered at a comparable price to non-sustainable, and 45% say they’d like better labeling so that they can understand a brand’s sustainable claims.

While many beauty brands are prioritizing using all-natural or organic ingredients and shipping products in recycled packaging, don’t neglect the post-purchase side when it comes to sustainability. While, at 10%, the ecommerce return rate for beauty products is lower than many other industries, it costs more than 20% of the products’ original value to return the merchandise — with many products ultimately ending up in landfills. After all, beauty products can’t be resold once they’ve been opened.

To improve sustainability in cosmetics post-purchase behavior, and boost your profit margins, consider using a returns automation solution like Loop, which can help you determine the most sustainable reverse logistics path for your beauty products — whether that means requesting a return, donating the product, or even allowing the customer to keep the product in a “returnless refund.” Loop also enables “instant exchanges,” making it easy for shoppers to swap out products they don’t want for ones they do. You’ll be able to lower reverse shipping costs, keep products out of landfills, retain revenue, and keep customers happy (even if the product wasn’t the right fit the first time around).

The beauty ecommerce space is a vibrant, growing market that’s gaining more customers every day. Today’s beauty shoppers are tuned into their priorities, and demand brands that stand behind their products with solid science and a commitment to sustainability. By building high-quality, ethically-produced products, and providing customers with multiple venues for learning about them, you’ll be able to scale your beauty brand to new heights.

Sustainability is crucial to beauty consumers — including during the returns process. Learn how Loop can help you build a sustainable returns solution.