Abercrombie & Fitch Co. (No. 60)

Abercrombie net sales were up 3% year over year to $836 million. The retailer did not break out ecommerce sales. 

“On digital engagement, our team has leveraged social media platforms to showcase our lifestyle offering, where we are able to highlight key must-win products for us in an authentic way. Social has proven to be a great channel for our target millennial customer,” CEO Fran Horowitz told investors.

American Eagle Outfitters Inc. (No. 55)

American Eagle ecommerce revenue was down 4% year over year in the first quarter, while in store revenue was up 5%. Overall revenue grew 2%, the retailer reported.

“Customers returned to in-person shopping and demand continued to normalize from elevated builds during the pandemic,” chief operating officer Michael Rempel told investors in a call. Leaders at American Eagle are working on strategies to use analytics to increase engagement, traffic, and conversion, Rempel said.

Bath & Body Works Inc. (No. 57)

The health and beauty retailer finished expanding its BOPIS rollout across the U.S. in Q1, CEO and director Gina Boswell told investors on May 18. Bath & Body Works plans to increasingly connect its digital and in-store offerings, Boswell said, because customers who shop through both channels spend three times more than customers who only use one. As of May 18, just 15% of customers shop through both channels, she said.

Boot Barn Holdings, Inc. (No. 328)

Ecommerce sales were down 18.4% in Boot Barn’s fourth quarter. “We believe these declines are a result of competitors having a stronger in-stock position compared to last year and expect this softness will be transitory,” CEO and president Jim Conroy told investors.

“While our online business declined, that business is cycling two very strong years of 39% and 24% comp growth in fiscal 2022 and fiscal 2021, respectively. Given the extraordinary revenue increase last year, we are quite pleased with these results,” Conroy said. Retail same store sales declined just 3.3% over the same period.

BJ’s Wholesale (No. 69)

BJ’s Wholesale said that digitally enabled comparable sales were up 19% year over year for the quarter ended April 29 ,2023. Online sales made up 10% of total sales in the quarter, CEO and president Bob Eddy told investors. Members of the warehouse club who shop online spend 70% more than members who only shop in stores, Eddy said.

Canada Goose (No. 135)

The winter wear retailer grew revenue 31.4% year over year in its fiscal Q4, but growth was partially offset by lower ecommerce results, per CEO and chairman Dani Reiss. Canada Goose didn’t share specific ecommerce figures.

The retailer shared plans to “further enhance store productivity and e-commerce performance in the not-so-distant future,” without stating details.

The Children’s Place (No. 124)

Digital sales growth at The Children’s Place “significantly outperformed” in-store sales for the first quarter, CEO and president Jane Elfers said in a statement. 

Online purchases made up 46% of sales in the quarter, compared to 45% in the previous year’s Q1 and just 33% in 2019. Elfers said ecommerce is projected to be 30% of sales by 2025, representing over $1 billion. 

Web traffic was “up double digits,” and 56% of new customer acquisition came through ecommerce, the retailer said. 

“Our millennial moms’ clear preference for the ease and convenience of shopping for her kids online is here to stay,” Elfers told investors.

Dick’s Sporting Goods (No. 32)

The sports retailer didn’t share specific ecommerce figures, but president and CEO Lauren Hobart told investors that “our digital experience remains an integral part of our success,” in a Q1 earnings call. 

Dick’s acquired outdoor retailer Moosejaw in March. Moosejaw primarily operates online, averaging 3 million visitors per month.

“For just over 10 months in 2023, we expect Moosejaw will add approximately $100 million in net sales,” chief financial officer Navdeep Gupta told investors.

e.l.f. Cosmetics Inc. (No. 953)

Beauty retailer e.l.f. grew net sales by 78% in its fiscal fourth quarter, “primarily driven by strength across our retailer and e-commerce channels,” it said in a statement.

E.l.f. began as an exclusively online brand before expanding into stores. Consumption of the brand’s digital content was up 75% in fiscal 2023, CEO Tarang Amin told investors. The retailer’s beauty squad loyalty program grew to 3.7 million members in the quarter, up 25% year over year. Loyalty members were behind nearly 80% of ecommerce sales, along with higher AOV and more frequent purchases than non-members, Amin assid.

Foot Locker, Inc. (No. 52)

Foot Locker reported that comparable digital sales in Q1 were down 16.8% year over year. The footwear retailer also discontinued an ecommerce line called East Bay, and online sales were down 9.5% excluding the brand. That’s still a larger decrease than in store comparable sales, which were down 7.4%. 

Online sales made up 16.3% of sales in the quarter, down from 18% in Q1 2022. Ecommerce sales are starting to pick up, with April sales up year over year, CEO Mary Dillon said. The retailer is on track to reach its goal of 25% online sales by 2026, Dillon said.

Guess Inc. (No. 177)

Online sales at Guess grew in Q1, although more slowly than in store sales, CEO Carlos Alberini said. 

Total revenue was down 4% in the quarter to $570 million, with U.S. revenue declines offsetting growth in Asia and Europe.

Kohl’s Corp. (No. 23)

Digital sales were down 19.6% year over year in Q1, Kohl’s reported. Net sales were down just 3.3%. 

“Our customers continue to shift back towards stores, and we reduced online-only promotions as we work to simplify our value strategies,” CEO Tom Kingsbury told investors.

Online sales made up just over one-quarter of sales for the quarter at 26%.

Ralph Lauren Corp. (No. 75)

Ralph Lauren’s digital sales were up in fiscal 2023, the retailer said. ”Sales in our owned Ralph Lauren digital sites grew mid-single digits on top of 20% growth last year,” chief financial officer and chief operating officer Jane Nielsen told investors in a Q4 earnings call.

“We plan to enhance the user experience with rich digital content and even greater customer personalization in fiscal ’24,” Nielsen said. That includes using generative AI for copy editing, computer programming, and graphics in addition to inventory optimization and forecasting.

Urban Outfitters (No. 30)

Apparel retailer Urban Outfitters reported comparable sales grew by double digits both in stores and online for its Anthropologie, Free People, and FP Movement brands. The Urban Outfitters brand’s comparable sales were down, and overall comparable sales were up 5%, the retailer said. 

“The growth in Retail segment comp sales was driven by a high single-digit digital comp and a low single-digit positive store comp,” co-president and chief operating officer Frank Conforti told investors. 

Online rental and resale marketplace Nuuly revenue grew 125% year over year, ending the quarter with 167,000 subscribers. 

Williams Sonoma Inc. (No. 22)

Revenue decreased 6% year over year in Q1, but was up 3.5% over 2021. The retailer did not specify ecommerce revenue. 

Williams Sonoma plans to “optimize our digital spend and customer connections,” per CEO Laura Albner.

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In 2019, Black Wolf Skincare invested in fulfillment software from ecommerce fulfillment services vendor ShipHero. At the time, Black Wolf processed about 1,000 orders per month.

Alex Lewkowict, co-founder, Black Wolf Skincare

“By my calculation, even at our volume of 1,000 orders a month, we saved more than $2 in shipping costs [per order] using their ecommerce tool,” he says. The tool helped Black Wolf Skincare find the cheapest available shipping carrier, he says.

“The plan started around $1,800 a month,” he says.

Using ShipHero’s software tool “was a no-brainer for us that paid for itself right away,” he says.

Shipping price fluctuations

Another pain point was price fluctuations, Lewkowict says. The men’s skincare brand could no longer ship from its one warehouse. Transit times were too slow or too expensive to ship to anywhere in the U.S., he says.

By the end of 2020, demand grew to more than 17,000 orders a month, Lewkowict says. And by the end of 2021, orders averaged about 25,000 a month. This prompted the retailer to outsource its entire shipping and fulfillment processes to ShipHero, he says.

By December 2022, Black Wolf Skincare averaged more than 40,000 orders a month.

With ShipHero, Black Wolf Skincare could inbound ship directly into any of its warehouses. Black Wolf Skincare manufactures its products in Florida.

Black Wolf sends its products to ShipHero’s West Palm Beach, Florida, facility. ShipHero then distributes shipments across its network of warehouses and carriers to ensure the fastest delivery times. As a result, Black Wolf was able to reduce the time it takes to ship orders to customers.

“Our average shipping time to customers went from five plus days to under three days for the same cost,” Lewkowict says.

That includes next-day shipping to anywhere in Texas, Florida, Georgia, New York and New Jersey, he says.

ShipHero ships Black Wolf’s orders using local carriers, Lewkowict says. “Customer satisfaction goes up as wait times decrease,” he says.

“I think a lot of brands are relying on 3PLs to bring in expertise that isn’t their expertise,” says Maggie Barnett, chief operating officer at ShipHero.

“It’s really tough to run a 3PL,” she adds. Third-party logistics services (3PLs) are the outsourcing of ecommerce logistics processes to a third-party company like ShipHero. 3PLs handle inventory management, warehousing and fulfillment operations.

“Companies want to concentrate on making the best product possible, not know what a routing guide is or worry about just-in-time delivery or that UPS is limiting your pickups, et cetera,” Barnett says.

Selling on Amazon makes a difference

Black Wolf Skincare began as a direct-to-consumer brand. But in mid-2020, Lewkowict says it realized that the brand was losing sales by not selling on Amazon.com Inc.

“We were very against going on Amazon because we wanted to have value in owning the customer relationship,” Lewkowict says.

That viewpoint changed. A consultant told Black Wolf Skincare that consumers were searching for the brand on Amazon directly or clicking on Google ads and Facebook ads and then going to search for the brand on Amazon.com. But since Black Wolf wasn’t selling on Amazon, consumers opted for products by other Amazon sellers/competitors.

“Instead of finding our product on Amazon, they’d see competitor options that were also advertising using the same keywords,” Lewkowict says.

Black Wolf Skincare launched on Amazon in 2020. Amazon sales accounted for about 10% of Black Wolf Skincare’s overall sales, he says. Since then, that percentage has grown. Selling on Amazon has “added a tremendous amount of volume and revenue,” he says, without revealing more. The average order value for Black Wolf Skincare’s DTC website and Amazon store is about $65, he says.

Lewkowict says the men’s skin care brand has capitalized off Amazon traffic. Some customers only want to buy off Amazon, he says.

“So, whether they’re seeing our TV ads or a Facebook ad, they’ll always go to Amazon to comparison shop,” Lewkowict says. “Our strategy here is to encourage those Amazon shoppers to go and buy on Amazon. Traffic that comes off of Amazon helps our ranking [on the marketplace search results]. The more shoppers search for our products, the better our ranking.”

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Moreover, app users dwelled 50% longer on the Beekman 1802 site. The app also led to a double-digit boost in cart size. Beekman 1802 credits this to My Skin Biome being a “fun and educational tool to help consumers decide on the best skin care products.”

The tool, launched in summer 2022, “assesses skin attributes and then offers a custom skin care routine based on skin’s redness, wrinkles, dark spots, hydration, texture and skin microbiome scores, while teaching users all about the microbiome and why it is important to overall skin health,” Beekman 1802 said.

Consumers can access the My Skin Biome tool, which is a mobile web app, through Beekman1802.com and submit a selfie taken in the app using the mobile phone’s camera. It provides scores based on six different attributes:

• Skin biome
• Texture
• Dark spots
• Wrinkles
• Hydration
• Redness

Users then review their scores on the attributes and select the skin concern they would like to focus on. The app then generates products tailored toward the user’s needs and skin care goals, offering users the ability to add products to their carts.

Beekman 1802 provides a QR code on its desktop website that shoppers can scan to access the My Skin Biome tool on their phones.

My Skin Biome tool empowers Beekman 1802 web traffic, sales

Consumers who use the My Skin Biome tool convert 35% more than those who don’t, Baker said. Furthermore, the average order volume for consumers who use the app is 13% larger than those who don’t. Beekman 1802 saw a 150% increase in pages per session among shoppers who use the My Skin Biome tool, and a 15% reduction in bounce rate.

“We were looking to have a diagnostic tool that would allow our neighbors — that’s what we call our consumers — to more actively take control over what is best for their skin care regimen and for us to provide them with personalized results,” Baker said. “The My Skin Biome app itself allows us to do that because it allows our neighbors to — really quickly with the use of the QR code — scan their face and deliver product recommendations based off of their particular needs.”

The My Skin Biome tool from Beekman 1802 and Perfect Corp. works directly from the website on a user’s mobile phone.

AR/AI in health and beauty

Augmented reality and artificial intelligence are becoming table stakes in the beauty industry, said Wayne Liu, chief growth officer at Perfect Corp., which creates augmented reality and artificial intelligence technology. Perfect Corp. developed the My Skin Biome tool with Beekman 1802.

“Skin care is less AR; it’s more AI because it’s machine learning,” Liu said. “It’s a diagnostics tool. Basically, we have the user scan their face, and then we’ll identify the ‘concern,’ which is the skin care problem from their photo. That’s a machine learning process.”

Extending to makeup, Liu said virtual try-on tools benefit beauty retailers because they save shoppers time and help them make decisions faster. Augmented reality helps shoppers decide what shades and products they like on themselves.

“The more you try, the more you purchase,” Liu said. “Traditionally, you probably can only try one or two colors and it will take probably 20 minutes. Right now, you can try 30 colors within like 30 seconds.”

Beekman 1802 has a physical store with its farm in Sharon Springs, New York, as well as in LaGuardia Airport. It’s also available via Ulta Beauty stores. Ulta is No. 51 in the Digital Commerce 360 Top 1000 database ranking North American online retailers by web sales.

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“We would never do that,” he says.

Instead, the online merchant of cleaning and household products has about four box sizes and two envelope sizes to appropriately fit each size order into the correct box. And for orders with a few products — the average order size on Grove.co is eight to 10 products — its warehouse workers “Tetris” or puzzle together the fulfillment box so all the products fit inside, Landesberg says.

Packing in the Grove warehouse

Stuart Landesberg, CEO and co-founder, Grove Collaborative

This packer position at the Grove warehouse is not entry level. It requires more training and comes with a promotion. Packers receive a week of hands-on training, then a month of guided supervision as they learn how to pack the boxes and their expected goals.

“The training process at Grove is longer than most ecommerce packer training programs because the nature of our product and packaging expectations requires a level of detail that isn’t always necessary in a traditional packing role,” Landesberg says. “Our team members understand the importance of optimizing products and packaging materials in such a way that does not contribute to a higher carbon footprint.”

2022 Ecommerce Fulfillment Report

Analysis of the latest trends in ecommerce fulfillment. Includes over 30 charts, shipping policies of Top 1000 retailers, Amazon’s fulfillment practices, the state of the worldwide supply chain, and updates on in-warehouse automation and delivery robotics. 

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Landesberg describes the role as a “pressure seat.” The employee receives the touts with the products picked for the order and the appropriately sized box. Then, they have to quickly fit it all in, as employees have a units per hour goal.

“In addition to specific quality and safety goals, packers at Grove have an incremental units per hour goal to meet based on how long they’ve been in the job function,” a Grove spokesperson says. “The quality goals focus on ensuring that packed items arrive to our customers safely and in good condition.”

Other warehouses might use a robot to perform this task. Grove is willing to pay a bit more to have this step of the fulfillment process done right to be a more sustainable merchant. Landesberg declined to share its warehouse employee wages.

“I haven’t seen anything robots can do as good as a human,” Landesberg says about this box packing step. Grove weekly tracks customer satisfaction and feedback as the primary success metrics for Grove packers.

A sustainable Grove

Grove launched in 2012 as ePantry, and in 2016 rebranded to Grove Collaborative, an online-only brand with sustainability as its core mission. About 13% of the products sold on Grove.co are its own brand. The remaining 87% are from other brands it sells, such as Mrs. Meyer’s, Method and Rooted Beauty. Today, Grove is publicly traded, a certified B. Corp., and sells a selection of its branded products at Walmart, Target and Amazon. Grove Collaborative generated $321.5 million in net revenue in 2022. This was down 16% year over year, the merchant reported, and it is operating at a loss.

Grove is plastic-neutral, meaning for every pound of plastic sold, it collects and recycles that same amount in nature through rePurpose Global. Its goal is to be plastic-free by 2025. And that means Grove Collaborative has routinely iterated on its product and fulfillment packaging.

Packaging: lighter, smaller and less

To achieve the lowest carbon footprint on a fulfillment box, it’s all about lower weight, smaller size and less package, Landesberg says.

Grove focuses on only selling products that are smaller in size — or changing them to fit this mission. For example, instead of selling a full-size mop, which is bulky to ship, it made its broom stick collapsible to fit into a much smaller box. That brings Landesberg to a tip for merchants striving to be more sustainable: Invest in multiple box sizes.

“The best solution is well-trained labor and enough box sizes that you can match products to appropriately,” he says.

At one point, Grove had 30 box sizes. Now, it has settled on its four boxes and two mailers, which can appropriately fit its all of its orders.

Fewer boxes per order

Another shipping practice that Landesberg claims Grove “would never do” is splitting up an order of eight to 10 products into eight to 10 shipments. The carbon footprint is much larger for multiple boxes instead of a slightly larger box that can hold a few more objects, he says.

While orders arriving in multiple boxes sometimes happens, especially for larger orders, Landesberg says split shipments are less than 5% of all of its orders. This is below the industry standard, in which 21% of orders from an online retailer arrived in more than one shipment, according to data from fulfillment vendor Narvar Inc. collected October-December 2021.

Because Grove launched as a vertically integrated online brand, it purposely designed its products to ship directly to consumers, not for a store shelf, Landesberg says. For example, it’s laundry detergent is sold in a 1-ounce concentrated glass bottle that shoppers can mix with water at home, unlike the large bottles sold in stores. Its candles are packaged in a box with a thinner glass, unlike the freestanding, thick-glass candles at stores.

These modifications to the product package allow Grove to ship orders to consumers in a way that weighs less, takes up less space and uses less interior packaging in the box.

And after the packages are snuggly fit in the box, Grove uses a recycled paper to pad the products during the shipping journey. In May 2019, Grove went through its supply chain and eliminated single-use plastic and switched to paper materials.

Grove.co’s paid members are its more frequent purchasers

These initiatives resonate with a certain cohort of shoppers who strive to live a sustainable lifestyle. Grove is No. 301 in the 2022 Digital Commerce 360 Top 1000.

About half of Grove.co’s sales are from shoppers making one-time purchases priced 5-20% above the discount it gives consumers who sign up for a subscription to products.

The other half of Grove.co’s sales are from consumers who signed up to receive auto-replenishments of  products or paid $19.99 for an annual VIP program membership. Members receive seven free gifts a year, exclusive sales, early access to new products and free samples. Landesberg says “hundreds of thousands” of customers are paid members, but declined to share the exact number.

Nearly 50% of paying members renew memberships annually, Landesberg says.

Landesberg says he is pleased with this membership retention rate. He points to the value of the program, the strong brand and engaged community as reasons for this retention rate. For example, members can join its private Facebook group, which is “incredibly engaged,” Landesberg says.

The average order value for traditional shoppers compared with members or subscribers is about the same, Landesberg says. He did not reveal that figure. The frequency of purchasing, however, is much higher for members and subscribers, from six to 12 times per year. That compares with traditional shoppers, which is about four times per year.

Grove expands its retail presence

But even with such high engagement rates on its own site, Grove Collaborative knows many shoppers still do not recognize its brand.

To that end, since 2021, Grove has sold a selection of its products with national mass merchants including Target Corp. and Amazon.com Inc. In 2022, Grove expanded to sell its products in CVS Caremark Corp., Harris Teeter Supermarkets LLC, H-E-B Grocery Company, Meijer Inc. and Giant Eagle Inc. Today, Grove products are sold at thousands of retail locations, including at mass merchant Walmart Inc.

“To change the category, we need to play in the channels where the majority of people are buying these products,” Landesberg says.

But the goal, Landesberg says, is not to introduce them to Grove on Target and then get them to buy that product on Grove Collaborative.

“It’s my goal to get them to come back and get them to buy that product again,” Landesberg says.

“Economically, yes, we make more money when they buy their entire regimen from Grove,” he adds.

He knows the majority of shoppers don’t buy their household cleaning and personal care products directly from a brand’s website. They buy these products from a mass merchant. Grove declined to share what percent of its sales are from its direct-to-consumer site or from other merchants.

Kathy Kimple, executive director, digital strategy, at ecommerce consulting firm OSF Digital, says it’s interesting to see subscription-based companies expand into retail. Shoppers save on shipping and get the product immediately. Meanwhile, the brand gets more exposure.

“As access to their products grows, there will be less need for subscription,” Kimple says. “Depending on the company’s goal, lower subscriptions may be offset by brand awareness if retailers start to carry more Grove products.”

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Everybody’s doing it

On a positive note, all of those surveyed indicated they buy beauty products online. A look at the numbers suggests 70% of online shoppers buy beauty products online at least monthly (some going as far as buying daily). Furthermore, 31% of that group is buying online at least weekly. The remaining 30% purchase on an annual basis, so everyone has embraced the online channel.

Retailer segments play into online beauty product sales

Online beauty shoppers search for particular products and brands, taking advantage of a range of retailers to meet those needs. Each retailer segment has a role to play, though competing with Amazon and other mass merchants is challenging. Amazon tops the list of merchants shopped online at 59%. Meanwhile, mass merchants like Target and Walmart come in at 52%, and drug stores follow at 36%.

Amazon also tops the list of Top 1000 retailers. The Top 1000 is Digital Commerce 360’s database ranking the largest online retailers in North America by web sales. Walmart ranks No. 2, and Target is No. 5.

Amazon is also No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces.

Specialty beauty retailers are strong, as shoppers cited buying from both standalone choices at 29% and their partnerships with larger retailers (27%). With Ulta and Sephora partnering with major retailers like Target and Kohl’s, access to these products has certainly grown, and shoppers have taken notice.

Department stores have lost market share to other retailer sectors as shoppers change how they buy. One in four survey respondents reported shopping at them.

Direct-to-consumer brand shopping at 21% is meaningful, with 12% penetration among digitally native, vertically integrated brands (DNVBs), sounding a positive note for brands going direct.

New to our survey this year were marketplaces beyond Amazon, at 18%, and social media ads at 15%. Both should see gains among their respective audiences in years to come.

Dimensionality is the differentiator

Beauty buying online is multi-dimensional, from replenishment to experimentation and education, where execution can be a differentiator. The web is perfect for comparison shopping, and 36% felt it was easier to do that online. Shoppers also spend time learning about products and experimenting, helping to make new product sales viable with purchases taking place online and offline.

From an education and experimentation point of view, online shoppers were learners at their core in the following ways:

• Learn about new brands and products, and buy online: 30%
• Learn about new brands but buy in physical stores: 22%
• Experiment online when looking for new products: 22%

Given the nature of the beauty category, 34% report that most of their purchases are for replenishment. The significant loyalty to brands is critical for retention, as their loyalty to brands and products in the beauty category leads to frequent buying for 34% of participants. Another online driver is finding out-of-stock products in the stores. That was a reality for 31% of those surveyed.

Product detail pages are critical to buying beauty products online

Beauty is a feature-rich category, and online shoppers are hungry for product information.

Information of interest includes product details (56%) and the all-important product availability coming in No. 2 (55%). A list of ingredients is desirable for 48%, and 23% call out the ever-growing interest in vegan and cruelty-free products. Of course, imagery is not to be slighted, as 25% believe ample product images have a role to play.

Online shoppers appreciate saving money, embracing promotions and samples (27%) and gift with purchase promotions, a beauty mainstay at 19%.

Selection tools are playing an increasing role in profiling shoppers and assisting them to make smart selections. That includes the ability to profile beauty needs (22%), how-to guides or video tutorials (12%) and virtual try-on tools (11%)

Logistics will be top-of-mind, making in-store pickup (BOPIS, 17%) and curbside pickup (13%) options desirable. Mobile apps, which 12% noted, will undoubtedly play a role, as does the retailer’s social media presence at 9%.

Shoppers find value in using tools to assist in beauty purchasing

• Color-match tools: 35%
• Virtual try-on tools: 21%
• Augmented/virtual reality: 10%

Customer service sees online shoppers embracing chats with beauty experts along with other outreach. Chatting with a beauty expert (23%) topped the list. Others of interest among beauty buyers were sending a question to a retailer (17%), sending an image to a retailer (15%) and booking an in-store beauty appointment (13%).

Beauty subscription boxes see adoption and this bodes well for future purchasing as 20% tried this model. Lastly, 15% watched a livestreaming beauty event while 17% downloaded a retailer’s mobile app (17%).

Shopping perks and experiences

Saving money and perks matter most to price-conscious online shoppers and that meant rewards program perks for 36%. 26% gravitate to brands believing they would be more likely to offer free shipping. And speaking of shipping, 21% of respondents felt they would get their products quicker.

A strong beauty shopper experience starts with trust, broad assortments and comprehensive content all serving to inspire the shopper. Our results revealed that 23% had greater trust in brands, while 22% enjoyed the broader product assortments seen among these companies. Along with the trust factor, 22% had less concern for counterfeit goods among brands.

The experience also came into play, with 19% choosing brands for their more comprehensive content and the complete brand experience. They cited a more authentic experience (16%) and the fact that brands were more transparent about both the values and products they sell (14%). That same 14% cited they enjoyed being part of the brand community, with 12% finding the sites more inspiring.

The biggest influence

There are a broad array of influencers when it comes to selecting beauty products, but friends come first, where just under half (46%) acknowledge their role. That compares with just 15% who pointed to celebrity influencers.

Beyond influencers, video is a strong factor in beauty selection. That starts with YouTube (32%) and continues to how-to videos/tutorials (23%) and livestreaming events (11%).

Retailers must have strong content across social media to optimize the impact of influencers. The numbers here came in for Facebook (31%), Instagram (29%) and TikTok (26%), respectively.

Beauty subscription services can play an influential role as well among the 16% who had signed up for them.

Reasons to walk into a store

Store visits persist.

When asked about when they choose to go to a physical store, almost half of online beauty buyers said they need their products quickly (47%) or want to see the products in person (46%). Other tactile reasons include in-person testing (36%) and simply getting a full sense of the brand experience (16%). Some 20% also enjoy getting advice from in-store experts.

Shoppers also will seek out the store channel when they want to save money. That includes in-store sales or promotions for 39% and not wanting to pay for shipping for 37%. Omnichannel needs, from pickups to returns, prompt visits. They included an option to do both of these for 18% of survey respondents.

20% want to support local retailers post-COVID, along with attending an event at 10%.

There is a trust factor as well for 14% who are more confident buying in person. 12% expressed a concern that online shopping will mean receipt of counterfeit goods.

Does it look good?

Next we dove into how a site presented itself. First and foremost, the site look and feel is most important to online beauty buyers. 41% of survey respondents cited that element. Other important presentation factors were accurate swatches that aren’t photoshopped (35%) and model diversity (22%).

Thus, branding from sustainability to one’s story and stances including diversity, trade, social and charitable elements continue to see interest among shoppers. It is nice to see sustainability rise to the top of this group, and therefore it deserves a mention.

Online shopper sentiment was as follows:

• Sustainability practices: 25%
• Brand’s story: 24%
• Diversity stance: 21%
• Fair trade views: 18%
• Social and political views: 18%
• Charitable giving: 15%

Long-term value

It’s powerful to see that more and more shoppers care about sustainable beauty brands.

78% of these online shoppers factored in sustainability when purchasing beauty brands. Some 19% already buy these products (19%), and some are even willing to pay extra (18%). The largest segment (28%) is those who care about sustainability but do not yet put their pocketbooks on the line to seek out such products. 13% don’t want to pay more. The opportunity is to convert those who care and haven’t yet converted to becoming customers.

In many ways, beauty is one of the easiest categories for online consumption. Shoppers can get comprehensive information to guide their decision-making on first-time purchases. Then, replenishment kicks in and buying is almost on autopilot. Online shoppers have many choices, so the brands retailers put forth, the features, and tools they employ to guide their customers will ultimately determine their market share.

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The post The Shopper Speaks: The buzz around buying beauty appeared first on Digital Commerce 360.

It produces six blogs a week, some of which drive more than 9,000 visits per month, she says.

To achieve this, she uses a technology trio:

• Ahrefs, an SEO tool for growing search traffic
• Surfer SEO, which helps the retailer grade and rank content
• Jasper, an AI content generator to write the posts

Asian Beauty Essentials made its blogs shoppable in October 2022, she says. Petrullo first identifies the blogs that are generating the most traffic, then adds shoppable components to them to see if that will drive conversion. That includes both links back to the ecommerce portion of AsianBeautyEssentials.com as well as products shoppers can add to their cart directly from a blog page.

For example, an Asian Beauty Essentials blog called “The Easiest 5 Step Korean Skin Care Routine for Rookies” suggests products that each have an “Add to Cart Now” button. Clicking on the product images or titles takes shoppers to each product listing page.

Asian Beauty Essentials adds products to its blogs so shoppers can put them in their carts without leaving the page.

Once a blog post on Asian Beauty Essentials starts to convert orders, Petrullo measures how many shoppers add products from that post to their carts and how many shoppers complete the purchase as opposed to abandoning the cart. She also checks the average order value from the blog post to determine if she should create similar blog posts or take a different approach.

After making the brand’s blog posts shoppable, its average order value grew to more than $100. That compares with about $34 prior to making blogs shoppable.

Petrullo says she made the decision to add Spanish-language blog posts in June 2022 after going through her customer list and evaluating where orders were coming from and what customers’ last names were.

“My current focus is making sure the content is authentically correct and therefore a really good user experience,” Petrullo says. “I trust that the conversions will come later, and so far, those hypotheses have been winning out.”

Expanding artificial intelligence to email

Asian Beauty Essentials uses Klaviyo as its email marketing provider.

Klaviyo determines the average order value for different customer segments. Among the biggest insights Klaviyo provides, she says, is how many times a customer has purchased after clicking on an email and what products she purchased together.

But she says she especially values the AI components Klaviyo offers. The vendor sends emails at the times a consumer is most likely to open it and engage on a link. Brands can also send emails based on when customers are likely to finish products that need replenishing. She also used Klaviyo’s “Back in Stock” feature, which adds a “notify me when available” button on the website to products that are out of stock. This helps her determine how much product to reorder.

Klaviyo can also automatically exclude customers from email lists if they have already bought items the email is promoting.

She says all the AI technology was a “huge, huge investment,” and it seems to have paid off.

Read more

This is part of Digital Commerce 360’s March 2023 Strategy Insights edition. Our members have access to all the articles in this month’s issue, Data-Driven Retail.

This article is part of a larger piece, “Retailers use data to improve web conversion and improve the customer experience.”

The post AI powers Asian Beauty Essentials   appeared first on Digital Commerce 360.

The post Retailers use data to improve web conversion and improve the customer experience  appeared first on Digital Commerce 360.

Ulta is No. 51 in the 2022 Digital Commerce 360 Top 1000 database ranking North American web merchants by sales.

Omnichannel grows

Though Ulta didn’t share what percentage of sales were made online, it did say the number of those orders fulfilled by stores increased. 31% of online orders were fulfilled through buy online, pick up in store (BOPIS) and ship from store in 2022. This was a slight increase from 28% of online orders fulfilled this way in 2021.

Ulta plans to open 25 to 30 new stores in fiscal 2023 and remodel or relocate 30 stores throughout the year, CEO Dave Kimbell said.

New digital experiences

Kimbell credited a “phased refresh” of the company’s online store with some of the increased sales from the year and quarter in a call with investors.

Ulta added several virtual try-on tools in 2022, including the GLAMlab Skin Advisor 2.0 for trying on makeup, and the hair try-on tool.

Focusing on loyalty and data in 2023

Ulta added 3 million loyalty members in 2022, reaching a membership of 40.2 million. These rewards members shop at Ulta more frequently, and spend more on average, than non-members, Kimbell said.

In 2023, the beauty chain plans to continue improving its digital offerings, which will further increase membership, Kimbell told investors.

Ulta will also use analytics and customer data to bring back lapsed customers and increase retention, he said.

For the fourth quarter ending Jan. 28, 2023, Ulta reported:

• Net sales increased to $3.2 billion, an 18.2% increase over $2.7 billion the year prior.
• Net income reached $340.8 million, a 17.8% increase from $289.4 million in 2021.
• Ulta opened 12 new stores, relocated one store, and remodeled another 12.

For the year ending Jan. 28, 2023, Ulta reported:

• Net sales increased 18.3% to $10.2 billion, an increase from $8.6 billion in 2021.
• Net income grew 26% to $1.2 billion, up from $958.5 million in 2021.
• Ulta opened 47 new stores, relocated 12 stores, and remodeled 20 stores.

Percentage changes may not align exactly with dollar figures due to rounding.

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On Thursday, the company listed about 20 locations on its website. Forma Brands, Morphe’s parent, said in a statement that it’s shutting down its physical stores to focus on ecommerce and wholesale.

Partnerships with powerhouse internet celebrities such as Jeffree Star and James Charles helped revenue top $400 million in 2019, according to a company presentation from December 2021 reviewed by Bloomberg. But Morphe severed ties with them after Star was accused of using racist language in 2020. And allegations of sexual misconduct plagued Charles in 2021.

Revenue dropped as social media influencers lost favor with consumers

Results at Forma, which generates about 80% of its sales from Morphe, have since suffered. Revenue missed internal planning by about 20% in 2021, according to the document. In the first 10 months of that year, revenue tied to Charles, Star and Jaclyn Hill — another social media star — fell 66% to $32 million.

Morphe, known for its accessibly priced eye shadow palettes and frenzied store openings, relied on social media presence.

“It’s a risky model,” said Kelly Dobos, a cosmetic chemist who works as an industry consultant. Influencers “always become less relevant.”

Ending relationships with Charles and Star left the company with an abundance of inventory it had trouble selling, according to a former employee who asked not to be identified. The company also spent heavily to launch a makeup line with pop star Ariana Grande, but sales disappointed, according to a second former employee.

Morphe, founded in 2008 and based in Los Angeles, won fans with cheaper options often tied to influencers with huge fanbases — Star and Charles each have more than 15 million followers on YouTube.

Morphe ranks No. 312 in the Digital Commerce 360 Top 1000.

2022 Top 1000 Report

Analysis of North America’s leading 1,000 online retailers. Includes over 100 charts, rankings by 2021 web sales, benchmarking data, growth analyses by category and merchant type, and an executive overview on the current state of ecommerce. 

View Details

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