AU Market Beauty Industry Data Report

AU Market Beauty Industry Data Report

A Digital Marketing Perspective: How Brands & Retailers Can Compete in Australia

The beauty industry in Australia is shifting rapidly, and the market is ripe with opportunity for brands who can adapt. Skincare and cosmetics have seen the most growth, and competition has increased as international products flood the market. Luxury brands have fed much of this growth, as Aussies opt to spend more money on premium products.

As the marketplace opens and diversifies, both beauty brands and retailers must juggle several market forces:

Beauty brands today must contend with their products being sold on a variety of retail sites, and fight to retain brand loyalty within that.

Retailers, including department stores, chemists and beauty-specific e-commerce sites compete for their share of this growth.

Amazon has entered the market, and although the inital launch was slow, its international scope has put both retailers and brands on edge.

This report helps marketers navigate these challenges, and turn them into opportunities. With examples from brands like Neutrogena and Lush, and retailers like Priceline and Amazon, we’ll explore how brands and retailers can track changes in digital behavior to get ahead of trends and better establish their brand.

1. Site Engagement: Beauty Brands vs. Retailers

In general, beauty retailers receive more traffic than individual brands do. However, studying differences in site engagement, such as time spent or frequency, provides a helpful window into how brand websites support shopper research and brand loyalty.

Traffic Trends – Retailers vs. Beauty Brands

Looking at visitation to the top beauty sites from the beginning of 2018, we see that retailers Adore Beauty and Nourished Life have the highest traffic levels, ahead of individual beauty brands as well as the Beauty sections of department stores David Jones and Myer.

Hitwise Beauty Report: Beauty Websites
Source: 8 weeks ending 3/3/2018.

This suggests that although beauty brands inevitably receive more targeted, brand-loyal customers onsite, there are more potential customers perusing sites like Adore Beauty, where shoppers are researching and comparing a variety of brands.

Engagement Levels – Retailers vs. Beauty Brands

Generally, retailers get more traffic than brands do. But when it comes to on-site engagement, brands tend to see higher levels of site engagement than the retailers, with longer visit times, more page views per visit, and higher visit frequency.

Hitwise Beauty Report: Engagement
Source: Pulled over 8 weeks ending 3/3/2018.

This suggests that even if more consumers purchase beauty products from retailers, brand websites remain a critical touch point in the research phase. Consumers will generally consume more content on a brand’s website, meaning it’s the ideal place to invest in helpful content, for example DIY makeup tutorials, application tips and product details.

2. Using Internal Search for A Smarter Retailer Strategy

For beauty brands, improving performance on multiple retailers can be tricky. Internal search data can help shed light on changing demand for specific products across different affiliates, and help brands make more strategic promotional choices.

Department Stores – How Search Can Shape a Launch

Let’s say Tommy Hilfiger is releasing a new fragrance, and is planning a special promotion in partnership with either Myer or David Jones, the two biggest upmarket department stores. At first glance, Myer might seem like the best candidate because “tommy hilfiger” is the #1 branded search on Myer within the first quarter of 2018, and pulls more search share than on David Jones.

Hitwise Beauty Report: Internal Searches

However, if you trend these searches over the quarter, you see that demand for “tommy hilfiger” is rising in David Jones, while searches are dropping in Myer. Based on this, Tommy Hilfiger may split the budget between both sites, or wait to see how demand fluctuates before the launch.

Pharmacy Sites – Charting Brand Demand

Two top pharmacy websites, Chemist Warehouse and Priceline, show some variety in their top internal beauty searches. While both sites carry a range of personal care products, Chemist Warehouse attracts more fragrance searchers, while Priceline attracts more cosmetics demand.

Internal searches on Chemist Warehouse are concentrated highly amongst luxury perfume brands like Calvin Klein, Bvlgari and Gucci, who each pull anywhere from .5% to 2% of all internal searches. Interestingly, all of these searches shot up in March, possibly due to a fragrance sale.

Hitwise Beauty Report: Chemist Warehouse
Source: Pulled over 31 days ending 31/01/2018 (January), 28 days ending 28/02/2018 (February) and 31 days ending 31/03/2018 (March).

Meanwhile, the top branded searches on Priceline pull a relatively smaller share (anywhere from .1% – .8% of internal searches), suggesting there aren’t as many “dominant” beauty brands on Priceline. The month-to-month fluctuations also suggest variability in demand, and more room for new brands to jump to the top of the pack.

Hitwise Beauty Report: Priceline
Source: Pulled over 31 days ending 31/01/2018 (January), 28 days ending 28/02/2018 (February) and 31 days ending 31/03/2018 (March).

If a beauty brand sees there is room for new players to emerge on Priceline, how do they become top-of-mind? One way to compete with other brands within a retailer is to understand the specific products that people are seeking out. We’ll explore how to do that on the following page.

Priceline Spotlight – Uncovering Trends with Unbranded Terms

Charting generic search terms can help brands identify new trends and get ahead of consumer demand. Charting internal unbranded terms searched in retail websites can help brands tailor their strategies to meet the needs of customers across different affiliate sites.

For example, within Priceline, shoppers are increasingly interested in primer, dry shampoo and nail polish in the lead up to Q2, whereas demand for toner, foundation, concealer and wax is flattening out or dropping. Beauty brands selling on Priceline could use these indicators to shape their merchandising or promotional strategy in the second quarter of the year.

Source: Pulled over 31 days ending 31/01/2018 (January), 28 days ending 28/02/2018 (February) and 31 days ending 31/03/2018 (March).

3. Amazon vs. Google Strategy: Neutrogena Spotlight

Although Amazon Australia’s launch failed to make waves initially, it has recently become their fastest-growing marketplace. As more Australian shoppers compare on Amazon, their search behaviour provides valuable insight into how consumers research and buy beauty products across search engines and retail sites. vs – Where do Consumers Search?

Since the launch of Amazon in December, Australians have started seeking and buying a mix of beauty products from as well as Below, we see that Neutrogena offers numerous products in the Beauty category for both markets — how do searches for Neutrogena products differ on vs.

Pulled on 05/01/2018. based on top “Beauty & Personal Care” brands, based on Top “Beauty” Brands

Below, we see that most Neutrogena products, for example acne products, concealers, moisturisers and cleansers, are more likely to be searched by Aussies on A couple of specific items, such as the Light Therapy Mask and the Rainbath body wash, are more likely to be sought on As has only 2/3 the amount of products that has available, the American site still dominates the Aussie research process.

Hitwise Beauty Report: Amazon Searches
Source: Pulled during Q1 of 2018. Line indicates search volume too small to measure.
Amazon vs. Google – Evaluating Difference in Demand

Next, let’s explore how people search for Neutrogena products on Amazon vs. on Google.

Hitwise Beauty Report: Neutrogena Search Terms
Source: Google search and Amazon internal search data pulled in Q1 2018. Based on share of “Neutrogena” searches within Amazon’s site, compared to share “Neutrogena” searches within Google Search.

In general, we see that Amazon searches tend to be more specific, whereas Google searches are generally broader. It suggests that consumers use Google to cast a wider net in the research phase, whereas they are more likely seek out specific items on Amazon.

This also helps brands like Neutrogena identify the specific products people seek out on Amazon vs. Google. Based on the findings below, they might invest in Amazon product listings for the Skinclearing Blemish Concealer and Oil Free Moisturiser, and dedicate separate budget to Google PLAs and SEO optimisation for the Light Therapy Mask and Hydro Boost products.

Key Takeaways

Brand websites remain a crucial part of the loyalty and comparison process: Beauty retailers tend to get more traffic than brand websites, but brand sites get more onsite engagement. It’s essential that beauty brands leverage their site to educate, inform and guide shoppers in the comparison process.

Internal search data can help brands improve performance across multiple retailers: Tracking internal search across different retailers can help beauty brands identify trends, measure product demand and understand where their items are most in demand.

Tailor your product listing strategy based on how consumers actually search on retailers (Amazon) vs. on search engines (Google): In general, Amazon product searches are longer and more specific than those on Google, which tend to reflect an earlier research mindset. Tailor your keyword and listing strategy to match the way consumers seek out your products across search engines.

Want to understand your consumers better? Check out our consumer insights to learn how you can tailor your strategies to your audience.

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