By 2020, the U.S. beauty market is expected to be worth $100 billion — just a fraction of the projected $750 billion global beauty market. Brands looking to be major players in the industry should turn to technology to do so, according to Karin Tracy, head of industry, fashion, retail, luxury at Facebook.
Tracy outlined how beauty brands should be using technology to reduce the friction points between products and consumers.
By 2023, 51 percent of cosmetics and personal care revenue will be generated by online sales. That number is currently 39 percent, 70 percent of which comes from mobile devices. And yet, according to Facebook research, it takes an average of 22 clicks for a person to get to a product online.
“That’s 22 reasons for her to walk away from you,” Tracy said.
Generation Z, which accounts for one-third of the population, should be at the center of brands’ strategies.
“Gen Z is the largest global consumer group out there,” she said. “They are your biggest opportunity, but they can also be your biggest critic.”
Gen Z is diverse and multicultural, and spends an average of five hours per day on mobile apps and services, according to Tracy. This age group is primarily focused on video content, watching an average of 68 videos per day — though they aren’t watching commercials. They are also spending more — 66 percent more — than the average consumer.
For brands to succeed in an increasingly tech-savvy world, Tracy recommends erasing the notion of “off-line versus online.” Omnichannel shoppers, she said, are 30 percent more valuable over a lifetime, and 79 percent say they will be more loyal to a brand if it has a great experience in-store and online.
Facebook is leading by example, making it easier for Instagram users to shop within the platform. The company is rolling out new features, such as dynamic ads on Stories, action buttons on profile pages, Instagram Checkout and Shopping from Creators.
Friction points, said Tracy, are the cause of an estimated $213 billion loss in potential revenue in the U.S. She recommends brands focus on continuity, content and a call to action to avoid this potential loss.