How beauty and wellness brands are navigating online marketplaces in 2024

Amazon is one marketplace that continues to reshape the way wellness and beauty consumers redefine their expectations and shop. In its relentless pursuit of innovation, the retail behemoth presents new and exciting avenues for the brands that reach them.

According to a 2023 Statista report, Amazon’s share of total retail e-commerce sales in the U.S. is expected to reach nearly 41% by 2024 (up 1.2 percentage points from 2023). More significant for beauty and wellness brands, the health and personal care sector — the third-largest segment within Amazon’s offerings — is anticipated to grow 1.5 percentage points to nearly 35% next year. 

But to seize on these marketplace-driven opportunities, brands must adapt and innovate by integrating social commerce, harnessing generative AI and embracing data-driven decision-making. 

As social commerce gains popularity, brands must integrate to thrive

Social commerce is a trend with a considerable surge in power. Brands and sellers are tapping into the power of social media platforms to connect with consumers and drive sales, with platforms like TikTok Shop and Facebook Marketplace vying to become premier destinations for unique and trendsetting products. Amazon, too, is actively exploring avenues for integrating social commerce into its ecosystem, providing fresh avenues for beauty and wellness brands, for example, to display their products and engage with their audience.

This evolution will be driven by a notable expansion in the integration of e-commerce features, allowing users to seamlessly explore and purchase products directly from their social media feeds. 

This transition means that it’s not just social media platforms that will enhance e-commerce features; Amazon sellers and affiliates must be prepared to adapt and thrive on various platforms throughout 2024.

In embracing generative AI, retailers are reshaping advertising tools

The groundbreaking technology of generative AI will be key for online players such as Amazon, Google and Walmart as they redefine customer experiences and streamline merchant operations across e-commerce platforms. 

For example, Amazon is gearing up to introduce an AI chatbot feature into its search capabilities, enhancing product recommendations and comparisons, thereby simplifying the shopping journey. 

Similarly, generative AI is revolutionizing beauty retail by enabling virtual try-ons for makeup and skincare products, providing customers with a personalized and interactive shopping experience. From AI-driven recommendations to chatbots offering instant beauty advice, these technologies are reshaping the way consumers engage with beauty brands online and bridging the gap between online and in-store experiences. 

Google’s knowledge panel will also offer real-time information, including deals, shipping details, customer service contacts and user ratings, transforming the way consumers access critical data. 

With a significant portion of consumers initiating their shopping journeys online, retailers such as Amazon and Walmart have recognized the importance of adapting and optimizing their search functionalities to stay competitive in the face of emerging competitors. Generative AI is also reshaping advertising with tools to empower advertisers to create engaging product imagery. As this technology evolves, it holds the potential to deliver highly personalized listings based on individual consumer preferences.

Brands are focusing on data-driven insights and standout features to hook consumers

To remain at the forefront, brands and sellers need to harness the power of data-driven insights for more informed decision-making. Next year, Amazon is set to offer even more robust analytics tools, empowering businesses to understand consumer behavior, optimize marketing campaigns and enhance their product offerings. The mastery of data is no longer a luxury but a necessity for brands seeking to excel. Because of Amazon’s ownership of the whole consumer ecosystem — from awareness to purchase — it’s an especially powerful advertising tool. 

For example, tools such as Sponsored Products and Sponsored Brands can provide beauty and wellness brands valuable insights into consumer behavior, enabling brands to refine their marketing strategies and make data-driven decisions for a more effective and targeted approach. 

When Amazon introduced ‘Buy with Prime,’ which seamlessly serves as a way for D2C sites to utilize Amazon’s checkout and fulfillment, it significantly reduced conversion rate friction and made it a game-changer for brands and sellers.

In its commitment to providing diversification strategies for its sellers, Amazon is introducing Amazon Prime Streaming ads in early 2024. This game-changing feature bridges content and commerce in an immersive manner, offering a unique advertising platform within Prime Video. 

“To unlock the full potential of Prime Video Streaming Ads, brands need to focus on three key elements: unlocking in-depth insights from Amazon Marketing Cloud, excellence in DSP campaign management and strong video creation capabilities,” says Tim Nedden, managing director of e-commerce management at Front Row. “These ads provide brands access to premium video placements at scale. Leveraging AMC, advertisers can precisely target key audiences, turning TV ad costs into measurable video investments.”

The introduction of advertisements in Prime Video shows and movies, with significantly fewer ads compared to traditional TV and other streaming providers, will provide brands in the beauty and wellness sectors with a compelling channel to showcase their products. 

For success on Amazon, beauty and wellness brands should leverage this opportunity by creating visually appealing and informative ads that resonate with the platform’s diverse audience. Incorporating customer testimonials, product demonstrations and highlighting unique selling points can help these brands capture consumer attention. 

This proactive engagement with Amazon’s advertising features sets the stage for beauty and wellness brands to not only increase visibility but also build meaningful connections with their target audiences on the platform.

The future of marketplaces involves agility, innovation and remaining consumer-focused

As Amazon’s path for 2024 unfolds, beauty and wellness brands must retain their agility, adopt data-driven practices and remain relentlessly consumer-focused. From the continued ascent of voice commerce to innovations in augmented reality shopping experiences, staying competitive on Amazon will demand agility. Moreover, forging an omnichannel presence is the need of the hour. While Amazon dominates the e-commerce sphere, successful brands seamlessly blend their online and offline operations. 

To effectively navigate marketplaces in 2024, beauty and wellness brands are embracing innovations while staying attuned to emerging trends. The convergence of the online and offline realms, combined with the integration of social commerce and a commitment to data-driven decision-making promises to guide brands into a future teeming with exciting potential.

Sponsored by Front Row