The goal of Amazon Beauty is simple: offer consumers the same selection as provided by other beauty competitors. Having spent several years internally at Amazon Beauty, managing and launching hundreds of beauty brands, I know that Amazon aims to gain parity with the other leaders in the beauty space, including beauty specialist retailers (Sephora, Ulta), Department Stores (Nordstrom, Bloomingdales, Macy’s, etc.), Mass Retailers (Target, Walmart), and Drugstores (CVS, Walgreens, etc.). Amazon will admit that they are not a leader, but a follower in the space; Amazon looks to the established players when determining which brands to seek out and prioritize launching. To compete with beauty industry leaders, Amazon launched Luxury Beauty almost seven years ago—rebranded as Premium Beauty a few months ago. A gated community for high-end beauty brands, Amazon’s Premium Beauty has sparked contempt from one industry leader in particular: Sephora has been unsympathetic toward its brands that are also exploring joining Amazon Premium Beauty. In my role at Stella Rising, I help brands navigate both Amazon and the beauty world; in this piece, I will offer ways to make the most of both.
A LITTLE HEALTHY COMPETITION?
There are various ways for beauty brands to sell their products on Amazon: Mass Beauty, Indie Beauty, Premium Beauty, and Professional Beauty. Sephora specifically dislikes Premium Beauty. Recognizing Amazon as a threat, Sephora has attempted to stop its brands from entering Amazon Premium Beauty, threatening to discontinue their relationship or pull products off the shelf. It is common and justified for luxury beauty brands to fear Sephora’s consequences resulting from a partnership with Amazon.
A brand’s reaction to Sephora’s concerns is largely impacted by the role that Sephora plays in the size of its overall business. Brands for which Sephora represents 75% of their business, for example, are highly likely to respect that relationship above all others. That said, there are many Sephora brands that have made their way into Premium Beauty directly: L’Occitane, Foreo, Sunday Riley, Stila, Mario Badescu, Jack Black, CLEAN Fragrance, Buxom, Amore Pacific, Beauty Bio, Yuni, St. Tropez, Morrocanoil, Perricone MD, Cover FX, and many more.
How were those brands able to launch on Amazon and maintain a Sephora presence? There are several ways to sidestep the Sephora/Amazon conflict. The most obvious is being grandfathered into Amazon Premium Beauty years ago, before Amazon began taking such a large size of the prize (Stila and L’Occitane were early to Amazon, for example). However, without a time machine, the options include:
- Offer Amazon a different assortment than that carried at Sephora or on Sephora.com. Amazon will not be thrilled with this, as their goal is parity not only in brands, but also in product; but this solution will appease Sephora, avoiding direct competition. This has worked well for many brands who offer different products—and even different collections—entirely.
- A newer solution is to launch in 3P Premium vs. 1P Premium. Since inception, Premium Beauty has been exclusively for Vendors (brands who have a direct relationship with Amazon). However, that changed a few months ago when Amazon opened Premium Beauty up to Sellers, too. Amazon does not buy directly from Sellers—consumers do—therefore it is not considered a direct relationship. That approach is new, still very exclusive, and invite-only. The following Sephora brands have been invited to join: Murad, Dermalogica, Virtue Labs, Too Cool for School, and Living Proof.
- For the brands who still want to sell on Amazon, but do not want to ruffle any feathers, there is the option to launch as a 3P Seller in Mass Beauty, avoiding Premium Beauty entirely. Sephora does not seem to mind this option, as Mass Beauty brands do not have the “Premium Beauty badge” and are not considered the same caliber as Sephora. Cons include: not receiving gating—meaning an open marketplace with unauthorized sellers—and no access to the elevated shopping experience and brand presence that Premium Beauty offers. However, there will be no pushback from Sephora, a huge positive. Brands who have taken this approach include Winky Lux, Kopari, First Aid Beauty, Beauty Blender, and Briogeo; all have set up their own FBA accounts.
- A less common, more passive approach is to choose an authorized seller to represent the product, rather than having the brand set up the account. Drunk Elephant, Ouia, and Devacurl have taken this approach, allowing reputable sellers and 3PL businesses to run their accounts. Via this hands-off approach, the brand has an Amazon presence, but avoids the logistics and a possible scandal.
Other brands, such as Wander Beauty or the entire Estée Lauder portfolio, refuse to join Amazon Beauty at all. Ultimately, every brand comes with its own unique opportunities, and, therefore, unique set of challenges. Many of the brands reviewed here understand the incremental opportunity of joining Amazon, are bold enough to make the move, and are certainly seeing results. If you are a Sephora partner brand considering Amazon Premium Beauty, reach out to us to see what the options are for you.