How Customers Shop Online for Health and Beauty Products

Health and beauty retailers are seeing a trend toward online sales: 18% of total U.S. spending on beauty and personal-care products occurs online, to a price tag totaling $12 billion.1 These items—which include makeup, razors and contacts—are small personal necessities, meaning the orders are inexpensive to ship and get repeated consistently.

By understanding who is buying what in the health and beauty categories, which types of businesses they turn to for these products, and how often they shop, you can confidently plan to start or enhance your online store presence. Read on to see how three of the biggest health and beauty categories are performing online, and how you can leverage their growth to help your business.

Skin care, cosmetics and hair care

This is the largest category for online sales: It saw a boost in web sales of almost 29% last year.1 This growth can be attributed to the availability of specialized products online that can’t be found at drugstores, as well as the convenience of ordering online.

Who is shopping online?

Makeup and skin care sites are especially appealing to younger shoppers.

Millennial (24%) and Gen-Z (14%) shoppers account for the largest group of buyers.1

Where online are they shopping?

These products are being bought from a variety of sites online.

26% web sales growth for brand and manufacturer websites1
19% web sales growth for online-only merchants1
18.4% web sales growth for brick-and-mortar retail chain websites1

Men’s hair care is also a growing market.

Online-only subscription shaving services are booming, and men’s personal-care items are top sellers on popular online marketplaces.1

Vitamins and supplements

The personal nature of vitamins and health supplements makes them strong candidates for online success. In the last year, web sales grew by 20%, powered mostly by online-only retailers.1

Who is shopping online?

The bulk of purchasing power lies with men and women ages 35 and up.

Where online are they shopping?

Most of the category’s growth (43%) came from one online-only merchant that has led web sales for years.1

Brick-and-mortar vitamin and supplement stores are also beginning to use online marketplaces as an additional branch of their store.

They list the same prices and run the same promotions in-store and online, which allows the company to find revenue wherever customers are buying.1

Contacts and eyewear

This category sees frequent shopping. Customers reorder contacts regularly and are often looking for new frames for eyeglasses. This helped lead to its 15% web sales growth last year.1

Who is shopping online?

A majority (63.7%) of online buyers are between the ages of 25 and 54.1

Where online are they shopping?

Consumers helped an eyeglasses retailer that started online-only and offered free at-home try-ons grow its web sales by 30%.1

After rebranding, which included improved free-shipping offers and reordering processes, an online-only contacts retailer also saw web sales grow—by 145%.1

Key Takeaway

The online market for health and beauty products continues to grow. Customers flock to online shops because of quick and efficient shipping, as well as the ease of reordering or subscribing to products online. Take advantage of this growth to develop an optimal experience for your customers online and watch your business boom.

A Brief Look at the State of Healthcare E‑commerce

For healthcare retailers, the new key to revenue growth is e‑commerce.1 Patients are increasingly turning toward the digital convenience, easy shipping and constant access to information that the online healthcare market provides.

As access to online healthcare e‑commerce continues to grow, big players—including the largest online retailer and the two largest drugstore retail chains—and new startups alike are jumping into the game to spur change in the industry.

Below is a high-level view of the industry, consumer expectations and future trends. For more on this expanding market opportunity, dive deeper with our full whitepaper, “Prescription for Change: The State of Healthcare E‑commerce”.

The Industry Today

Sizing up the competition is a vital step to evaluating and understanding a new market. Within healthcare e‑commerce, there is a broad range of products and services in high demand. That means newcomers can profit among the growing ranks of retailers despite a crowded market.

Here’s a snapshot of the healthcare e‑commerce industry:

Includes retailers of equipment, supplies, vitamins and supplements, medical care and prescriptions.

$ 12B was spent online by consumers on healthcare equipment and supplies in 2017.2
25% increase, approximately, in the amount spent on all forms of healthcare from 2007 to 2017.2
55% rate of repeat buyers to the largest drug store chain.1
(The second largest has a 40% rate, while the median of the top 1000 web merchants is only 33%.1)

What Consumers Expect

Businesses should think about how to uniquely address customer wants and needs in a way that sets them apart from others in the space and serves an unmet need in a new way.

Here’s a look at what consumers expect from healthcare e‑commerce experiences:

Service must be fast. Healthcare e‑commerce is only an improvement if it can deliver (literally and figuratively) more quickly than a stop at the drugstore or doctor’s office would.

66% of consumers would prefer a video doctor’s visit if it resulted in a faster prescription refill.1
$ 200M prescription refills completed online are processed each month by a leading drugstore retailer.1

Customers want free or affordable shipping options, package tracking, fast delivery and the ability to manage recurring deliveries.3

Future Growth Trends

For businesses to effectively enter and compete in the healthcare e‑commerce market, it is important that they monitor evolving trends.4

Here are a few emerging trends that may guide the future of healthcare e‑commerce:

Customers have indicated that incorporating new technology1 to deliver quality care, personalizing care5 to make it simpler to find specialized practitioners and making insurance pain-free6 are things they most want tackled as this industry grows.

75% of patients see technology as an important component of managing their health.7
95% of hospitals across the nearly 6,000 in the U.S. have electronic patient records systems in place, but less than half are using them to coordinate with other provider teams.8
59% of Americans think that online doctor ratings are important, especially online where 54% look to find new doctors.5
33% of people would rather deal with a lost credit card than manage their healthcare benefits.6

Key Takeaway

As new opportunities emerge within established markets, businesses should look at what companies are already there, who the customers are and what the future holds. With a solid competitive entry point, businesses entering the healthcare e‑commerce market may find it a potentially fruitful avenue for revenue.

For a more in-depth look at the state of healthcare e‑commerce, read our full white paper, “Prescription for Change: The State of Healthcare E‑commerce,” created in partnership with Internet Health Management.