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BEAUTY US 2017

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US

BEAUTY
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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA

DEATH BY 1,000 CUTS

Beauty US: Share of Branded-Specific Traffic on Sephora & Ulta
Shoppers across consumer categories are opting
Top 3 Brands by Enterprise, Top 1,000 URLs: Brand Pages, Brand PDPs, Brand Search Results (Sephora only)
for new and niche products over traditional brands,
August 2017 ■ Indie ■ LVMH ■ L’Oréal Group ■ The Estée Lauder Companies ■ Ulta ■ Other
and the beauty industry is no exception. In 2016,
independent (“indie”) beauty brand sales grew by
43 percent, compared to an industry average of SEPHORA.COM, n=91 Brands ULTA.COM, n=118 Brands

5 percent.1 5% TARTE
11% ANASTASIA BEVERLY HILLS
Sephora and Ulta have enabled the indie craze with 5% ANASTASIA BEVERLY HILLS
8% TARTE 5% MAKEUP REVOLUTION
site layouts that push consumers to shop by product 2% STILA 8% OTHER INDIE
category rather than by brand. Sephora grants 9% OTHER INDIE 10% NYX
independent brands top visibility across discovery 6% SEPHORA 5% URBAN DECAY
touchpoints like sampling, buying guides, and social 6% KAT VON D 3% MAYBELLINE
5% BENEFIT COSMETICS 7% OTHER L’ORÉAL GROUP
media content. While consumer enthusiasm for any
10% OTHER LVMH 5% MAC 2% TOO FACED
one independent brand can be short lived, the market 6% URBAN DECAY 2% GIORGIO ARMANI BEAUTY 2% CLINIQUE 4% OTHER ESTÉE LAUDER COMPANIES
power of Sephora and Ulta has cultivated a new 2% ULTA
2% KIEHL’S 2% OTHER L’ORÉAL GROUP
class of truly scaled indie contenders. In August 2017, 3% TOO FACED 2% BECCA COSMETICS
1% CLINIQUE 5% OTHER ESTÉE LAUDER COMPANIES
product pages for Tarte and Anastasia Beverly Hills 37% OTHER
received more traffic than most brands owned by 20% OTHER
major beauty enterprises.2
Other retailers are fueling the fire, clamoring to
access one of the few growing consumer categories Source: L2 analysis of SimilarWeb data.

in the US. Over the second half of 2017, more and

more retailers have announced that they will begin to SEPHORA.COM ULTA.COM
sell or increase their focus on indie beauty brands. Beauty US: How Consumers
In November, Kylie Cosmetics announced it would Shop for Products on
distribute through Topshop—the brand’s first retail Sephora & Ulta
partner. This shift makes emerging beauty brands Shop by Brand (Brand Shops, Branded
increasingly accessible across retail touchpoints, 40% 60% 53% 47%
Search Terms) vs. Shop by Category SHOP BY SHOP BY SHOP BY SHOP BY
encouraging fragmentation in an already (Navigation, Unbranded Search BRAND CATEGORY BRAND CATEGORY
splintered category. Terms, Content*)
August 2017, n=Top 1,500 URLs per Retailer
1. Euromonitor, NPD (as cited by “Department Stores Want to Cash in on the Indie
Beauty Boom,” Glossy, October 2017).
2. L2 analysis of Similarweb data, August 2017. Source: L2 analysis of SimilarWeb data.
*Sample represents 40% of total Sephora.com traffic.
Excludes Beauty Offers / Sale, Sephora Play! / VIB Rouge.

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BEAUTY US 2017
INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE
Nowhere is this shift more evident than on Amazon,
now the largest online beauty retailer in the US.3
Independently-owned brands account for 85 percent
of the platform’s best-selling products, and Amazon-
native beauty brands accounted for 3 of its top 5 fastest
growing CPG brands in 2016.4,5 At the prestige price
point, distribution fuels demand from replenishment
buyers. Many small brands that officially distribute
on the platform receive more Amazon searches than
brands with much larger market share, and one-fifth
of Amazon product reviews reference previous use.6,7
Because replenishment buyers create long-term value
and sustainable growth, Amazon is positioned to capture
beauty’s most valuable consumers as sales shift online.8
While Amazon has notoriously failed to strike distribution
3. 1010data (As quoted by Digital Commerce 360, “Amazon Nabs the Top Spot for
Online Cosmetics Sales,” February, 2017); Market share based on fragrance,
nail, face, eye and lip makeup categories.
4. L2 Amazon Performance Rank: Q3 2017, Beauty & Personal Care,
November 2017.
5. “Online CPG Industry Report,” 1010 data, May 2017.
6. L2 analysis of AMZN.ONE data, September 2017.
7. L2 analysis of product ages from prestige skincare and color cosmetics brands
officially distributing on Amazon.com.
8. “How the Beauty Industry is Adapting to Change,” Richard Kestenbaum, Forbes,
June 2017.
• Macy’s announces new store portfolio
Beauty US: Beauty Initiatives ...strategy to fund BlueMercury investments
Launched by Department
Stores & Specialty Retailers
January–November 2017
JAN 2017
Source: L2 Digital IQ Index: Beauty US,
November 2017. • Saks “Glow Studio” K-beauty pop-up
November 15, 2017
E-TAILERS DIGITAL MARKETING SOCIAL MEDIA
deals with the big names in prestige beauty, the
focus may have stanched the bleeding; the Estée
high margins of specialty beauty retailers (rumored
Lauder Companies recently disclosed that Clinique is
to be up to 60 percent of each sale at Sephora)
the enterprise’s second largest online business, citing an
are pushing indie brands to distribute on Amazon
impressive 23 percent growth rate.12 Similarly, winning
as well (15 percent of sales).9,10 As of September
brands from other major enterprises are doubling down on
2017, one quarter of brands carried by Sephora also
core digital competencies across the purchase funnel. The
distributed on Amazon.
L’Oréal Group, for example, has committed to winning in
What’s A Brand to Do? search, while Shiseido has focused on relaunching best-in-
class brand sites.
As the rug is pulled out from under the feet of
established beauty enterprises, turnaround Digital IQ = Shareholder Value
strategies have focused on new acquisitions and
This study quantifies the digital competence of 108
investment in digital channels. Clinique, one of the
beauty brands operating in the US. Our aim is to provide a
old-guard beauty brands most publicly covered
robust tool to diagnose digital strengths and weaknesses,
for losing market share, has one of the top 10 US
helping managers achieve greater return on incremental
e-commerce sites among beauty brands and ranks
investment. Like the medium we are assessing, our
among the top 10 brands in this year’s Index.11
approach is dynamic. We encourage you to reach out with
While the brand continues to struggle, its digital
comments that improve our methodology and key findings.
9. “As Sephora Adds Products, Rivalry Heats Up at Its Stores,” The Wall Street
Journal, January 2017.
10. “Amazon Selling Fees—How Much Does It Cost to Sell on Amazon?” Regards,
SellerEngine, January 2016
11. 1010data (As quoted by Digital Commerce 360, “Amazon Nabs the Top
L2
Spot for Online Cosmetics Sales”), February, 2017. 12. The Estée Lauder Companies’ (ELC) CEO Fabrizio Freda on Q4 2017 Results,
transcribed by seekingalpha.com., August, 2017.
• JCPenney announces 70+ new in-store • Topshop announces it will begin
Mabel McLean | Group Director, Beauty
...Sephora locations ...distributing Kylie Cosmetics
• Bloomingdale’s launches GlowHaus Rebecca Edelman | Senior Research Associate
Aime Arroyo | Research Associate
MAR 2017 OCT 2017 Katie Groody | Research Associate
NOV 2017 Karen Lee | Research Associate
AUG 2017
Sheri Reichelson | Research Associate
• Forever 21 announces Riley Rose Stores
• Neiman Marcus partners with Beauty Expo Elena Akulova | Senior Designer
• Zalando (EU) launches beauty assortment
• Madewell launches beauty shop
L2 research is based on data-driven analysis.
• Walmart pledges natural beauty initiative
• Sephora-style “makeover” for Target beauty Our findings, rankings, and recommendations
• Old Navy to start selling e.l.f.Cosmetics are objective, unbiased, and independent
• Sephora begins distributing its first mass brand, ColourPop of membership.
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METHODOLOGY

SITE & E-COMMERCE DIGITAL MARKETING SOCIAL MEDIA MOBILE

COLOR COSMETICS & NAILS 40% COLOR COSMETICS & NAILS 20% COLOR COSMETICS & NAILS 20% COLOR COSMETICS & NAILS 20%
FRAGRANCE & SKINCARE 40% FRAGRANCE & SKINCARE 25% FRAGRANCE & SKINCARE FRAGRANCE & SKINCARE 20%
15%
Technology: Search: Facebook: Smartphone Experience:
Site Load Time & Uptime Traffic, Web Authority, SEO & SEM on Google Reach, Total Post Engagement (12 months), Mobile Specific Functionality, Compatibility
(Top Branded and Unbranded Category Keywords) Average Interactions per Post & Functionality, Cart Consistency Across
Navigation & Content: Devices, Store Locator & Geolocation
Filtering & Sorting Options, Gallery Page Content Advertising: YouTube:
Integration, Product Search, Presence and Display, Video Pre-Roll, Retargeting, Quality & Reach, Search Visibility, Channel Experience, Mobile Search:
Sophistication of Guided Selling Efficiency of Ad Buys Video Views Above-the-Fold Visibility via Organic
or Paid Results, Brand Visibility in PLAs
Customer Service, Store Locator & Account: Email Marketing: Twitter:
FAQs, Contact Information, Live Chat Availability, Frequency, Segmentation/Customization, Reach, Annual Growth, Frequency, Relative Mobile Web Advertising:
Store Locator Estimated List Size, Open Rate, Smartphone & Absolute Engagement Mobile Web Advertising, Quality & Efficiency
Optimization of Ad Buys
Product Pages: Instagram:
Product Merchandising, User Reviews & Review Earned Media: Followers, Growth, Relative & Absolute
Sophistication, Content Integration Category-Specific Vlogger Mentions on YouTube, Engagement, Instagram Stories
Mentions & Tags by Instagram Influencers,
E-Commerce & Account: Brand Mentions on Sephora Beauty Talk, Snapchat:
Ease of Checkout/Handoff, Samples, Loyalty Editorial Mentions Presence, Post Frequency, Ad Visibility
Programs, Account Customization in Discover Ads (September)

E-Tailer Visibility (where applicable): Pinterest:

Brand Visibility, Share of Shelf, Average Top Rank, Reach, Frequency, Relative & Absolute Engagement
and Product Merchandizing on:
• Amazon • Sephora
• Dermstore • Target
• Macy’s • Ulta
• Nordstrom • Walmart

CLASSIFICATION

GENIUS 140+ GIFTED 110–139 AVERAGE 90–109 CHALLENGED 70–89 FEEBLE < 70
Digital competence is a point Brands are experimenting and Digital presence is functional yet Limited or inconsistent adoption Investment does not 
of competitive differentiation for innovating across site, mobile, and predictable. Efforts are often  of mobile and social media platforms. match opportunity.
these brands. Creatively engineered social platforms. Digital presence siloed across platforms. Sites lack inspiration and utility.
m essaging reaches consumers on  is consistent with brand image and
a variety of devices and in many  larger marketing efforts.
online environments.

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BEAUTY US 2017

TOP PERFORMERS

1 147 2 142 3 140

RANK DIQ RANK DIQ RANK DIQ INDEX AVERAGE
LVMH Kose Corp. L’Oréal Group

1
3 2

3
1

1
3

2
2 3
1

GENIUS GENIUS GENIUS

SITE & E-COMMERCE

4 137 5 135 1 Site & Site Tech
RANK DIQ RANK DIQ 2 Amazon
3 Other E-Tailers
L’Oréal Group The Estée Lauder Companies Inc.

DIGITAL MARKETING
1 Traffic & Web Authority
2 SEO/SEM
3 Web Advertising

SOCIAL MEDIA
1 Facebook
2 YouTube
3 Instagram

MOBILE
1 Mobile Site
2 Mobile Advertising
3 Mobile Search
GIFTED GIFTED

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA TAKEAWAYS

RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ

GIFTED

6 133 13 128 19 122

LVMH L’Oréal Group Kendo Brands, Inc.

6 133 13 128 19 122

The Estée Lauder
Companies Inc. Johnson & Johnson, Inc. Shiseido Co., Ltd.

6 133 13 128 22 121

L’Oréal Group Procter & Gamble Seed Beauty

6 133 16 127 22 121

The Estée Lauder
L’Oréal Group Companies Inc. Coty Inc.

10 132 17 126 22 121

J.A. Cosmetics Corp. Chanel S.A. L’Oréal Group

10 132 18 124 22 121

The Estée Lauder The Estée Lauder
Companies Inc. Companies Inc. Shiseido Co., Ltd.

12 130 19 122 26 120

Charlotte Tilbury Beauty Ltd. Shiseido Co., Ltd. Revlon

*Brand acquired by Coty Inc. after data collection period.

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA TAKEAWAYS

RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ

GIFTED

27 119 33 114 39 110

Anastasia Beverly Hills, Inc. L’Oréal Group L’Oréal Group

AVERAGE
27 119 33 114 42 109
The Estée Lauder
Companies Inc. L’Oréal Group Unilever

29 118 36 113 42 109

LVMH Avon Products, Inc. Coty Inc.

30 117 37 112 44 108

LVMH Glossier L’Oréal Group

31 116 37 112 44 108

Coty Inc. Shiseido Co., Ltd. LVMH

32 115 39 110 44 108

L’Oréal Group The Clorox Co. Kendo Brands, Inc.

33 114 39 110 44 108

Burberry Group Plc* L’Oréal Group Mary Kay

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA TAKEAWAYS

RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ

48 107 54 102 61 99
The Estée Lauder
Unilever L’Oréal Group Companies Inc.

49 105 54 102 61 99
Coty Inc. L’Occitane Group Patriarch Partners, Llc

49 105 54 102 64 97
The Estée Lauder
Coty Inc. L’Oréal Group Companies Inc.

51 104 54 102 65 96
The Estée Lauder
Companies Inc. Coty Inc. Johnson & Johnson, Inc.

52 103 59 101 66 95
Unilever Unilever The Estée Lauder Companies

52 103 59 101 66 95
Procter & Gamble L’Oréal Group Drunk Elephant Llc.

54 102 61 99 68 94
Clarins S.A. Kendo Brands, Inc. Pierre Fabre

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA TAKEAWAYS

RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ

68 94 74 89 81 85
Revlon Guthy-Renker Clarins S.A.

70 93 74 89 81 85
Puig Sl L’Oréal Group Walgreens Boots Alliance, Inc.

71 92 78 88 85 83
The Estée Lauder
Companies Inc. Christian Louboutin Unilever

71 92 79 87 86 81
The Estée Lauder
Companies Inc. Tata’s Natural Alchemy Sisley Cosmetics Usa

73 91 80 86 87 80
Markwins International Coty Inc. Galderma Laboratories
CHALLENGED

74 89 81 85 87 80
First Aid Beauty Ltd Shiseido Co., Ltd. Coty Inc.

74 89 81 85 87 80
Hourglass Cosmetics* Milani Beiersdorf AG

*Brand acquired by Unilever after data collection period.

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA TAKEAWAYS

RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ RANK BRAND DIGITAL IQ

90 78 97 71 104 53
L’Oréal Group Revlon Coty Inc.

91 77 98 70 104 53
Strivectin Operating
Natura Company, Inc. Puig Sl

FEEBLE
91 77 99 68 106 50
Shiseido., Co Ltd. Unilever Puig Sl

91 77 100 66 107 41
Beiersdorf AG L’Oréal Group Coty Inc.

94 76 101 64 108 37
The Estée Lauder
Rodan & Fields Llc Companies Inc. Shiseido Co., Ltd.

95 74 102 63
Unilever LVMH

96 72 103 56
Coty Inc. Puig Sl

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA

Brands are Investing in Visual Content

Beauty US: Adoption of Guided Selling Features on Brand Sites
Beauty brands have continued to invest in guided selling content
2016 vs. 2017, n=95 Brands Present in Both Studies ■ 2016 ■ 2017
to facilitate online product research and boost conversion rates—
most notably, on highly visual content assets. Adoption of on-
model imagery, before-and-after photos, and mouseover images VISUAL ASSETS TEXT BASED CONTENT

has increased year over year. Meanwhile, fewer brands support

text descriptions and text-based tutorials.
Skincare and complexion brands are using visual assets
to demonstrate product efficacy. For example, Proactiv now
overlays slider bars on before-and-after user images to highlight
improvements in skin health. Similarly, Too Faced includes 65%
split-face before-and-after images on its foundation product
pages, visualizing the coverage and end results on real women 43%
39% 38% 37% 37%
with skin concerns like acne or dark spots. 36%
31%
30%
Investment in on-model imagery has exploded in 2017, allowing 26%
22%
beauty brands to showcase the shade range of makeup products 14% 13%
on women with different skin tones. One-third of Beauty Index 5%
brands now support on-model imagery. Most brands have
focused these extensive investments behind their priority products. IMAGES IN UGC ON-MODEL MOUSEOVER BEFORE-AND- HOW-TO TEXT DESCRIPTIONS
DIAGNOSTIC* IMAGERY IMAGERY AFTER IMAGERY TEXTS IN DIAGNOSTIC*
Hourglass, for example, only includes on-model imagery for newer
*Only measured among brands with diagnostics (2017, n=45; 2016, n=36).
products like its Vanish foundation stick, and has not invested in Source: L2 Digital IQ Index: Beauty US, November 2017.
the same merchandising for older products. A handful of brands
have invested in on-model imagery for their entire product lines,
producing unique photos for each shade. On bareMinerals’ site,
for example, clicking on a shade swatch changes not only the hero
image but also the associated texture swatch and model image.
While on-model imagery typically sits on product pages,
Charlotte Tilbury elevates its visibility by including this collateral
directly on product gallery pages. This is accomplished by listing
foundation or lipstick shades as separate products rather than
bundling all into a single listing. On the gallery page, users can
hover their mouse over the different foundation shades to display
the product on models with different skin tones without having to
click through to the product page. bareMinerals features an on-model image for each To support text-based testimonials, Proactiv uses
shade of foundation. before-and-after user photos to highlight product results.

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA

Specialty Beauty Retailers: Ulta & Sephora

Beauty US: Brands With the Highest Product Discoverability on Specialty
On both Sephora and Ulta, more consumers shop via the
Beauty Retailer Sites
primary navigation menus than with search.13 Private label
Based on Average Top Ranked Product, First-Page Visibility, and Real Estate
collections are the most visible products on color cosmetics
August 2017 ■ Coty ■ The Estée Lauder Companies ■ Indie ■ L’Oréal Group ■ LVMH ■ P&G
navigation pages. Outside of the retailers’ private labels, there
is significant overlap between the top 10 brands on either ■ Shiseido Co. ■ Unilever ■ Other
platform, including Tarte, Urban Decay, Anastasia Beverly Hills,
Too Faced, and Benefit. These are popular brands with strong
top-of-funnel demand, and they are also frequently promoted
in retailer merchandising. Unsurprisingly, the other top color
brands on Sephora are owed by LVMH. Winners on Ulta are COLOR COSMETICS SKINCARE COLOR COSMETICS SKINCARE
primarily brands that do not distribute on Sephora including n=505 Navigation Pages n=936 Navigation Pages n=365 Navigation Pages n=312 Navigation Pages

NYX, MAC, and LORAC.

1 SEPHORA COLLECTION 1 CLINIQUE 1 ULTA 1 CLINIQUE
In the skincare category, Clinique products are the most
visible on both Sephora and Ulta. Clinique is more exposed to
2 TARTE 2 PETER THOMAS ROTH 2 URBAN DECAY 2 DERMALOGICA
the structural decline of department store channels in the US
than any other Estée Lauder brand.14 To compensate, the brand
3 MAKE UP FOR EVER 3 OLE HENRIKSEN 3 TARTE 3 NEUTROGENA
has increased investments in digital channels­—especially its
specialty beauty partners. While the brand is still losing market 4 NARS 4 SHISEIDO 4 NYX 4 MARIO BADESCU
share overall, its aggressive investments have allowed it to
find new pockets of growth. On the Estée Lauder Companies’ 5 ANASTASIA BEVERLY HILLS 5 DR. DENNIS GROSS 5 MAC 5 PHILOSOPHY
Q4 2017 earnings call, the company stated that Clinique “…is
growing in specialty [beauty retail] in the US. … Online Clinique 6 URBAN DECAY 6 FRESH 6 IT COSMETICS 6 JUICE BEAUTY
is our second biggest business, and it is growing over 23
percent globally. So, it’s very strong for us.”15 7 BENEFIT COSMETICS 7 SEPHORA COLLECTION 7 TOO FACED 7 MURAD

13. L2 analysis of Similarweb data, August 2017. 8 TOO FACED 8 KATE SOMERVILLE 8 BENEFIT COSMETICS 8 SKYN ICELAND
14. “The Estée Lauder Companies’ (ELC) CEO Fabrizio Freda on Q4 2017 Results–Earnings Call
Transcript,” Seeking Alpha, August 18, 2017.
15. Ibid. 9 KAT VON D 9 CAUDALIE 9 ANASTASIA BEVERLY HILLS 9 NO7

10 CLINIQUE 10 ALGENIST 10 LORAC 10 DERMA E

Source: L2 Digital IQ Index: Beauty US, November 2017.

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA

Search: Paid Placements Are Commanding

More Real Estate Beauty US: Top Paid Search Keywords Driving Traffic to Brand Sites
September 2016 vs. September 2017, n=41 Color Cosmetics Brand Sites (Top 100 Paid Keywords per Site)
The majority of Index brands fail to optimize sufficiently for
organic search on Google. To maintain visibility, brands are
increasing SEM spend against both branded and unbranded YoY CHANGE
terms. Year over year, the average share of paid search
results among Index brands has increased by 5 percent for BRANDED 9%
unbranded terms and 10 percent for branded terms. This shift
COMPETITIVE
is driven primarily by an increase in Product Listing Ads (PLAs). BRANDED
4%
Brands are increasingly bidding on unbranded terms to 63% BRANDED
attract incremental consumers at the top of the conversion 72% BRANDED UNBRANDED 4%
funnel. Product-related terms (e.g. “best mascara”) are the PRODUCT
most common and account for 25 percent of paid keywords
driving traffic to color cosmetics brand sites, up from 21
percent last year.16 Tutorial-focused keywords (e.g. “how to do 4%
a smokey eye”) are also up slightly, while ingredient-focused 0.6%
COMPETITIVE
25% BRANDED
terms and retailer-specific terms both account for less than 1 21%
COMPETITIVE
BRANDED* UNBRANDED
percent of keywords. UNBRANDED PRODUCT
PRODUCT
The majority of bidding activity is still focused on branded
3% TUTORIAL 4% TUTORIAL
keywords, which typically have lower costs per click than 3.4% OTHER 4% OTHER
unbranded terms.17 Brands continue to bid primarily on their
2016 2017
own keywords, but the past year has also seen a surge n=3,791 Keywords n=3,850 Keywords
in competitive bidding—buying ads against competitors’
branded terms. Last year, this strategy was almost entirely
*Competitive branded terms are brand terms against which a competitor brand has bid.
isolated within the mass price point and was responsible for Source: L2 analysis of SEMRush data.
a negligible portion of site traffic across the Index. This year,
more prestige brands are engaging in competitive bidding.
For example, in September 2017, Tom Ford and Lancôme
were both observed bidding against the lower-priced brand
ColourPop, and Too Faced was observed actively bidding
against Maybelline and NYX.

16. L2 analysis of SEMRush data.

17. Google Adwords.

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INTRODUCTION RANKING KEY FINDINGS SITE & MOBILE E-TAILERS DIGITAL MARKETING SOCIAL MEDIA

Instagram
Beauty US: Share of Interactions on Instagram
Instagram is the most important social platform for color
Q3 2017, n=125 Brands
cosmetics brands, which account for over 95 percent
■ Indie ■ ELC ■ L’Oréal Group ■ LVMH ■ Coty ■ Kosé ■ P&G ■ Fashion ■ Other
of engagement on all beauty posts.18 Original platform
juggernauts Anastasia Beverly Hills and Kylie Cosmetics may
have written the Instagram playbook, but others are catching
up. Total interactions for both brands decreased year over
year, while fast beauty brands ColourPop, NYX, and Wet n
Wild increased their total interactions by an average of 60
percent. These brands have increased post frequency and 17% KYLIE COSMETICS 7% MAC 4% NYX

are leveraging high-quality user-generated content. 15% ANASTASIA BEVERLY HILLS 5% TOO FACED 4% MAYBELLINE 6% 6% 5% 4% 5%
COSMETICS LVMH COTY KOSÉ P&G OTHER
Skincare brands are also ramping up investments on the 3% COLOURPOP 3% URBAN DECAY
platform. Total engagement on skincare brand content more 2% OTHER INDIE 5% OTHER ESTÉE 5% OTHER
LAUDER L’ORÉAL
than doubled in 2017, compared to color cosmetics’ 64 COMPANIES GROUP
percent growth. This growth is due in part to a “more is better”
4%
content strategy, as skincare brands increased their posting FASHION
by over 50 percent year over year. Kiehl’s has more than
tripled its posts, resulting in a nearly 20-fold increase in total
interactions. Color-focused brands like Too Faced, Tarte, and Source: L2 Digital IQ Index: Beauty US, November 2017.

Benefit are leveraging their large communities and Instagram

know-how to succeed in skin-focused product launches.
Skin-related posts from these three brands easily outperform
posts from top skincare performers like Kiehl’s and Clinique.

18. L2 analysis of Unmetric data.

Color-focused brands that also

play in skincare leverage their
large followings to markedly
outperform even the strongest
skincare brands.
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TABLE OF CONTENTS

5 METHODOLOGY 2 9 Sephora: Sampling 47 SOCIAL MEDIA

3 0 Department Stores 47 Instagram
6 DIGITAL IQ RANKING 3 1 Mass Retailers: Walmart & Target 48 Instagram Stories Overtake Snapchat
6 Company of Genius 3 2 Amazon: Color Cosmetics 49 FLASH OF GENIUS: Commerce-Enabled
9 Gifted 3 3 Amazon: Skincare Instagram Stories Anastasia Beverly Hills

1 2 Average 50 YouTube

1 4 Challenged 34 DIGITAL MARKETING 51 Facebook

1 6 Feeble 3 4 Search: Paid Placements Are Commanding 52 Earned Media

More Real Estate
53 Influencers
3 5 Search: Color Cosmetics
18 KEY FINDINGS 54 Influencers Top Content Types
3 6 Search: Complexion
1 8 Enterprise Performance 55 Mega vs. Micro Influencer Partnerships
3 7 Search: Skincare
1 9 Biggest Winners & Losers
3 8 Search: Fragrance
56 TAKEAWAYS
20 SITE & MOBILE 3 9 “No-Frills” Product Names Boost Visibility

2 0 Brands are Investing in Visual Content
21 Guided Selling Tools are Getting Shorter, More Visual
2 2 Site Relaunches Prioritize the Mobile Experience
23 Making it Easier to Browse & Buy on Mobile
24 Using Samples to Drive Trial
25 FLASH OF GENIUS: Iteration to Improve
Site Content and Diagnostics: Charlotte Tilbury
4 0 Sephora and Ulta: Second-Order Search
57 ABOUT L2
4 1 Display Advertising Brands Experiment
With Short-Form Video
4 2 SPOTLIGHT: Dior Scales Back on TV Spend, Focuses on Digital
4 3 Display Advertising Mobile Impressions on the Rise
4 4 Email
4 5 FLASH OF GENIUS: Ingredient-Focused Email Content:
SkinCeuticals

4 6 FLASH OF GENIUS: “Slow Beauty” Picks Up the Pace

26 E-TAILERS Smashbox, Benefit, MAC Cosmetics
2 6 Specialty Beauty Retailers: Ulta & Sephora

2 8 Sephora: Buying Guides

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