The changing face of beauty

How the beauty industry is evolving

The beauty industry has seen a wave of changes and transformations in recent years, with emerging Gen-Z brands, technological advancements, and new waves of younger more value-driven customers shifting to a holistic buying behaviour. In this new commercial reality, we see major opportunities arising for both Zalando Beauty as well as our partners in the beauty space. 

One of the most significant shifts we’ve seen is the evolving behavior of beauty consumers in how they approach shopping. Today’s shoppers prefer a blended, cross-category experience, viewing beauty not just as a standalone sector, but as an integral part of their broader lifestyle and fashion choices. 64% of Europeans, for example, consider sleep to be a key aspect of health. Products such as overnight treatments and sleeping aids become integral elements of consumers’ overall understanding of health and wellbeing, transcending the beauty category. With this shifting consumer behaviour, category boundaries are expanding and are not seen as separate in consumers’ minds in the way they might be for brands. 

Highlighting customer research at our exclusive partner event in Paris

To better understand what’s behind this evolving consumer behavior when it comes to buying beauty, we partnered with Bain & Company to conduct an in-depth study into the behaviours, desires, and shopping patterns of today’s beauty consumers. In October this year, Zalando’s 

Vice President Emerging Propositions, Joanna Rogers, and Bain’s Director of the Global Consumer Lab, Leah Johns, presented the findings and insights at an exclusive event in Paris, where we brought together selected executives, entrepreneurs, and key thought leaders to uncover the changing face of beauty in the digital era.

The research was conducted as a large-scale consumer survey and in-depth qualitative interviews with Zalando and non-Zalando shoppers. Here’s a snapshot of what we uncovered:

Our findings with Bain & Company:

Holistic buying behaviour transcends category boundaries

Today’s consumers do not think in classical categories and are expanding the boundaries of fashion, beauty and health. In fact, 58% of beauty enthusiasts surveyed apply a ‘holistic’ approach to beauty. This means, customers do not only consider makeup or skincare as essential to beauty, but view lifestyle and health products as equally important and connected. Likewise, beauty and fashion are tightly intertwined both in customers' minds as well as their behaviour and how they shop. Research shows that over 20% of consumers shopping with online retailers make their first beauty purchase while shopping for fashion items and noticing beauty products unintentionally during this journey. While 77% of online beauty shoppers say they care about their holistic look and which products they choose, many retail concepts for beauty and fashion are still living in separate worlds, providing a (physical or digital) separation that doesn’t reflect consumers’ desire to shop holistically across fashion, beauty and lifestyle. For this new generation of beauty enthusiasts, their holistic shopping behaviour opens up space for inspiration across categories, which comes with a heightened desire for multi-category retailers due to the wide array of (product) choices.

Furthermore, in this new beauty landscape, trust matters. Be it with the choice of retailer connecting them to brands they love; or with the brand itself – 81% of consumers said they need to trust a retailer to buy from it. To build trust online, consumers look for detailed product information, informative customer reviews and opportunities to virtually or physically try products before buying. Additionally the research confirmed that they increasingly value sustainability, diverse representation, and technology as well as product availability, pricing and user experience.

The beauty enthusiast – our target customer

We know that today’s beauty consumers shop cross-category, that they care about trust and shared values, and they are actively searching for inspiration and are keen to discover brands and products they love. Let’s look at the consumers we want to connect Beauty brands with on Zalando. The consumer group we’re targeting with Zalando Beauty, beauty enthusiasts, represent a large and demographically diverse, but psychographically homogenous group that exists across Europe. We have found through research that Beauty enthusiasts shop frequently (75% of them are shopping nearly every month or more) and across all categories, and over-index on portfolios like Streetwear, Premium, Designer and Beauty. They are also less motivated by price compared to other groups, they consider product quality to be as important as price. They are also the group most influenced by inspiration and sustainability.

Among our 50 million Zalando customers, our Beauty customers are predominantly female, but a significant male segment also engages with this category. We are keen to expand on our position as an inclusive destination across genders in what has been historically a very female category - and already see great successes here, e.g. with unisex fragrances. The majority of our beauty customers are young, fashion-forward consumers, highlighting the natural extension of beauty into the Zalando shopping journey.

Building on the findings from the joint Bain & Company research and our internal consumer insights, we see two major opportunities for brands looking to connect to customers shopping Beauty online.

As boundaries between fashion, beauty, and health blur, consumers are gravitating towards a more holistic lifestyle approach to shopping, seamlessly blending categories to reflect a fluid, personalised lifestyle. Recognising this trend, we have honed in on two key growth areas: expanding a multi-category lifestyle experience and offering new inspiration and entertainment for our increasingly digital, younger audience.

Joanna Rogers, Vice President of Emerging Propositions

Opportunity #1: Expanding quality and holistic lifestyle offerings

Firstly, today’s consumers no longer view fashion, beauty, and wellness as separate; they seek a cohesive shopping experience that reflects their lifestyle. A common pattern within our customer-base, they want to find everything in one place, and they want the experience to be seamless. At Zalando, we leverage content creators to present customers with products they love across categories in an unfractured and blended way via live streaming, Get the Look, Stories on Zalando, our newly launched Boards and other interactive and video-first channels. By providing customers with an unparalleled shopping experience on their terms, we set the perfect stage for your beauty brands, making you a part of these exciting discovery moments for customers. You can read more about how we are creating new experiences to move beyond transactional relationships with our customers here.

Investing in such cross-category experiences is not just in line with what customers want, it also pays off for us at Zalando: our research shows that customers who purchase across four or more propositions spend over eight times more on average and show a 1.5 times higher retention rate than those who only shop in single categories. This multi-category engagement is a key driver for us, and presents you, our partners, with a huge opportunity to leverage the reach we give you access to on Zalando across categories. To maximise our impact in beauty, Zalando is investing in initiatives that further drive cross-category shopping, such as relaunching our loyalty programme, Zalando Plus which looks to reward customers for their (cross-category) engagement.

Looking forward, the retail landscape is set to be dominated by Generation Z and millennials, who together will make up nearly half of the global population. Gen Z, in particular, shops with a distinct mindset, relying heavily on digital inspiration. In fact 96% of Zalando customers seek inspiration while shopping.

Joanna Rogers, Vice President of Emerging Propositions

Opportunity #2: Inspiring and entertaining a new generation of shoppers

To meet these evolving expectations, Zalando is creating a platform that merges e-commerce with entertainment in an engaging, authentic way. Our Talent Profiles and Stories (such as those by Isamaya Ffrench) are already live and generating strong engagement. Additionally, our beauty-focused livestream shows have been especially popular. Our customers are eager for more product information and inspiration, particularly in beauty, where 80% express a need for additional guidance and advice to find the right products–and our livestreams are one way in which we aim to deliver this. Our investments into our elevated Product Detail Pages is another, wherein product imagery is supplemented with video content showing product highlights and how products can be applied. 

Innovating with Generative AI

New technologies such as GenAI play a crucial role in driving our strategy forward. We have been pioneering AI-driven experiences that tailor our platform to customer needs, elevating engagement, and driving satisfaction through intelligent, personalised recommendations. 

Especially for Beauty, we have been using AI to create elevated Product Detail Pages. Here images of products are elevated with AI generated background content to extend the visual storytelling of the campaign around the product. Check out the examples below:

The following is a hybrid image from our Halloween Beauty shoot, where the model is a real person, and the background and iridescent elements are added using AI:

Thanks to this new technology, we no longer need to build a set to shoot elevated content for each product as we did for a long time. Instead, AI allows us to generate background images at scale at a much lower cost - and also show products in a way that without AI would not even be possible .This kind of content creates engagement beyond purchase transactions, and we also see this reflected in our numbers. Elevated content has a +10% higher engagement than standard product shots.

We are also experimenting with AI-generated content to offer customers even more localised content and to cover microtrends faster. Microtrends are trends that emerge at short notice and are often local or market-specific. For these kinds of trends, conventional content production methods are too slow. These trends usually disappear again after 2-3 weeks which is the time that would be needed to set up a regular campaign shoot. Recent examples we’ve seen in Beauty have been blue eye makeup, peptide lips and nude lips with between 200-800% increase in interest in these search terms on our platform.

To show an example of this in practice: the “Futuristic pink glow” image below is fully AI generated, including the model, and is taken from a trend we saw on social media in the Spring, where pink blushes were very relevant. This teaser performed +146% over benchmark and took approx 80% less time to produce, with a 90% cost saving.

Trendspotter empowers our customers to stay updated, as customers look to Zalando for inspiration.  Trends inspire people and are a concept so core to fashion and beauty. To many people, fashion and beauty are a way of self-expression, a way to state who they are, what they stand for, and what’s important to them. Trendspotter gives customers the opportunity to discover what’s trending in various European cities across Fashion, Lifestyle and Beauty, empowering them to stay ahead of the curve and be inspired by what’s desirable in those places whether they live there or not - and seamlessly shop what catches their eye. 

The path forward

By expanding our Beauty category and consistently building on the latest technological advances to develop a content-driven platform for the new generation, we’re building on our strengths to deliver a future where commerce, inspiration, and entertainment converge—creating a destination where customers can not only shop but also express, discover, and connect in meaningful new ways. We’re excited to be shaping the changing face of beauty together with you.