Consumer (R)evolution: 25 Years After Y2K

SSI examines the consumer landscape, which is on the verge of one of the most transformative eras in decades. With emerging technologies like artificial intelligence and evolving consumer behaviors, the retail industry must not only keep up but stay one step ahead. These trends are reshaping how and where consumers shop, as well as what they choose to purchase during their varied experiences. In addition to traditional and online channels, we also explore the role of beauty specialty stores in the current ecosystem of consumer shopping behaviors

85% of AA women state they shop at at least one of Sally Beauty, Ulta, or Sephora – though many overlap and shop at more than one of these stores depending on their needs – three quarters of those shopping in Beauty specialty stores state they purchased haircare maintenance products or haircare styling products. Other product categories vary by age and income, an example of this is cosmetics where high-income consumers are most likely to purchase these via beauty specialty stores.

The availability of high quality products is a core driver of purchasing from Beauty Specialty Stores – this is almost universal across age groups and income brackets barring the 60+ age group who are more focused on a wide product range. Among those who do not shop at beauty specialty stores, the main barrier is pricing

When it comes to AI integrations in hair and beauty shopping, just under half have used shopping apps such as virtual try-ons. Younger consumers are significantly more likely to use apps when undertaking their hair and beauty shopping – they are also more likely to use different types of apps including virtual try ons and AI driven product recommendations. 

While consumers expect beauty specialty stores to remain relevant, Over 4-in-5 respondents find the in-store experience to be “extremely” or “somewhat” important, with this being highest among younger consumer groups -  furthermore a third of younger consumers believe beauty specialty stores must evolve to stay relevant, suggesting a need for Beauty Specialty Stores to continue their efforts in integrating/developing superior customer experiences.