Major beauty retailers saw their shares fall after the announcement.
Is there an industry that Amazon can’t disrupt? So far, the answer to that question seems to be a resounding no. And this week, the beauty industry is the latest to potentially be upended by Amazon.
On Monday, major beauty retailers like Ulta and Sally Beauty saw their stock fall after Amazon launched its own e-commerce beauty store. The Amazon Professional Beauty Store gives licensed stylists, barbers, and estheticians access to products that are usually only available in salons and spas.
Following the news, shares of Ulta dropped nearly 4% and shares of Sally Beauty dropped more than 9%.
The details on Amazon’s beauty store
Amazon launched over 20 years ago as an online store that only sold books. Now the company has more than 40 subsidiaries and it seems no industry is safe from an Amazon takeover.
Amazon is very good at identifying a need in the market and finding a way to meet that need better than anyone else. A common problem for stylists is that they need to purchase a variety of different products for their customers and often have to travel to multiple stores to find everything they need.
The Amazon Professional Beauty Store will follow the same format the e-commerce giant uses for Amazon.com. Now stylists can find all the products they need in a single location. Everything is available at a low price point and customers that have an Amazon Business account can receive eligible orders within one or two days.
Amazon plans to offer products like Wella Color Charm and OPI Professional, as well as a number of other products typically found in salons. Customers will need to have a state-issued license to purchase products from the professional use section.
Does trouble lie ahead for beauty retailers?
This announcement did not come as welcome news to traditional beauty retailers, many of whom were already struggling. Sally Beauty’s stock was already down more than 20% after a disappointing earnings report.
Ulta may fare slightly better than Sally Beauty. Its stock was up 40% thanks to the introduction of several new cosmetics lines. But if Amazon’s past success is any indication, it seems likely that beauty retailers will take somewhat of a hit in the coming year.
