Is the Lipstick Effect in Full Force Down Under?

Over the past 12 months, Australian consumers have endured 12 interest rate rises. Due to the lag in how these increases filter through to homeowners, it’s only in the past two or three months we’ve started to really feel their impact – both for homeowners and for renters having their rents increased to cover higher mortgage repayments.  

That in itself is enough to put a dampener on consumer spending, but with inflation at record-high levels (which is the catalyst for the rate hikes), we wanted to explore what the impact has been on Australian ecommerce traffic.

We’ve explored the impact on Australia’s Fashion and Apparel and Consumer Electronics sectors. Today, we’ll unmask the Beauty and Cosmetics category.

Key takeaways

• Beauty and Cosmetics bucks the downward trend, increasing YoY traffic by 2.85% in the first six months of this year.
• Category leader, Mecca, posts strong growth to further cement its position.
• J and K Beauty is still trending with Australian consumers.
• Referral Traffic plays a large part in acquisition strategies across the sector.

Mecca making waves, riding the Lipstick Effect

There’s something unique about the Beauty and Cosmetics industry, where the industry leader managed to grow its traffic YoY. That may be a factor of the “lipstick effect,” or the idea that consumers will keep spending on small indulgences even when money is tight.

Not only did Mecca increase its traffic, but it did so by an impressive 18%. In the previous two industries (Fashion and Consumer Electronics), the category leaders both experienced traffic declines.

Mecca leads the category, experiencing an impressive 18% growth in website traffic

Category Leaders are defined as the top websites in the respective category based on their Traffic Share.

Category Challengers refer to websites with over 500,000 Average Monthly Visits, experiencing the highest rate of growth within the category.

Beauty Amora, The Ordinary, and W Cosmetics have emerged as the fastest-growing websites

So what is it about Cosmetics that sets it apart?

To find out, download the full report.

Read more: Measuring the “Lipstick Effect” on Online Retail

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Methodology

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Photo by Andriyko Podilnyk on Unsplash