E-commerce is changing the way consumers shop for CPG and personal care products

From subscription services that deliver products on a recurring basis to key-fob devices that let someone order a product with the click of a button, e-commerce is changing the way people purchase everyday products like toothpaste and makeup.

Americans are expected to spend $350 billion on health and personal care products in 2020, and 11% of those sales are expected to come from e-commerce, according to BI Intelligence estimates.

In a recent in-depth report, BI Intelligence looks at how retailers like Amazon and Sephora are using digital to sell and distribute health and personal care products in ways that are more convenient for consumers. We analyze all the factors that drive consumers to shop online for everyday products, and we look at which CPG brands and retailers are the most digitally savvy.

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Here are some of the key findings explored in the report: 

• Online health and personal care sales volume is expected to grow at a much faster rate than traditional drug stores sales. We forecast that the online health and personal care market will grow at a compound annual growth rate, or CAGR, of 13% between 2015 and 2020.
• There are a number of subcategories within health and personal care, and these have not been disrupted evenly across the board by e-commerce. We expect this to change as retailers tweak their business models.
• There are significant reasons why health and personal care online sales have lagged behind other retail sectors. These include the high cost to retailers of absorbing shipping costs on small, inexpensive items, and the desire among consumers to sample health and beauty products before buying.
• Subscription shopping models can help mitigate retailers' costs and provide an added layer of convenience to customers, and these services are helping the health and personal care category grow. 38% of US consumers who regularly purchase health and beauty products online say they're signed up for a subscription service.
• The race to win the online health and personal category hasn't been won yet. While Amazon is the clear leader, a good number of consumers do their online health and personal care shopping on a variety of websites, including buying directly from brands that otherwise would not have a direct channel to consumers.

The report is full of charts and data that can be downloaded and put to use.

In full, the report:

• Sizes the market for online health and personal care sales and growth expectations
• Examines which products categories within the industry have had the most success transitioning consumers to e-commerce purchasing
• Underscores the challenges and opportunities in going after increased online health and personal care online sales
• Looks at how new e-commerce models, especially subscription services, have helped drive an increase in online shopping in this category
• Identifies where consumers are doing the bulk of their online health and personal care shopping today

To access the full report from BI Intelligence, sign up for a 14-day trial here. Members also gain access to new in-depth reports, hundreds of charts and datasets, as well as daily newsletters on the digital industry.

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