Our fifth annual 2013 Digital IQ Index: Beauty report projected that e-commerce in the category grew by an astonishing 29.1% last year. In this video interview, L2 Head of Research and Advisor Maureen Mullen says Beauty brands are in the midst of an arms race in digital innovation. Brands that had been committed to digital for some time increased their investments in 2013. L’Oréal made strides in autoreplenishment, following what Estée Lauder had done in the previous years. L’Oréal Paris has been very aggressive in personalization technology. The battleground in e-commerce has moved to fulfillment. Brands such as Burberry have included next day delivery for a fee to compete with Amazon Prime.

Mullen says social media is dominated by lifestyle fashion brands with a cosmetics arm such as Dior, Chanel, and Michael Kors. Smaller players like Benefit Cosmetics, Urban Decay and Bobbi Brown have used social media as the connective tissue of their strategy, and have been successful in generating organic buzz.

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