Amazon Shares Increasing Due to New Professional Beauty Platform
By Space Coast Daily // July 7, 2019
As the online retail giant branches out into the world of specialist beauty products, now could be the ideal time to buy Amazon shares. Over the past five years, Amazon.com Inc. has seen its share price rise by a staggering 430.1%. Meanwhile, the company’s year-on-year performance is up 14.7%, a rise that will be paying out good dividends to some wise buyers.
While Amazon began life in the 1990s as a humble bookseller, it’s gone to on to conquer one market after another, leaving competitors in its wake.
Today, it’s possible to shop exclusively at Amazon, buying the clothes you wear, the toys your kids enjoy, the food you eat and everything in between in one place.
Most recently, it is the professional beauty industry that has caught the attention of bosses at Amazon.
In June, the company launched its online professional beauty store, which will sell everything from hairspray and mascara, to skin pampering treatments and lipsticks usually bought by salons and spas, make-up artists and beauticians.
The announcement will have other beauty industry retailers worrying that they’re under threat. And it’s not just everyday hair and beauty products that will be available on Amazon.
As well as the standard beauty brands we all use regularly like Wella, OPI and Aussie Hair, there will also be less familiar, more specialist products sold. These will include products only licensed beauticians and barbers can purchase, meaning Amazon really will be defining itself as a one-stop beauty shop.
Reaction to Amazon’s announcement has been swift, and dramatically. For example, shares of Sally Beauty Holdings almost instantly fell by 17%, and those who own shares in Ulta Beauty will have watched with dismay as they fell by 3%.
Most market analysts see these reactions as just the tip of the iceberg, with more drops expected as the weeks pass.
The professional beauty industry won’t be the first to find itself seriously shaken up by Amazon’s forays into its territory. In 2018, pharmaceutical retailers and wholesale drug sellers alike found themselves floundering when Amazon purchased drug seller PillPack.
This move was seen by many as Amazon’s opening gambit in a takeover of pharmaceuticals more broadly. It seems that those with the most influence at Amazon have recognized in the beauty industry a similar opportunity to enter lucrative markets.
One note released by the company about the way beauty professionals source their supplies reads: “Currently, stylists often travel to multiple cosmetology supply locations to get necessary supplies. We expect Amazon to quickly become an important enough channel for brands to carry their top offerings on the platform.”
Of course, it won’t be just beauty wholesalers and share prices that are impacted by Amazon’s latest news. The ‘Amazon effect’ can be wide-reaching and already there are whispers in some quarters about how else this new platform will change the beauty industry.
For example, will the Amazon brand provide the reassurance end-consumers need to abandon their usual retailers and buy beauty where the experts do? And will beauty clients begin to question how much they’re paying for treatments when they can easily access information about costs via Amazon?
The future certainly looks exciting for Amazon and for those investors who were forward-thinking enough to invest in the brand early.
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