Amazon (NASDAQ:AMZN) has unveiled Amazon Professional Beauty Store in a bid to disrupt the cosmetics and beauty products market on the back of its e-commerce strength.
The new store is part of Amazon Business, which will offer beauty supplies and professional salon products to cater to licensed and professional stylists, barbers and aestheticians.
Notably, the new store will sell products from brands like OPI Professional, RUSK and Wella Professionals to name a few.
Beauticians and stylists will be able to shop for the above-mentioned products from the new store just by creating an Amazon Business account and uploading their state-issued cosmetology, barber or aesthetician license.
We believe the latest move of Amazon will strengthen its online retail business further. Further, the store enhances its B2B offerings, which are likely to expand its business customer base. Consequently, this will drive the company’s top line.
Beauty Retail Market Holds Promise
The launch of Amazon Professional Beauty Store is testament to the e-commerce giant’s initiatives to bolster presence in the United States’ beauty retail market, which is valued at around $56 billion according to Forbes.
Moreover, the initiative is likely to help the company gain popularity among beauty professionals, which bodes well for business growth.
Additionally, the expansion of beauty related product offerings on Amazon’s online platform and their easy availability are expected to position the company well to capitalize on the U.S. beauty and personal care market, which, per a report from Statista, is expected to generate $82.9 billion revenues in 2019.
Further, the cosmetics segment of the market is anticipated to generate revenues of more than $17 billion this year.
Amazon Set to Disrupt the Market
Beauty retail market is one of the new territories that the e-commerce giant is eyeing. In fact, it is set to disrupt the market backed by its robust distribution strength and ability to deliver convenient shopping experience.
Further, its strengthening delivery system and shopper friendly deals are likely to help beauticians save time and money.
Additionally, Amazon is anticipated to pose significant threat to existing beauty retailers like Sally Beauty Holdings (NYSE:SBH) , Ulta Beauty (NASDAQ:ULTA) and Sephora to name a few.
Following the news of Amazon Professional Beauty Store launch, shares of Sally Beauty Holdings and Ulta Beauty plunged 17% and 2.6%, respectively, per CNBC.
Further, Amazon upped its ante against Walmart (NYSE:WMT) , which also sells varied beauty products.
We believe all these are likely to strengthen Amazon’s position in the U.S. retail space further.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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