Cosmetics

Cosmetics AOV has quietly recovered to 1.08x after eighteen months of pressure. The floor is in.

From mid-2024 through early 2025, Cosmetics AOV told an uncomfortable story. It peaked at 1.20x in September 2024 and then spent the better part of a year contracting, bottoming out at 0.85x in January 2025 before beginning a slow, uneven climb back. February 2026 at 1.08x is the first time the vertical has been meaningfully above baseline since that September peak.

Cosmetics AOV behaves differently from other verticals because the category has a strong repeat-purchase pattern at low individual price points. A $24 foundation repurchase doesn't move AOV the same way a $180 outfit does. What moves Cosmetics AOV is cross-category attachment: skincare buyers adding a tool, makeup buyers adding a setting spray, fragrance buyers adding a travel size. The brands that held AOV through the contraction period were the ones with checkout experiences that surfaced those attachments at the right moment rather than defaulting to a bare confirmation page.

What to do: If you haven't reviewed your post-cart upsell or cross-sell logic in the last six months, now is the moment. AOV recovery in this vertical is driven by attachment, not basket size. A single well-placed "complete the routine" prompt at checkout, tied to what's already in the cart, is worth more than a blanket discount offer.

Coupon usage is the defining characteristic of this vertical, and it hasn't normalized

No other vertical in this dataset runs coupon usage the way Cosmetics does. The series peaked at 1.51x baseline in December 2024, a reading that stands out even among promotional categories, and while it has pulled back since then, February 2026 still came in at 1.11x. Cosmetics buyers use codes. That's structural.

The reasons are well understood: the category is flooded with influencer codes, subscription discount offers, email capture popups that promise 15% off, and loyalty programs that issue codes as the primary reward mechanic. A Cosmetics buyer who has made more than two purchases from a brand almost certainly has a code somewhere, or knows how to find one. The checkout experience for this vertical is, for a meaningful share of buyers, a code-entry experience first and a payment experience second.

The margin implications are real. A vertical where over 10% more checkouts include a discount code than the baseline average is a vertical where promotional dependency is structurally embedded. The brands that are managing it are moving toward non-code value delivery: free gift with purchase, loyalty point accrual visible at checkout, and threshold-based perks that don't require a code to unlock.

What to do: Audit what percentage of your orders include a discount code and what the average discount depth is. If more than 30% of orders include a code, you have a structural dependency worth addressing. The first test is making the discount field less prominent without removing it. The second is introducing a non-code value offer at the same checkout step, and measuring whether it substitutes for the code or stacks on top of it.

Shipping revenue has been falling for over a year, and the free shipping rate recovery tells you why

Cosmetics shipping revenue peaked in late 2024 and has been declining steadily since, hitting 0.81x baseline in February 2026. At the same time, the free shipping rate has climbed from a low of 0.63x in December 2024 to 0.98x in February, nearly back to baseline. Those two lines are telling the same story from opposite directions: Cosmetics brands have been aggressively expanding free shipping eligibility, and it's compressing shipping revenue as a result.

Some of that is rational. The Cosmetics buyer is highly price-sensitive at checkout in a specific way: she'll spend $80 on product without blinking but will abandon over a $6.99 shipping fee. Free shipping in this vertical is less a perk and more a conversion necessity. The question isn't whether to offer it but where to set the threshold and whether it's doing the work it should be doing on AOV.

A free shipping rate approaching baseline is a good sign for conversion. But if the threshold is set too low, you're absorbing shipping cost on orders that would have converted anyway. The goal is a threshold that pulls average order value up toward it, not one that sits below where buyers are already landing.

What to do: Check where your free shipping threshold sits relative to your current AOV. If the threshold is below AOV, lower it carefully and watch whether conversion holds or basket size drops. If it's above AOV, make sure you have progress bar messaging to close the gap. The threshold should be doing two jobs: protecting shipping margin and stretching the basket. If it's only doing one, it's set wrong.