How is the Beauty sector leading marketing innovation in retail?
The beauty sector has proved to be leading innovation within retail. This innovation does not only come from a scientific side concerning product innovations, but also from a digital marketing perspective where organisations have implemented successful strategies to attract and retain customers. Brands in this area have taken the lead using Augmented Reality (AR) for marketing purposes as well as disrupting traditional business models. We will be discussing these key marketing trends at the next TREND event on Thursday 9th of November.
We summarise the 5 big digital trends in Beauty that are shaking retail brands:
1. The use of Augmented Reality to test on beauty products and Virtual Reality to improve company’s inefficiencies.
First of all, it is important to note the difference between AR and VR. While AR is an addition to what already exists, VR is normally a simulation of an environment or a simulation where you have to use a headset in order to immerse yourself in a certain scenario.
We have seen some brands embracing Augmented Reality towards their customers. Widely speaking, those brands have tried to mimic the process of trying on makeup. Smashbox was the first to even try eye-tracking technology for when the consumer was ‘trying on’ makeup, where they identified eye movement patterns that would determine whether or not the consumer was responding positively to the product. As a result, they have seen a 27% increase in overall conversions since they began using this technology. Mikela Eskenazi will be giving a keynote speech on how to embrace this technology on the 9th of November.
Virtual Reality is also being used internally by powerful beauty brands such as L’Oreal. According to an article by Glossy.co, L’Oreal’s New York HQ has what they call, ‘the L’Oreal Beauty Lab’. This conference room is stacked with virtual reality glasses and installed with a VR screen and 3D modelling screens.
Their goal with this is different; to accurately define what is the best in-store approach to consumers. With over 30 cosmetic products, L’Oreal hair-care and skin-care brands are encouraged to use the virtual reality room in order to improve inefficiencies and increase productivity for their product merchandising and packaging, as well as their overall branding decisions. The Beauty Lab allows these decisions to be made more efficiently and in a shorter lead time, which therefore introduces improvements to the market much more quickly (reducing costs and increasing sales).
2. The power of video
According to the below statistic by Pixability: Women’s Wear Daily, during the measured period, makeup tutorials accounted for 68.5 percent of the views recorded for the top 200 beauty videos. Adverts generated 7% of beauty content video views on that same period.
This statistic illustrates the power of Influencers today in the Beauty industry, and therefore that brands should embrace this form of content creation as a tool for them to use within their marketing strategy.
Content marketers keep mentioning the growth and power of video in retail. However, beauty brands often face budget limitations when having to create a compelling video piece for their new products. Clinique, for instance, has decided to replace traditional display ads for six-second videos that are very product-centric. According to Google, since this change, they have seen a 70% increase in ad recall and a 26% rise in product awareness.
Another innovative, budget-friendly solution is to create ‘content in motion’ for ads used for display advertising and social media. According to Olapic, these videos can be 70 times cheaper than normal product-centric videos and they often see twice the engagement than they would see with a single static image.
3. Influencers on the rise
In relation to the above graph, beauty influencers are playing a key role in the beauty industry more than in any other retail sector. For beauty consumers, being able to see the desired product applied to ‘real people’ can lead to an instant purchase decision for one specific product.
As we discussed with Beauty journalist and influencer, Victoria Ceridono for our last #LEARNbyVERB, partnering with the right influencer can help beauty brands position themselves with a selected audience and a desired tone of voice in a much quicker and efficient way than if the brand would try and do it themselves.
“The reason why an influencer has its audience, it’s because they are real and genuine. Trying to ‘transform’ an influencer into something else would result into decreasing their following.”
It is not surprising that now brands are naming makeup artists as their brand ambassadors, making sure they try their products and of course, share them on their own social media channels. These makeup artists have large numbers of engaged followers and illustrate what is the best practice to apply the product. Likewise, it is important to note that as influencers, they have their own criteria for the products they use. and they may not like or choose your product over another from your competitors. Building a relationship ahead of any partnership is key in understanding whether or not the influencer feels aligned with, and will, therefore, use your brand’s products.
4. Streamlining the consumer’s path to purchase
A few months ago we saw Glossier taking the most of its data to make their content and commerce work better. Glossier beauty was born from the beauty blog Into the gloss.
Chief Technology Officer, Bryan Mahoney explained the different approach to both AR and VR:
“While we now consider Into The Gloss as our biggest social platform and part of our core community, we treat our readers and our Glossier customers as two very different entities. However, we know there’s an opportunity to use data to better understand how we can create an optimized reader and customer experience across platforms.”
Their strategy: to track behavioural customer and audience data across both platforms in order to better position its readers to become customers, and vice-versa. Their blog and commenters have also become a vital source of information for product creation. They compiled comments and queries to make sure any new products were developed with this feedback in mind. Mahoney also realised that people who read Into the Gloss are 40% more likely to purchase products than people who only visit Glossier, which resulted in building a better connection for the blog readers to make sure they became Glossier clients through the website.
The more personalised and customised the brand’s marketing message is, the more engaged and loyal the customer will be. In addition, building a sense of community with your target audience can help achieve higher levels of loyalty, and therefore help improve conversion rates.
5. Disrupting traditional business models.
Traditionally when we have thought about the beauty sector, we probably thought about the sale of skin care and makeup within a crowded shopping mall. However, beauty has gone above and beyond this, with innovative business models that bring the product to the consumer in more efficient and ‘real’ ways. As Ana Andjelic explained during her talk at TREND, “Often, disrupting traditional business models is not about creating something super innovative and futuristic, is just about removing ‘friction’ from what already exists”.
A good example are subscription-based models. Companies like Birchbox, Smashbox, Ipsy or FabFitFun. These companies send you a package, usually once a month, of items they’ve picked out for you according to your existing preferences. Beauty is leading this model in retail, which is expected to grow in the coming years, allowing brands to further expand their offering to customers, and better use feedback to improve and streamline their strategies.
Subscription-based businesses have been able to adapt faster to mobile and online than any other retailers, allowing these brands to grow faster than anyone else. In addition, subscription-based businesses add the ‘surprise’ factor which leads into a more engaged consumer. However, those businesses often struggle when launching their brand due to a lack of trust from consumers. For those brands, offering free returns and no commitment to buy on the consumer’s part is key to achieve loyal consumers.
We will be discussing the digitalisation of the Beauty industry at the next #TRENDbyVERB on Thursday 9th of November in London. Early Bird tickets are now available! Please get in touch if you would like to know more.
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